Register LLC in Texas

If you want to Register LLC in Texas, you’ll need to know of the requirements for registering your business in the State. Some of the steps include the following:

  • Name your business
  • Choose a registered agent
  • File the Certificate of Formation
  • Draft the Operating Agreement
  • Obtain an EIN

Name Your Business

First, you’ll have to choose a business name. You’ll want to choose a name that is not only best suited for your business, but one that you can legally use. Therefore, before locking in a name, you will need to run a business entity search of any name you’re interested in using. You can conduct your search on the Texas Business Entity Search database found on the Texas Secretary of State website.

When choosing some names you might want to use, also keep in mind that the name must include the LLC business designator and cannot include prohibited terms, such as Bank, University, Insurance, FBI, etc. Therefore, any indication that you operate as a government entity is prohibited, as is any indication that you operate as an educational institution. If you aren’t an attorney or doctor, you cannot include such terms in your name.

Once you’ve chosen a name that is both legally allowable and available for use, you can register it for up to 120 days by filing a Reservation – Form 501 with the Texas Secretary of State). The fee is $40.

Choose a Registered Agent

You can choose a registered agent online, by mail, or in-person. The state requires that you choose an agent who will receive and send legal papers on behalf of your business. The agent must be a resident of Texas or a corporation that is authorized to conduct business in the state. You can also choose a member of the LLC to act as the registered agent so long as he or she lives in the state of Texas, or alternatively, if the member is in fact a corporation, then it must be allowed to do business in the state.

Once a registered agent is chosen, the agent must accept responsibility for acting as the agent on behalf of the LLC. Therefore, an Acceptance of Consent form 401-A must be filled out and filed with the Texas Secretary of State.

File the Certificate of Formation

Once you have chosen your registered agent, you must file the Certificate of Formation with the state, which can be done either by mail or online. The certificate must state whether you want to operate as a member-managed or manager-managed LLC. If you operate as a member-managed LLC, then the owners will oversee the daily operations of the business. However, if you choose to operate as a manager-managed LLC, then you will hire a third party manager to oversee the business activities. In this case, the LLC owners will have no ability to oversee the business. The only ability for oversight is voting power and power to make significant business decisions. When you submit the certificate, you must pay the fee of $300, which is payable to the Secretary of State.

Draft the Operating Agreement

While the Operating Agreement is not required in the state of Texas, it is highly beneficial. If done correctly, this agreement will be legally binding on all members of the business. Several items will go in this document, including:

  • Purpose of the business
  • Member’s duties and responsibilities
  • Identify the withdrawal process for members and what happens if a member wants to leave the business, i.e. requirement for selling membership interest to another existing member
  • Identify the procedure and outcome if a member dies, becomes incapacitated, disabled, or divorces
  • Establish how the business can be dissolved and the steps necessary for dissolution

Obtain an EIN

It is almost always required to obtain an EIN. The EIN, also referred to as an employer identification number, is a tax ID number that is given by the IRS. It is essentially the Social Security Number of the business. It is required if you are filing state and federal taxes. Further, it is required for opening a business bank account with a bank. You can obtain an EIN for free via the IRS website.

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