Step-by-Step Guide to Setting Up an LLC in Dallas
The LLC is Most Popular: The Small Business Administration Reports 70% of US Small Business Formations are LLCs2 min read
According to the Small Business Administration, the Limited Liability Company (LLC) is the most popular form of small business entity, making up a whopping 70 percent of all small business formations in the USA. And, aptly, it is very much an attractive choice for entrepreneurs and small business owners due to its simplicity and flexibility in the way it operates.
If you’re based in Dallas and are looking to get your business off the ground, here’s a step-by-step guide to setting up an LLC.
1. Choose a Business Name
The first and foremost step in setting up an LLC is deciding on a suitable name for your business. It’s best to choose a name that speaks to the purpose and offering of your business as well as being able to work in tandem with your business's marketing efforts. It’s also important to check with the Texas Secretary of State to make sure no other business has already registered the name you’re interested in. It’s also important to be aware that your business name, in most states, must include "limited liability company," "LLC" or "L.L.C."
2. Appoint a Registered Agent
In the state of Texas, you will be required to appoint a registered agent for your LLC. A registered agent is a trusted individual or a wide variety of firms whose designated purpose is to collect any official notifications on your behalf and make sure that all required documents are filed correctly. This role can be taken up by the principal (owner) of the LLC, however, there are certain requirements that must be met including having a physical address in Texas.
3. Obtain an EIN
An Employer Identification Number (EIN) is a unique nine-digit number that the Internal Revenue Service (IRS) uses for tax filing purposes. Getting your LLC EIN is not only important to complete the formation process but also a requirement in the majority of cases such hiring employees, obtaining funding, or unless you plan on forming an owner-member LLC.
4. Prepare and File the Articles of Organization
Articles of Organization are a document that provides quick information about a business enterprise and allows it to form a Legal LLC. This document should be filed with the Texas Secretary of State to establish a legal entity.
5. Draft an LLC Operating Agreement
An LLC Operating Agreement is a document drafted that contains information about the ownership, rights, and obligations of each owner or “member” in the LLC. This document can be used as a guiding force to regulate the way your business will be operated. Such information can be detailed, defining the terms of the operating agreement that allow the LLC to run like a well-oiled machine. The document can serve as evidence of ownership as when the Internal Revenue Service requires it at the time of any financial audit.
By following these five steps, setting up an LLC in Dallas shouldn't be too difficult to navigate. But if you are looking for expert counsel that understands local regulations, consider UpCounsel—an online platform connecting businesses with experienced lawyers on demand. Whether your company needs a one-time consultation or an entire freelance legal department, UpCounsel delivers high-quality, cost-effective legal services.