Setting Up an LLC: Important Things to Know for the Businessperson in Dallas
The Advantages of Forming an LLC for Your Business3 min read
You work hard running a business and know that an LLC can provide a wide range of benefits for you and your employees. You’ve heard of the legal benefits of forming an LLC—limited liability for obligations and debts, pass-through taxation, and potential tax savings for businesses and owners—but you’re located in Dallas and you’re not sure about specific requirements related to local ordinances and regulations that could cost you money and time.
That makes sense. Dallas does have some special considerations that business owners should be aware of before setting up an LLC. Keep in mind that you should universal principles that will apply wherever you’re based, but there are also things that business owners in Dallas should keep in mind when they are setting up an LLC.
Forming an LLC in Dallas
The first step of forming an LLC is to determine a name for the business. The official name should include the phrase “Limited Liability Company” or an abbreviation for that phrase; however, Dallas law only requires that a company’s name not be similar to any other existing business names on file with the Texas Secretary of State. Because of the lack of a unique identifier for LLCs, it is possible that you may be forced to change the business’s name after you’ve done online transactions or the state database recognizes it as similar to one that already exists.
The next important step to setting up an LLC in Dallas is choosing a registered agent. A registered agent is a person or business entity that agrees to accept legal documents, such as service of process, orders, and notices, on behalf of the business. It must either be a person who is a resident of Texas or a business entity authorized to do business in Texas.
Creation of the Business in Dallas
The LLC’s creation is documented in the articles of organization filed with the state of Texas. The document must include the LLC’s name, the name of its registered agent, the address of the principal office, and the name and address of each of the organizers.
It is possible to choose a manager-managed LLC, which requires that the managers (and members, if any) sign the articles of organization, or a member-managed LLC, which requires that individual members (and managers, if any) sign the articles of organization. In either case, the articles of organization have to be signed by all parties involved.
Operating and Taxes
Once the LLC is formed, it should develop an operating agreement that governs the management of the business. This document determines how the LLC is managed, how profits will be distributed, and how losses will be shared.
The LLC also needs to obtain any state and local licenses that are required depending on the type of business being conducted. This may include a special license from the local county if a building is owned or leased.
The LLC also needs to obtain a federal taxpayer Identification number from the Internal Revenue Service and register for taxes that apply to the business, including any taxes collected or owed to the state, county, and city.
Additional Considerations in Dallas
LLCs located in Dallas also need to be aware of other important considerations, such as the impact of the city’s fiscal policies on taxes and fees. Some of these policies have a major impact on business owners, and there may be special rules in Dallas for certain businesses. Additionally, businesses in Dallas may be required to comply with certain payroll, labor, and employment laws that may not apply to other parts of the state.
In sum, forming an LLC can provide many benefits for business owners in Dallas, but they should also be aware of the unique considerations in the city. It’s important to be aware of local regulations and licensing requirements that could impact the business and the costs associated with setting up an LLC. Additionally, Dallas’ fiscal policies can have an impact on the business’s taxes and fees. Knowing this information can save business owners in Dallas time, money, and headaches when they are setting up an LLC.