In terms of LLC forms, Texas requires that a Certificate of Formation be filed with the Secretary of State, along with a nonrefundable $300 filing fee. An operating agreement is not required but is recommended.

Starting an LLC in Texas Overview

Forming an LLC Texas is relatively easy and affordable. While it is similar to many states, forming an LLC in Texas does have some specific requirements:

  • Registering with the Secretary of State by filling out the necessary forms
  • Paying the fees associated with filing
  • Meeting all required formation and naming requirements

Before deciding on registering for an LLC, it is important to research what an LLC means and determine if it will be the best option for your business structure.

Steps to Start an LLC in Texas

There are some important steps when it comes to forming an LLC in Texas, including the following:

  1. Naming your LLC
  2. Selecting a registered agent
  3. Creating and filing a Certificate of Formation with the State of Texas
  4. Drafting an operating agreement
  5. Obtaining a company EIN

Naming your LLC 

One of the most important steps when it comes to forming your Texas LLC is coming up with an appropriate name for your business. You will want to take some time to research the name you want to make sure it is easily searchable for customers. 

There are some naming requirements that you will need to make sure to follow, such as adding "Limited Liability Company" or "LLC" to the name and gathering the licenses and necessary paperwork if adding a professionals service name to the company name. This is required for any professional services that require a specific license, such as in the legal and medical fields. You must also make sure that your company name does not imply any association with a federal or state agency.

The final step to naming your company is to make sure that the name is available by checking https://direct.sos.state.tx.us/acct/acct-subscribe.asp.

Selecting a Registered Agent

An LLC requires a registered agent who will be able to accept business paperwork including processes of legal action on behalf of the LLC. To be a registered LC agent, you must be able to legally do business in the state of Texas and have a physical address to receive correspondence. In Texas, commercial registered agents typically charge between $100 and $250 per year for their services. In Texas, a registered agent must provide consent to the appointment, which can be completed online in an electronic form.

Creating and Filing a Certificate of Formation

When creating the Certificate of Formation, one of the first steps in the filing is determining whether the LLC will be member-managed or manager-managed. In a member-managed LLC, all of the members will be actively engaged in the day-to-day operations of running the business, and all will have a say in decisions that will be made regarding operations. This will often be done by voting. When a company is managed by members, it is often referred to as "decentralized management," which will put the managerial duties in the hands of all members instead of just a few.

When a company is termed "manager-managed," the members of a company will identify a specific set of managers who will be more effective in the day-to-day running of the business. These managers will be the ones responsible and will not require a vote to make decisions. This type of management is often referred to as "centralized management."

When filing a Certificate of Formation, you will need to include the following:

  • $300 nonrefundable fee paid to the Secretary of State
  • Name of the company
  • Name and address of the registered agent
  • Electronic consent of the registered agent
  • Statement as to whether the LLC will be member-managed or manager-managed
  • Names and addresses of all organizers of the Certificate of Formation
  • Purpose of the formation of the LLC
  • Dissolution date
  • Names and addresses of all members and managers

Drafting an Operating Agreement

Texas does not require an operating agreement, but this document can be beneficial for outlining the ownership and operating procedures of a company. 

Obtaining a Company EIN

The final step to forming an LLC if to file for an Employer Identification Number (EIN), which will be used for filing taxes as well as opening company bank accounts. An EIN can be obtained for free from the IRS by filling out the online forms or printing them out and mailing them to the IRS.

If you need help with LLC forms in Texas, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.