In order to form an LLC in Texas, you must file a Certificate of Formation with the state. PRIME Corporate Services has put together a step-by-step guide on completing this process. Need more help? You can check out our main informational page or reach out to one of our PRIME advisors for a free consultation.
Step 1: Acquire the Texas Certificate of Formation Form
There are two options for acquiring this form. You can download the Certificate of Formation PDF from the Texas Secretary of State, which will need to be mailed or physically brought to the Secretary of State’s office. The other option is to access the form online through the Secretary of State’s office. To access the form, create a login, then select “Business Organizations,” then “Domestic Limited Liability Company (LLC).
Step 2: Complete the Texas Certificate of Formation Form
The next step in the process is to fill out the Texas Certificate of Formation form.
You must have access to four pieces of information to fill out the form:
- Entity Name and Address
- Name and Address of Agent for Service of Process (Registered Agent)
- Governing Authority Type
- Business Purpose
Entity Name and Address
Your LLC must have a legally correct and unique name to be approved.
The name must fit the Texas naming guidelines (listed below) and not have the same name as another preexisting Texas business.
Texas Naming Guidelines
- The name must include “limited liability company” or LLC or L.L.C.
- The name can’t include the word “lotto” or “lottery”
- The name can’t include government agency-related words (FBI, Treasury, State Department, etc.)
- The name can’t imply that the purpose of the LLC is unlawful
- The name can’t include the words: bank, trust, trustee, incorporated, inc., corporation, or corp.
- The name can’t imply its creation was to benefit war veterans or their dependents
- The name must be different from other registered Texas LLCs.
Check Name Availability
You can check if your desired name is available by conducting a name search through the Texas Comptroller of Public Accounts website.
Register Your Domain Name
One way to secure your business name informally is to see if it is available as a web domain. Purchasing a URL early can help secure your name.
Registered Agent/Registered Office
The registered agent is in charge of handling legal documents for the LLC. An agent name is required when registering your Texas LLC.
The agent must be 18 years or older and live in Texas. They must always be available during business hours.
You also must decide if your LLC will be managed by one or more managers or all of its members.
If you have any questions about this process, schedule a free consultation call with one of our PRIME advisors.
Governing Authority
Before submitting this form, it is crucial to decide if the LLC will be managed by the members or the manager. There are pros and cons to each type of management, so weigh all options before making any decisions.
Purpose
In Texas, LLCs can be formed for the purpose of legal or non-prohibited activities. This can be filed as a “General Purpose” in Article 4. Any purpose which includes tax exemption, deductions, or licensing may require a professional license or special language from the IRS.
Step 3: File the Texas LLC’s Certificate of Formation
You must register your LLC with the Secretary of State.
There are two ways to file your Articles of Organization with this office :
The State Filing Cost is $300. The turnaround time typically processes online filings within 3 days and in-person mail gets filed within approximately 5 – 7 days.
Steps After Your Texas LLC Is Officially Formed
After filing the Certificate of Formation, you should:
- Create an Operating Agreement
- Obtain an EIN
- Open a Business Bank Account
- Get Licenses and Permits
Create a Texas LLC Operating Agreement
It is best practice to create a Texas LLC Operating Agreement, a legal document that outlines the role each person plays within the LLC.
This step is not required but it is still a good idea. This agreement can be filed at any point during the Articles of Organization. This will be kept in your LLC’s private business records.
Obtain an EIN
An Employer Identification Number (EIN) is an LLC’s social security number. This number is needed for hiring employees or opening business bank accounts.
You can get your EIN through the IRS website, mail, or fax.
Open a Business Bank Account
Opening a business bank account is important, in order not to mix your personal with your business assets. The sooner an account can be opened, the less likely it is to mix the assets.
Get Licenses and Permits
Acquiring the proper licenses and permits are key to registering your LLC.
The U.S. Small Business Administration (SBA) guide has federal business licenses and permits guidelines.
The Texas State website is a key place to look for state regulations involving Texas’s permit and license standards.
Local clerks are a good place to ask about county licenses and permits.
PRIME Corporate Services can help you with all of the steps in this process. Reach out to us today for a free consultation!