How to Form a Limited Liability Company in Texas

Follow these 5 Steps to Form a Texas LLC.

Name Your Texas Limited Liability Company
Selecting a Registered Agent in Texas
Fill out the Texas Certificate of Formation form.
Make an Operating Agreement for a Texas LLC.
Obtain an EIN

It is simple to form an LLC in Texas.

To form a Texas LLC, you must submit the Certificate of Formation with the Texas Secretary of State, which costs $300. You may apply both online and by mail. The Certificate of Formation is the formal legal document that establishes your Texas LLC.

STEP 1: Give Your Texas LLC a Name

The first and most significant step in forming an LLC in Texas is deciding on a name. Make certain that the name you chose conforms with Texas naming rules and is readily searched by prospective customers.

1. Follow the Texas LLC naming guidelines:

Your firm’s name must include the term “limited liability company” or one of its acronyms or words: “LLC, L.L.C., Limited, Ltd., Company or Co.”
Your LLC’s name cannot include terms that may be confused with a government organization (FBI, Treasury, State Department, etc.).
Restricted terms (e.g., bank, attorney, university) may need extra documentation and the participation of a licensed professional, such as a doctor or lawyer, in your LLC.
The Texas Secretary of State’s guidelines include a comprehensive list of name laws in Texas.

2. Does the name exist in Texas? Check the Texas Comptroller of Public Accounts website to see if the name you desire isn’t already taken.

3. Is the URL accessible? We suggest checking online to see whether your company name is accessible as a web domain. Even if you don’t intend to construct a company website right away, you may want to purchase the URL to prevent others from gaining it.

STEP 2: Select a Texas Registered Agent

A Registered Agent must be appointed for your Texas LLC.

What exactly is a Registered Agent? A registered agent is a person or corporate organization that receives vital tax forms, legal papers, lawsuit notices, and other government communication on your behalf. Consider your registered agent to be your company’s point of contact with the state.

Who is eligible to be a Registered Agent? A registered agent must be a Texas citizen or an organization, such as a registered agent service, that is permitted to do business in Texas. You may choose someone from your organization, even yourself.

A Registered Agent must provide written or electronic approval to Appointment. The following information should be included in the consent statement:

Your company’s name
An explicit declaration that the person chosen agrees to act as the LLC’s registered agent.
The person chosen as the registered agent’s name
The registered agent’s signature
The execution date

It is not necessary to submit the consent statement with the secretary of state. View the Acceptance of Consent Form 401-A for more information on this requirement, as well as a fillable consent form.

STEP 3: Submit your Texas LLC Certificate of Formation.

You must submit Form 205 – Certificate of Formation with the Texas Secretary of State to register your Texas LLC. You may submit your application online, via mail, or in person.

STEP 4: Draft a Texas Limited Liability Company Operating Agreement.

An operating agreement, also known as a business agreement in Texas, is not necessary for Texas LLCs, although it is recommended.

What exactly is an operating agreement? An operating agreement is a legal document that outlines an LLC’s ownership and running processes.

Why are operating agreements necessary? A detailed operating agreement guarantees that all firm owners are on the same page and decreases the likelihood of future disagreement.

STEP 5: Obtain a Federal Employer Identification Number (EIN) for your Texas LLC.

What exactly is an EIN? The Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number (FTIN), is a nine-digit number issued by the Internal Revenue Service (IRS) that is used to identify a business entity and keep track of a business’s tax reporting. It is effectively the company’s Social Security number (SSN).

Why do I need an EIN? An EIN is necessary for the following purposes:

To establish a commercial bank account for the firm
In terms of federal and state taxation
To recruit workers for the firm

Where can I get an EIN? After founding the firm, the business owner obtains an EIN from the IRS (free of charge). This may be done online or in the mail.