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How To Get An LLC In Texas?: 2024 Guideline

Max Smith

Reading Time: 8 minutes

If you are worried about protecting your business in Texas, an LLC is a savior. Texas has pretty convincing LLC policies and holds futuristic ideas. 

An LLC in Texas can be formed by filing articles of organization with the Texas Secretary of State. All These can be done by yourself or by hiring an LLC formation service or an individual attorney. Also, you need to select a name that is not booked yet, an operating agreement, obtain an EIN, and other details. 

To know the process and tactics in detail, stick with me here.

LLCs offer limited liability protection for their owners, also known as members.

At first glance, an LLC in Texas might feel quite expensive. But if you know the right process and tactics, it’s worth the cost.

Operating your business as an LLC will give your company credibility and professionalism. It will show potential customers, partners, and investors that you are committed to running a legitimate and stable business.

LLCs in Texas allow for flexibility in the management structure. Owners can choose to run the business themselves or appoint managers to handle day-to-day operations. These are known as “member-managed LLCs” and “manager-managed LLCs.” 

Another beneficial aspect of Texas LLC is its tax benefits. It has pass-through entities for tax purposes, which means that business profits and losses are passed through to the individual members and reported on their personal tax returns. This can result in lower overall tax liability for the business owners.

Also, the processing is easy and quick. So, getting Texas LLC is pretty popular among business owners around the USA.

Texas LLC Requirements

Before we get into the process, it is inevitable to know the key requirements here. To start an LLC in Texas, you should take care of a few things. 

These are:

  • You should provide information related to your LLC, such as its type, the number of members, and the address for certification. 
  • You will need a registered agent. For further verification, this agent should also have a physical address in Texas. You can get registered agent services from LLC companies around Texas.
  • You can get accountants, physicians, or attorneys to complete further documentation with your LLC.
  • You have to pay LLC taxes and fees. In Texas, there are Annual reports and franchise taxes. You have to go through annual reporting every May from the 1st to the 15th of the month. You might have to pay other taxes. You can check on the owner’s toolkit and Texas laws for that.
  • You must grab a federal tax identification number or EIN to authenticate your LLC. To get an EIN, you will also require a business account. The target of this requires, not to keep your business finances separate and safe.
  • You must check the Texas LLC business license and permit guide. The best thing is that you do not have to pay annual fees for the license. 

How To Get An LLC In Texas: Easy Steps

If you are wondering how to apply for an LLC in Texas, I can help you. Here, I will mention what exactly you need to know to keep it cost-effective and safe:

Step 01: Identify An Available Name

You should find a suitable yet available name for your LLC; in Texas, you can not use any name already registered with another LLC. You should contact the Texas Secretary of State online to find your ultimate LLC name.

Rules to get a suitable LLC name for your LLC:

  • Choose a name that is available and not already used by another company or organization. Check the availability of the name by conducting a name search on your state’s business registration website.
  • Ensure the name accurately represents your business and your products or services. 
  • Choose a name that is flexible enough to accommodate future growth. Suppose you are changing the production concentration, and your business does not represent new ones. That can be a big threat.
  • Avoid using names that are too similar to existing trademarks or registered business names, as this could result in legal issues down the line.
  • Keep the name short, memorable, and easy to spell. Avoid using unusual spelling or punctuation marks that could confuse potential customers.
  • Consider the availability of a corresponding domain name for your website. It’s important to have a consistent online presence that matches your company name.
  • Check for any restrictions on certain words or phrases in your state’s business naming guidelines. Some states have specific rules regarding words like “bank” or “insurance” in business names.

Step 02: You Need a Business Address

You should grab an official business address in Texas. The good news is that both virtual and physical addresses are acceptable here. However, you can just. 

If you are not a resident of Texas and do not own a physical address, you can get a P.O. box or virtual mailbox address. This option is cost-effective and offers flexibility for businesses that primarily operate online. 

You can also lease or rent a physical office space in Texas to serve as your business address. This can also help if you need a professional setting for meetings and operations.

Step 03: Decide If You Want A Registered Agent Service

You can decide between three ways to do the processing: Doing it all by yourself (DIY), getting an LLC formation service, or hiring an attorney. 

If you are a professional and have previous experience with filing and processing, you can do it yourself. However, a registered agent is a great option to avoid extra hassles and the risk of mess. 

Registered agent services know the legal requirements and procedures for receiving and handling official documents. By using a professional service, you can ensure that you comply with all legal requirements and that important documents are processed in a timely and reliable manner.

The decision to use a registered agent service in Texas will depend on your business needs and preferences.

If you are getting a registered agent, you should provide official details (name, signature, date of execution) to the Texas authority.

Step 4: Complete the Filings

Here, you must provide essential information such as the netty type and name, registered agent’s details, governing authority, business purpose, initial mailing address, supplemental provision, and organizer’s aggression.

To file a Certificate of Formation in Texas, you would need to follow these steps:

  1. Obtain and fill out the Certificate of Formation form, which can be downloaded from the Texas Secretary of State website.
  2. Pay the filing fee. The filing fee for a Certificate of Formation in Texas is $300.
  3. Submit the completed form and filing fee to the Texas Secretary of State. You can do this online, by mail, or in person.
  4. Once your Certificate of Formation is approved, you will receive a stamped copy indicating that your LLC has been officially formed in Texas.

You can do this both online and offline. To submit an online form, visit here. To submit an offline form, reach the Secretary of State, at P.O. Box 13697, Austin, TX 78711.

Step 5: Create your Own Operating Agreement For The Business

Having a well-written operating agreement can help prevent misunderstandings and conflicts among members. This can protect the company’s interests and establish a clear framework for managing the LLC effectively. 

When drafting an operating agreement, ensure that it complies with Texas state laws and accurately reflects business intention. Once the operating agreement is finalized, all members should sign and date the document to make it legally binding.

Things to add to your LLC operating agreement: 

  • Details about the formation of the LLC, including the names and addresses of all members, their ownership percentages, and their initial contributions to the company.
  • Whether the LLC will be member-managed or manager-managed, and the roles and responsibilities of each member or manager.
  • Procedures for holding meetings, making decisions, and voting on important business matters.
  • How will profits and losses be distributed among the members of the LLC?
  • Restrictions on transferring ownership interests in the LLC, and procedures for buying out a member who wants to leave the company.
  • Any required provisions that the members want to include, such as non-compete agreements, confidentiality clauses, and dispute resolution procedures.
  • The specific procedure for dissolving the LLC and distributing its assets if the members decide to close the business

Step 06: Get An Employer Identification Number

To get an Employer Identification Number (EIN) for your LLC in Texas, you can apply online through the IRS website. 

Go according to the steps below: 

  • Go to the IRS website and search for the EIN application page.
  • Select the option to apply online for a new EIN.
  • Choose the type of entity (in this case, LLC) and answer a few questions about your business.
  • Provide the necessary information about your LLC, including the name, address, and type of business.
  • Once you have completed the online application, you will receive your EIN immediately.

Step 07: File Your BOI Report

A beneficial ownership information report is required to have substantial control over your LLC. Visit the Texas Secretary of State website and navigate the Business Organizations Forms & Fees page. Locate and download Form 205, the Certificate of Formation for a Limited Liability Company. Complete all necessary information on this form. You can stay calm, as the information will be kept private. Once you submit the form, the authority will take 30 to 90 days to update you. 

Well, the BOI report does not apply to all LLCs. 

Last but not least, keep your LLC updated and make sure you are completing all the tax requirements. LLCs in Texas must also file an annual report and pay an annual franchise tax. The taxation will depend upon your business requirements and the type of LLC.

Note: If you are wondering how to start an LLC in Texas for free, it is possible with DIY filings. This way, you can cut off the fees of registered agent/ professional help. However, this is not recommended for everyone

Will Forming LLC in Texas Help My New Business?

Yes, for new business, an LLC is a great option. In every survey and article, LLCs are in the top 5 ranking to form an LLC. 

LLC has a comparatively lower cost of living in the USA. CNBC has ranked it as the 8th stable economy. This state concentrates on gross domestic production. It is a part of their development policy. That is why you will get additional benefits from the Texas government as a new business owner. 

By forming an LLC in Texas, you are free from all personal taxes. They only collect residential or business taxes. This can save you a lot of bucks.

Texas has a skilled workforce, which will be great for any business. CNBC says this is the second-ranked state with a skilled workforce that is constantly working to maintain financial stability in Texas.

Also, Texas has entrepreneur-friendly laws that can grow your business. You can start your business here with only five employees and still provide them with stable paychecks because of the growth.

All these will be a long-term commitment for your LLC and your business in Texas.

Conclusion​

If you are looking to establish a business presence in Texas, getting an LLC is a great step forward. An LLC here has a good reputation to enhance your credibility with customers, suppliers, and business partners in the state. This article mentions all the official procedures on how to create an LLC in Texas, respecting LLC regulations.

Key Points

  • Forming an LLC in Texas can benefit you with a few advantages. These are liability protection and tax flexibility, as well as taxation and accessibility.
  • To form a Texas LLC, it is necessary to select a unique name, file documents with the Secretary of State, appoint a registered agent or DIY filings, obtain an EIN, complete BOI, and keep the updates with taxations. 
  • With Texas LLC, you have to pay franchise tax, but there are no annual fees.
  • Operating your business as an LLC can add credibility and professionalism to your company. Stay aware while creating the operating agreement of your LLC.
  • You will not require any LLC license in Texas. This saves a pretty good amount of money and time. 
  • Go through the LLC filing procedures according to Texas laws. There should not be any mess-ups that can threaten your business. 

Frequently Asked Questions

Do you need a business license LLC in Texas?

No, Texas does not require any general business license for your LLC. This is a big relief for business owners as it saves a good amount of bucks. You might have to get an occupational license depending upon the business you are owning.

How much does an LLC license cost in Texas?

An LLC in Texas will cost you up to $300. The cost can be less than $25 if you own a non-profit organization. Also, the cost can vary with hiring registered agents or LLC formation services in Texas. 

What tax is free in Texas?

In Texas Texas, if you are forming an LLC, you will only have to pay business taxes. Texas is free of personal income taxes. Instead, it concentrates more on sales taxes, local taxes, and use taxes.

Max Smith - LLC Formation

He is a seasoned entrepreneur and legal expert at LLC Formation Hub. With a stellar track record in both business and law, Max simplifies the complexities of LLCs. His practical insights, featured on LLC Formation Hub, empower entrepreneurs across the USA. Max merges business finesse with legal acuity to guide businesses toward success.


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