How to Start an LLC in Texas

The first step is to file a Certificate of Formation (also known as Articles of Organization) with the Texas Secretary of State. You can do this online at SOSDirect for faster processing, by mail or by fax.

The articles should include the LLC’s name, address, and purpose. It should also mention if it will be member-managed or manager-managed.

1. Select a Business Name

Choosing the legal structure of your business can have significant financial and tax implications. Consult with a professional to understand your options.

Once you have determined the appropriate structure, select a business name. Ensure the name is available by searching the state’s business database. Some states also require you to reserve a web domain.

If a business with the same name already exists in Texas, the other company must consent to your use of that name on a Consent to Use Similar Name Form (Form 509). Additionally, it is important to consider whether your business will be responsible for any state or local taxes.

2. File Articles of Organization

A business license may be required for some types of businesses in Texas. Check with your local and state authorities to learn more about the requirements.

You must also choose a legal name for your LLC, which must contain the words “limited liability company,” “limited company,” or an abbreviation (LLC, L.C., Ltd. Co., etc.). It should also have a distinguishable designator that makes it easily identifiable as an LLC, such as “The,” “LLC,” or “Company.”

You can reserve a business name for 120 days online for a small fee. You should also consider obtaining an Employer Identification Number (EIN), which is needed to open a business bank account and keep personal and business assets separate.

3. Designate a Registered Agent

All Texas LLCs and out-of-state businesses authorized to do business in the state must have a registered agent. This is an individual or business entity that will receive legal and official documents on behalf of the LLC, including franchise tax reports and lawsuits.

The registered agent’s name and address are public information and available through the Texas Secretary of State’s website. If you want to keep your personal contact information private, consider using a professional registered agent service.

Other important items to consider include obtaining a business license and checking out commercial insurance options. Also, make sure to file a PIR and pay any applicable taxes.

4. File a Certificate of Formation

If you’re ready to start your LLC, you’ll need to file the Texas Certificate of Formation. This form lays out your company’s structure and management. For example, you’ll need to state whether the LLC will be member-managed or manager-managed.

You’ll also need to select the purpose of your LLC and enter the name of a registered agent. The registered agent is the person who receives legal documents like service of process and tax notices for your LLC.

If you’re looking for an easy way to start an LLC, check out Inc Authority’s services. They’ll even connect you with a private banking specialist to help you choose a business bank account and handle the required paperwork.

5. Open a Business Bank Account

As a Texas business owner, you will need to open a bank account in your business name. You will need to present your state-issued driver’s license or passport, your business registration documents and other materials depending on the bank and type of account you require.

LLCs are popular in the state of Texas for their liability protections, ease of formation and flexible management and tax policies. Learn how to create an LLC in Texas, including information on naming your company, getting a registered agent, filing fees, taxes and more.

6. File an Operating Agreement

Once the Secretary of State approves your Certificate of Formation, you should hold a company meeting to ratify the operating agreement. At this point, your LLC will be ready to obtain a federal Employer Identification Number (EIN).

The operating agreement sets out how your LLC will be managed. For example, it will determine whether the company will be member-managed or manager-managed and how much of a stake in the company each member will have.

It will also establish procedures for holding regular meetings of members and managers. Though not required by law, these meetings are vital to maintaining the stability of your business.

7. Apply for an EIN

Matt Horwitz is the founder of LLC University, which provides clear and concise instructions on how to form a Texas LLC. He has a Bachelor’s degree in business and uses his knowledge to convert complex state laws into easy-to-follow lessons.

When applying for an EIN, select the type of entity you are creating from the drop-down menu. Then, enter your name and address, and answer a few basic questions.

Be sure to include a valid email address, as you’ll receive your approval documents by email if you apply online. You’ll also need to choose whether your LLC is member-managed or manager-managed, and designate a primary address for the entity.

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