How To Form an LLC In Texas
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1. Choose a Name for Your Texas Limited Liability Company
Check for an Available Name for the LLC in Texas: You need to check for name availability before you decide on a name for your LLC. To check for name availability, search online databases and other official records. If you go to the official website of the Texas Secretary of State you can search a database of business entities: Texas LLC.
Reserve a Name for Your Texas LLC: You do not need to reserve a name for your LLC, but you might consider reserving a name if you do not plan to file Certificate of Formation immediately. At Texas LLC you can download an application to reserve a name for your LLC. You need to pay a $40.00 filing fee to have your name reserved for a period of 120 days.
Filing for Trademarks Protection and Doing an LLC Name Search: Though the name that you have decided on for your LLC may be available in Texas, it could be in use by an LLC in another state. If an LLC in another state is using the same name as your LLC, there could be restrictions on how you use the name. Consult an attorney to learn more about what these restrictions could be and to learn how to protect the name that you have chosen. At __________________ you can learn more about choosing a name for your LLC.
Texas LLC Name Requirements: You need to include the designation "LLC," “L.L.C.,” “L.C.,” “Ltd. Co.,” or "Limited Liability Company” in the name of your Texas LLC. Please note that “LLC” stands for “Limited Liability Company,” NOT “LLC Corporation,” “Limited Liability Corporation,” or anything else that signifies a corporation. An LLC is NOT the same kind of business entity as a corporation. LLCs are organized differently than corporations.
2. Find a Registered Agent in Texas
You need to choose a registered agent before you form your Texas LLC. Your registered agent will act as an agent for service of process and will receive all tax forms, other official documents and forms, and legal notices for your LLC. Many corporate services companies in Texas provide registered agent services to LLCs for a fee of around $75.00 to $150.00.
3. File a Certificate of Formation with the Texas Secretary of State
Minimum Requirements for the Certificate of Formation: The Certificate of Formation that you file for your Texas LLC needs to include the name and purpose of your LLC, the name and business address of your registered agent, and the name and address of the organizer. You also need to state whether the LLC will be managed by a manager or by the members and include the name and address of each governing person. The organizer needs to sign the Certificate of Formation. At Texas LLC you can download a form for this document.
Other Texas Legal Provisions: Think about including additional provisions in your Certificate of Formation. Consult a lawyer to learn which additional provisions are the most beneficial and important for your LLC.
Where to Submit the Certificate of Formation for Filing: Send your signed Certificate of Formation in duplicate to the Secretary of State, P.O. Box 13697, Austin, TX 78711-3697.
Filing Fee: The filing fee for a Certificate of Formation in Texas is $300.00.
4. Form a Texas Limited Liability Company Agreement (Operating Agreement)
You need to file a Certificate of Formation to form an LLC in Texas, but to govern the day-to-day operations of your LLC you need to create an LLC Agreement. Your LLC Agreement will govern operations of your LLC much the way that by-laws govern a corporation. You can create an LLC Agreement that is specific to the requirements of your company. Think about the purpose of your LLC when you create your LLC Agreement. Are you running a manufacturing company, a restaurant, a real estate holding company, a business based online, or some other kind of business? Your LLC Agreement can address issues such as what the procedures for admitting new members and voting will be, how the members will be organized, how money will be distributed, and how interests will be transferred. Think about what will happen if you decide to sell the company or incorporate one day. Because there are so many issues to think about when you create your LLC Agreement, it is best to consult a lawyer and an accountant. A lawyer and an accountant can help you to create an LLC Agreement that is in compliance with all state requirements and federal tax laws.
Once you create your LLC Agreement, you need to prepare to make securities filings for your LLC, obtain an EIN from the IRS, and apply for a business license for the location where you will be doing business. Many corporate services companies in Texas provide assistance with these filings to LLCs for a fee. At http://www.cityapplications.com/business-licenses.html you can learn more about how to get a business license in your city.
5. Qualify Your Texas LLC to Do Business in Other States
You need to qualify or register your LLC before you will be permitted to do business in other states. You need to qualify your LLC before you will be permitted to do business in your home state if the main office of the company is located outside of Texas. You need to be prepared to pay taxes in your home state anytime you do business in other states. At [Qualifying to Do Business in Other States] you can learn more about how to qualify your LLC to do business in other states.
6. Make Annual Filings and Pay Annual Taxes in Texas
After your LLC is registered in Texas, you may need to make some periodic filings with the Secretary of State. Contact the office of the Secretary of State if you have any questions about what filings you may need to make for your LLC. You need to file a tax report annually and pay the necessary taxes for your LLC. At the official website of the Texas Comptroller, you can learn more about the taxes that will apply to your LLC: Texas LLC
You need to make many decisions when you are in the process of forming an LLC in Texas. It is best to consult an accountant and an attorney so that you can be confident that forming an LLC is the right choice for your company and that all your paperwork is being processed correctly.
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This site is for informational purposes only and does not constitute legal, financial or tax advise. The information on this site should not be relied upon as an official source of information and should be independently verified.