If you’re looking to safeguard your company and run with greater flexibility and adaptability, setting up an LLC in Texas is a wise decision. The method isn’t as difficult as it might seem, but you’ll need to adhere to a few key steps to keep things legal and smooth. From choosing your company’s name to filing documents, each step serves a important part—so before you move forward, there’s a key factor to keep in mind.
Want to protect your business and gain flexibility? Forming an LLC in Texas is a wise decision. While it’s relatively simple, you must adhere to essential steps and stay in compliance and run smoothly. Starting from choosing your business name to submitting forms, each action becomes vital—here’s what to do first.
Choose a Name for Your Texas LLC
Prior to filing, it’s necessary to pick a unique name that meets Texas state rules.
Begin by the search tool of the Texas Secretary of State to verify name availability. Your LLC name must include “Limited Liability Company,” “LLC,” or “L.L.C.”
Stay away from words that might suggest government departments such as “bank” or “treasury.”
Avoid using prohibited words unless you have specific authorization.
After choosing your name, consider holding it to keep it while you complete your formation documents.
Appoint a Registered Agent
Every Texas LLCs must designate a registered agent to accept legal documents and official notices on behalf of the business.
The representative must have a physical location in Texas—P.O. visit site boxes won’t do.
It’s possible to act as your own agent, hire a paid service, or appoint someone you trust.
Ensure your agent is dependable during the normal working hours to accept attachments and notices. Reliability is key to staying compliant.
Submitting Your Texas Certificate of Formation
To legally form your Texas LLC, file the Form 205 with the Texas Secretary of State.
You can do this via the SOSDirect portal or send a paper form.
The form asks for your LLC’s name, address, agent details, and management structure.
Review all details carefully; errors can cause delays.
Filing fee is $300, payable by check or online payment methods.
After approved, this submission establishes your LLC in Texas, giving you legal recognition and the ability to operate legally.
Establish Rules for Your LLC
Though Texas doesn't require an LLC to have an operating agreement, it’s a wise move to outline ownership roles, profit sharing, and responsibilities.
It also helps in avoiding disputes among members and clarifies procedures for matters like voting and management.
Even if you’re a single-member LLC, drafting an operating agreement adds legitimacy and additional legal protection.
Download a sample or write your own tailored document, and everyone should sign it to confirm each member’s responsibilities.
Handling Tax IDs and Licensing
After forming your LLC, you need to obtain an EIN from the IRS—this is cost-free and needed for financial purposes, even if you don’t plan to hire employees.
Review whether yourbusiness needs additional licenses or permits, based on your activities.
Also, file annual Texas Franchise Tax Public Information Report to keep your LLC’s compliance and prevent penalties.
Summary
Starting your Texas LLC is easy by following these steps: Pick a unique name, designate a reliable registered agent, file formation documents, draft an operating agreement, and obtain your EIN. Stay up with ongoing state requirements like annual reports and licenses to keep a compliant, thriving business in Texas.