The Texas Secretary of State has a comprehensive guide to LLCs with information on fees, permits and much more.
A good starting point is to review the Secretary of State’s naming guidelines and avoid words that could confuse your business with a government agency (e.g. FBI, CIA).
The next step is to provide your purpose. You can be as general or specific as you want.
The first step in starting an LLC in Texas is choosing a business name. You will need to select a name that is distinguishable from other businesses in your state and include the words “limited liability company” or the abbreviation “LLC.” You can do a name availability search through the secretary of state’s office website.
You will also need to list a registered agent for your LLC in Texas. This is an individual or business entity that will accept service of process and official documents on your LLC’s behalf. You may use a Texas resident or an entity authorized to do business in the state of Texas as your registered agent.
While an operating agreement is not a legally required document in Texas, it is highly recommended for any LLC. This internal document will outline your LLC’s management structure and ownership information.
An LLC is a popular business structure choice for small businesses because it offers flexibility, legal protections and tax advantages. However, forming an LLC requires careful steps to ensure that the company is formed correctly and meets all state and federal legal requirements. Failure to do so could expose personal assets to liability and jeopardize the company’s business continuity.
Create a comprehensive business plan that details the legal and financial foundation of your new LLC. This will help you establish the goals and direction of your business and also serve as a tool for pitching investors or finding other forms of funding, such as grants. It’s a good idea to revisit and update this document regularly as your business grows.
A registered agent is an individual or business that receives legal and official documents for your LLC. In Texas, your LLC must have a registered agent who is either a Texas resident or authorized to do business in the state.
Your LLC may also need a permit or license depending on the type of business you are conducting. For example, if you sell goods or services, you must obtain a sales tax permit.
Hiring an online LLC formation service can help you save time and money by taking care of all the initial paperwork for you. These services can also be helpful in maintaining your business and helping you stay in compliance with the law. Some services include a free Registered Agent for the first year.
Employer Identification Number (EIN)
You’ll need an EIN if your LLC has employees or will be taxed as a corporation at the federal level. You can apply online or download the form and submit it by mail. If you file online, you can also reserve a business name (up to 120 days).
The IRS needs the following information to issue an EIN: • The registered agent’s name and address. • Whether the LLC is member-managed or manager-managed. • The reason for the EIN request. • The name and signature of the responsible party, which is typically a member or manager but can be anyone. • The type of taxation the LLC is choosing (there are 4 options). The LLC cannot be in active status when applying for an EIN.
Business Licenses & Permits
The LLC is an extremely popular business structure, offering liability protections and flexible tax and management policies. As an added benefit, a separate business identity makes it easy to open a business bank account and apply for credit cards.
While the state of Texas doesn’t require LLCs to write a business plan, it is a good idea. Many bankers ask for one as part of the application process and it can help keep you on track as you launch your new venture.
If your LLC will be involved in a federally regulated activity, you’ll need to obtain an EIN. The IRS’s online interview-style application can be accessed via the EIN Assistant. You may also need a resale certificate or sales tax permit, depending on your particular business activities.