LLC Texas: Everything You Need to Know
Forming an LLC Texas requires a business owner to take the following steps with regard to naming, filing, and operating. The first, and one of the most important, steps when starting a business is coming up with a name for your limited liability company (LLC). 3 min read
2. Choose a Registered Agent
3. File the Certificate of Formation
4. Create an Operating Agreement
5. Obtain an EIN
Forming an LLC Texas requires a business owner to take the following steps with regard to naming, filing, and operating. The first, and one of the most important, steps when starting a business is coming up with a name for your limited liability company (LLC).
Research Business Names
You should research existing names to make sure the name you want for your business is easy for potential customers to search for and suits your venture.
An LLC name must follow certain guidelines in the state of Texas:
- Include the words “limited liability company” or one of the acceptable abbreviations.
- Certain words require the completion of additional paperwork to be used in an LLC name, such as university, bank, or attorney. To qualify, you might also need a licensed professional, such as a lawyer or a doctor, to be part of the business.
- Certain words are restricted from use in an LLC name, including Treasury, FBI, Secret Service, and other names that could confuse the LLC with a government agency.
The next step is making sure the name you want is available in Texas. If another business already exists with a name that is too similar or identical to the one you want, you'll have to come up with a new option. To do this:
- Register for an account on the Secretary of State website.
- Search existing business names.
- Use this account to file required business forms online and pay any required filing fees.
You should also make sure the URL for the business name you want is available. Even if you aren't planning to make a website right away, you might want to obtain the domain name before you register your business name to prevent someone else from taking it. Your LLC will also need a professional email address. Google offers the G Suite professional email system, which includes business tools such as spreadsheets and word processing. It's free to try and also includes impressive security to protect your business information.
Choose a Registered Agent
Every LLC operating in Texas must have a registered agent. The next step is nominating your registered agent and filing the required form in person, by mail, or online. A registered agent is a business or individual that is responsible for receiving and handling any legal documents on behalf of the company. Some of the common legal documents include filings and service of process of legal action, which will be sent to your business if someone sues it.
To qualify as a registered agent, the business or individuals must meet certain requirements:
- If you designate an individual, he or she must live in the state of Texas.
- If you choose a business to serve as the registered agent, it must have current authorization to operate in the state.
- An owner or employee of the LLC can serve as the registered agent, but the business itself can't be the registered agent.
- Registered agents must agree to their appointment in either electronic or written form.
Use form 401-A to make sure the agent's acceptance of appointment includes the right language. You do not have to file this form with the Secretary of State.
File the Certificate of Formation
Step three of forming an LLC is filing the certificate of formation. You will submit this document to the state. Before you file the certificate, decide whether members or managers will manage the business. When you file the certificate of formation, you must pay a nonrefundable filing fee of $300 to the Secretary of State's office. It's important to note that if the LLC is being expanded into Texas from another state, the business qualifies as a foreign LLC.
Create an Operating Agreement
Although an operating agreement isn't a requirement to form an LLC in Texas, it is smart to have one on file. This legal document will outline the LLC's operating procedures and ownership.
Obtain an EIN
Nearly every LLC operating in Texas will need an employer identification number (EIN), also referred to as the federal tax identification number. It identifies the company and serves the same purpose as a social security number for a person.
If you need help with an LLC 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, Menlo Ventures, and Airbnb.