Saturday, August 15, 2009

How to form an LLC in Texas

Many companies in Texas choose to use a limited liability company (or LLC) for their business. LLCs are great small business entities because they provide limited liability while also providing flexibility for taxing purposes.

To form an LLC, the first step is to choose a name for your limited liability company. You can use almost any name you want, except for names that are too close to the names of existing LLCs, violate someone else's trademark, or a few restricted names. You can check the LLC name options by contacting the Texas Secretary of State's Office.

The second step is to file a Certificate of Formation. This certificate, which used to be called Articles of Organization, lists basic information about your limited liability company. The information you will need includes:

  1. Name of the LLC

  2. Name and address of the Registered Agent

  3. Address of the LLC's principal office

  4. Names and addresses of the LLC Managers

The registered agent is a person that will receive formal notices from the State of Texas about matters involving the LLC. The registered agent will also be the person that will be served with any lawsuits involving the limited liability company. The LLC managers are essentially the same as a board of directors; they will manage the day to day operations of the limited liability company.

The third step is to file the Certificate of Formation and the required filing fee to the Texas Secretary of State. Once you receive confirmation (Certificate of Filing) from the Secretary of State, your limited liability company will be official and the LLC formation complete.

However, you probably also need to:

  1. create an LLC Operating Agreement

  2. sign initial LLC meeting minutes (or a written consent)

  3. order a corporate record book and issue the LLC membership units (LLC stock)

  4. apply for a federal tax id number

  5. apply for any licenses or permits needed for your business

If you need help in starting an LLC, Peterson Law Group has 2 ways to help you. You can use our full service law firm or you can use our self help virtual law firm.

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