Secretary of State Texas LLC: Everything You Need to Know
Secretary of State Texas LLC manages the formation of a limited liability company in the state. This type of business entity provides advantageous tax status.3 min read
Secretary of State Texas LLC manages the formation of a limited liability company in the state. This type of business entity provides advantageous tax status and prevents your personal assets from liability in the event of business debts or financial obligations.
Forming an LLC in Texas
- First, choose a name that is not already in use by another business in the state. You can check the availability of a name on the SOSDirect website maintained by the Texas Secretary of State. The name must include the words Limited Liability Company, Limited Company, or an abbreviation of these. Once you decide on a name, you can reserve it for a fee of $40. This can be done online or through the mail.
- Appoint a registered agent who is responsible for accepting legal documents on behalf of the LLC. This may be an individual who has a physical street address in Texas or a company authorized to conduct business in Texas. The state maintains information about the registered agent process
- When you have a name, file Form 205, Certificate of Formation, with the Texas Secretary of State. This document includes the name of the LLC, the name and address of the registered agent, whether the business is run by members or hired managers, the name and address of the governing member and organizer of the LLC, and the effective date of the business. The fee for this filing is $300.
- Although it's not required for Texas LLCs to create an operating agreement, you should have one in place if your company has more than one member.
- LLCs with more than one member must register for a free employer identification number (EIN) with the IRS. This is also a required step for LLCs with employees and those who opt to be taxed as corporations rather than as sole proprietorships. You can complete this process online, and no fee is required.
- Depending on your industry and business location, you may need to register for other state and local business licenses. More information is available from the Texas Department of Regulation.
- You must register with the Texas Comptroller of Public Accounts if you are selling products and charging sales tax. This can typically be done online, by mail, or in person.
- Texas does not require LLCs to submit annual reports, but they must file annual franchise tax reports.
Registering a Foreign LLC in Texas
An LLC created outside of Texas must register as a foreign LLC to do business in the state and must have a registered agent who lives or is authorized to do business in Texas. To register, submit Form 304, Application for Registration of Foreign Limited Liability Company, and pay the $750 filing fee. If the name of your LLC is already in use in Texas, you must adopt an assumed name for use in the state by filing Form 503 and paying a $25 fee.
Dissolving a Texas LLC
Submit the Certificate of Termination of Domestic Entity to the Texas Secretary of State to dissolve your LLC. Include a certificate of account status indicating that the LLC is in good standing and all taxes have been paid. The filing fee for dissolution is $40.
To get a certificate of account status, file Form 05-359, Request for Certificate of Account Status to Terminate a Taxable Entity's Existence in Texas.
Certificates of termination are typically processed in three to five days, but it may take up to six weeks to receive your tax clearance. After your entity is terminated, another entity can immediately use your business name.
Failing to properly dissolve your Texas LLC means that you are still required to pay franchise tax and will be charged a 5 percent penalty for late filing, another 5 percent after 30 days, and interest of 1 percent over the prime rate after the tax is 60 days late.
The Texas Secretary of State is located at 1019 Brazos in Austin, TX 78701. This office is open from 8 a.m. to 5 p.m. Monday through Friday.
The mailing address is:
Texas Secretary of State
P.O. Box 13697
Austin, TX 78711-3697
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