Filing your Texas LLC articles of organization is one of the first steps in forming your new business. A limited liability company is a business which offers characteristics of a partnership and corporation. Each member's liability is limited to what they've personally invested in the business, but the LLC avoids the double taxation upon which corporations are subjected.

How to Form an LLC

The first step in establishing your LLC is to choose a business name. Under Texas law, an LLC must contain the words Limited Company, Limited Liability Company, or one of its abbreviations in the name. You may also use abbreviations such as Ltd. and Co.

Your LLC name must be unlike any other business name on file with the Texas Secretary of State. While not required, you may place a hold on your preferred name for 120 days by filing Form 501, called an Application for Reservation or Renewal of Reservation of an Entity Name. File this form online or via mail and pay the required $40 fee.

Once you've selected an appropriate business name, you can file your Certificate of Formation. Other states call this document an articles of organization, but Texas refers to it differently. Regardless, it is the same document you may have encountered in your research.

Your Certificate of Formation must conform with all reporting requirements in your jurisdiction, which is the location where you will register and operate your business. This certificate must include:

  • Your LLCs name
  • The contact information for your registered agent
  • Whether your business will be member-managed or manager-managed
  • Each LLC member's contact information
  • The certificate's effective date
  • The $300 filing fee

The simplest way to file this form is through the Texas Secretary of State's website.

Appointing a Registered Agent

Every LLC in Texas must appoint a registered agent. A registered agent is an individual or company available to accept legal documents on the LLCs behalf, specifically if the LLC is ever sued.

Your LLCs registered agent must be a Texas resident or a business entity in Texas. In other words, your registered agent must have a physical address in Texas. Your LLC cannot act as its own registered agent.

Additional Steps for Forming an LLC in Texas

While not required by state law, it's recommended that your LLC creates an operating agreement. You do not need to file this document with the Certificate of Formation but can file it with your LLCs business records.

Unlike some states, there is no requirement for you to publish your intent to form an LLC in Texas.

Certain tax and regulatory requirements may apply to your business, so do your research carefully. For instance, if your LLC has more than one member, you must obtain an employer identification number from the IRS, even if you don't plan to hire any employees. As a single-member LLC, you're only required to get an EIN if you hire employees or choose to be taxed as a corporation.

You can obtain an EIN simply by visiting the IRS website and completing the online EIN application. There is no filing fee.

In some cases, you may need to secure a business license. Whether you need a license depends on your type of business and its location, so check with your local authorities or visit the Texas Department of Licensing and Regulation. For example, if you sell products and collect taxes, you must register with the Texas Comptroller of Public Accounts.

There is also an annual franchise tax imposed on many Texas LLCs. You will need to register with the Comptroller of Public Account's office and file annual franchise tax reports. The good news, however, is that Texas does not require any annual reports.

Ordering Certified Document Copies

You can order a certified copy of your articles of organization or incorporation anytime from the Texas Secretary of State. Orders are accepted via mail, email, fax, phone, online, or in person.

Normal processing times for certified document copies is two business days, plus mailing time. The secretary of state charges $1 per page and a $15 flat fee. If you need your documents quickly, you can select an expedited service for an additional $10. Expedited services take less than one day, but you should still consider how long the mail will take.

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