Texas Secretary of State LLC: Everything You Need to Know
LLCs are established under state laws, and in Texas, the Secretary of State's office regulates LLC formation.3 min read
What to Know About Forming an LLC
LLC stands for limited liability company. It is a type of business organization that combines benefits of both a partnership and a corporation — pass-through taxation, flexible operating procedures, and limited liability for owners.
To form an LLC in Texas, you need to start by choosing a name. You are required to have the LLC designation included. For example, the name needs to include one of the following:
- Limited Company
- Limited Liability Company
- Ltd. Co.
The name you choose must be easily distinguishable from that of any other business entity on file with the Secretary of State office in Texas. You can check availability through the Texas Secretary of State SOSDirect website. Your potential name can be reserved for up to 120 days by filing Form 501, an Application for Reservation or Renewal of Reservation of an Entity Name. It can be filed online or by mail.
You must file a Certificate of Formation as well, which includes pertinent information about your LLC, including:
- Intended LLC name
- Name of the registered agent and their address
- Decision on whether the LLC will be manager-managed or member-managed
- LLC's governing person's name and address
- LLC's organizer's information
- Effective date of the Certificate of Formation
Every LLC is required to name a Texas registered agent who will accept service of legal documents on behalf of the company. It has to be a Texas resident or a business authorized in Texas, and there must be a physical address within the state.
The Certificate of Formation can be filed online or through the mail along with the filing fee.
LLCs with more than one member are required to obtain a Federal Employer Identification Number (FEIN), even if there will be no employees. If you have a single-member LLC, you only need to obtain an EIN if you plan to have employees or eventually be taxed as a corporation rather than a sole proprietorship.
Depending on what type of business you have and where it's located, you may need to apply for other state and/or local business licenses. For example, if you are selling a product and you collect sales tax, you will need to register with the Texas Comptroller of Public Accounts. It's also important to point out that Texas charges an annual franchise tax on most LLCs. In some cases, you'll be able to register online, by mail, or in person at a Texas Comptroller field office.
Registering a Foreign LLC in Texas
If you have a current LLC registered in another state and wish to do business in Texas, you will need to register it as well in Texas. The state requires all foreign LLCs to register with the Secretary of State if you plan to do business in Texas. You are required to appoint a registered agent of service and you must file Form 304, which is an Application of Foreign Limited Liability Company. Prior to filing, remember to check if the LLC's name is available. If it's not available, you'll need to file for an assumed name in Texas and file an Assumed Name Certificate.
What to Do Once Your LLC is Approved
Once you've received approval that your LLC is active, you'll need to complete a number of steps:
- Apply for a Federal Tax ID Number (FEIN or EIN) with the IRS
- Open a bank account in your business name
- Register your LLC with the Texas Comptroller of Public Accounts
- Apply for any necessary trade licenses
- Verify whether you need any licenses issued by your local city or county
- Obtain any trade licenses if required
- Verify whether you need zoning approval for an office in that location
- While not mandatory in Texas, you should prepare an Operating Agreement
How to Obtain Certified Copy of Articles of Organization
To get everything started with your new business, you will need to request a certified copy of your Articles of Organization. It can be ordered via fax, mail, email, in person, online, or by phone. If possible, it's recommended to do it online. It typically takes two days to process, not including time for mailing. Expedited service is available for an additional fee.
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