LLC in Texas Cost: Everything You Need to Know
Texas LLCs are not obligated to reserve a name, but name reservations prevent other businesses from using the same name as you file the necessary paperwork. 3 min read
LLC in Texas Cost
When it comes to LLC in Texas cost, you would pay $300 to file the registration paperwork. With that, you must first name your company. The name of your Texas LLC should be different from others operating within the state. To ensure that your name is not already taken, contact Texas Secretary of State Offices, or you can check the Secretary of State website.
If your selected name does not show up in the state database, you can reserve the name for 120 days for a cost of $40. You may file the reservation via the Secretary of State website, or you can file through the mail. With that, phrases such as “limited company or “limited liability company” should appear at the end of your business name.
Texas LLCs are not obligated to reserve a name, but name reservations prevent other businesses from using the same name as you file the necessary paperwork. The Secretary of State office also provides filing paperwork for your convenience, known as a certificate of formation.
Filing the Certificate of Formation
Every LLC in Texas must file a certificate of formation with the Texas Secretary of State.
All LLCs need to submit a certificate of formation to the Secretary of State office to gain official recognition in Texas. Complete the certificate by giving such important information as:
- Business Info
- Business Purpose
- Name and Address of Each Company Members
Further, the certificate must list the name of the registered agent, the person who will accept official document’s on your company’s behalf.
The certificate should mention the address and include an electronic or written consent document from the appointed agent.
The state requires all LLCs to appoint a registered agent. The agent can be a Texas resident or any organization permitted to conduct business in Texas. Moreover, the agent must have a physical address in the state. It should be noted that LLCs cannot be its own agent.
To be considered for registered agent, an individual or organization needs to submit an appointment and consent form to the Secretary of State office, otherwise known as Form 401-A. Filing fees for Form 401-A amount to $15 for profit-based LLCs and $5 for non-profit LLCs.
The document should include such information as:
- The person or organization agreeing to become the agent
- Confirmation that the agent is located in Texas
- Physical, Texas Street Address
- Execution Date of the Agreement
Completion of Certificate
After the registered agent form is completed, the certificate of formation should also designate whether the LLC is member or manager-based. Also, be sure to include the entity name and the address of each member, and if there is any dissolution date.
You can file the certificate via the Secretary of State website. You can also mail the form or give it to authorities in person. The approval process normally takes 1-2 business days, and you should get an emailed response with confirmation of your submission. You may also pay an additional $25 fee to expedite the process, and the process would get approved in a single business day. However, turnaround times may vary if officials find a problem with your application.
An operating agreement is an internal memo that details the operating structure of your LLC. It is not mandatory under Texas law, but it is a good document to draft so members can all be aware of the rules in place.
Your operating agreement should include:
- Management Structure
- Compensation Plan and/or Share Disbursement System Among Members
- Roles, rights and responsibilities of all members and employees.
Get a limited liability company operating agreement if your organization has more than one member. The operating agreement should not be filed with your certificate of formation. With that, it should be filed when submitting your tax license.
An employee identification number (EIN) is used by the IRS to identify your business and assess taxation where necessary. LLCs with more than one member must apply for an EIN, even if there are no employees. If you are the sole owner, you only need to get an EIN if it employs workers, or if you choose a corporate tax structure instead of a sole proprietorship. You can get an EIN from the IRS website for free.
To learn more about LLC in Texas cost, submit your legal inquiry to the UpCounsel marketplace. UpCounsel has some of the best lawyers in the country to guide you through forming an LLC in Texas, including any costs or tax burdens you need to be aware of. We give you valuable insight that you need to create your LLC as fast as possible so you can focus on the internal operations of your business.