In Texas, forming a limited liability corporation (LLC) is simple. We’ve designed a Texas LLC creation checklist to make things even simpler.
For small firms, a limited liability corporation provides liability protection and tax possibilities. As a result, forming an LLC is one of the most common company forms for Texas small enterprises and startups.
This Checklist for Starting an LLC in Texas outlines the processes you must complete while forming an LLC.
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Checklist for Texas LLC Formation
Our Texas LLC setup checklist can assist you in getting your firm up and running promptly. The following are the initial actions you must do while establishing an LLC:
Your LLC’s name
Select a registered agent.
Send in your Certificate of Formation.
Make a business agreement.
Obtain an EIN
Your Company’s Name
When you’ve chosen to establish a new company, the first step is to come up with a name.
When naming your company, take the following points in mind:
Legal Prerequisites
Your name must be distinct and fit Texas naming regulations, which include:
The words “limited liability company” or “limited company” or one of its acronyms must be in the LLC name (LLC, L.L.C., LC, or L.C.).
Your LLC’s name cannot include terms that may be confused with a government organisation (e.g., FBI, Treasury, State Department, etc.).
Your name must be distinct from any other current company in the state. This covers reserved names in Texas.
You may do a Texas LLC name search to see if your company’s name is distinctive and recognisable.
Domain Title
It’s a major benefit if your company name is already accessible as a web domain. If the domain is not accessible, there are frequently inventive alternatives.
Marketing
You want your brand to be simple to advertise. For various firms, this might signify different things.
Select a Registered Agent
LLCs in Texas must have a registered agent. A registered agent is a human or legal organisation that receives tax and legal paperwork on your behalf.
When you submit your LLC’s Certificate of Formation, which is the principal LLC formation document in Texas, you must choose your registered agent.
A member of the LLC or another person in the firm may serve as the LLC’s registered agent if they match the following criteria:
Is at least 18 years old
Has a physical address in the state where the company was founded.
Is accessible during regular business hours (in person)
However, it is typically a good idea to use the services of a registered agent. Hiring a registered agent service has a few advantages:
Observance of the law
Mind-set tranquillity
Flexibility
Privacy
Documents for File 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.
You will include some basic corporate information in this paper. This contains its location, registered agent, whether it is controlled by members or by managers, and its owners.
The filing cost for a Texas Certificate of Formation is $300.
Create an Operating Agreement for your LLC.
An operating agreement, also known as a business agreement in Texas, is a legal document that details the ownership and member responsibilities of your limited liability company.
While an operating agreement is not needed by law in Texas, we suggest having one for many reasons.
For starters, an operating agreement may aid in the prevention or resolution of disagreements amongst LLC owners. Even if your firm is a single-member LLC, an operating agreement may give it legitimacy and guarantee that courts respect the organization’s limited liability status.
Operating agreements typically include at least six major sections:
Voting and Organizational Management
Distributions Capital Contributions Membership Changes Dissolution
Obtain an EIN
An Employer Identification Number (EIN) is your LLC’s equivalent of a Social Security number (SSN). It is also known as a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN) (FTIN).
To create a business bank account, most banks will demand an EIN. If any of the following apply to your firm, you will also need an EIN:
Your company employs people.
Your LLC has several members.
Your LLC is required to submit excise taxes.
Nonwage income paid to a nonresident alien is taxed by your LLC.
Getting an EIN is an excellent idea even if you operate a single-member LLC with no workers. To create a business bank account, most banks need your LLC to have one. To learn more about why your LLC should obtain an EIN, see our article 7 Benefits of Getting an EIN.
Following the formation of a Texas LLC
Following the formation of an LLC, there are many things you should do to ensure that you comply with any applicable local, state, and federal rules, maintain your liability protection, keep correct financial records, and attract clients to your firm.
Register to Pay Taxes
If you’re selling a tangible item, you’ll need to apply for a seller’s permit with the Texas Comptroller of Public Accounts. This certificate enables a company to collect sales tax on taxable sales.
If you have workers in Texas, you must register for Unemployment Insurance Tax on their behalf with the Texas Workforce Commission.
Hire an Accountant
Many small company owners believe they can handle their own accounting and choose not to pay for a professional service. Hiring professional accountant, on the other hand, may save you money, worry, and perhaps legal issues in the long run.
Investigate and Apply for Business Licenses
One of the most crucial things to accomplish after creating an LLC is to get the necessary company licences and permits.
The sales tax permit, often known as a seller’s permit, is the most important state-level authorization or licence in Texas.
Furthermore, firms in particular professions or sectors may need additional licences or permissions. A full list of state licences and permissions is available from the Texas Business Permits Office in the Business Permits and Licenses Guide.
The website of the Texas Department of Licensing and Regulation also has information on various statewide professional business licences.
Depending on your location and company activity, you may or may not need additional licences or permissions from your local government in Texas. For further information, contact your local municipal or county government office.
Establish a Business Bank Account
Opening a company bank account is an important aspect of keeping your LLC’s corporate veil and limited liability protection intact. You must maintain your personal financial accounts separate from the LLC’s accounts and never use your personal bank account or credit card to make company expenditures.
Purchase Insurance
Every limited liability company (LLC) should have some sort (or types) of business insurance.
Your LLC should, at the very least, have general liability insurance, which is a wide insurance coverage that protects your company against litigation. Other insurance coverage that an LLC may need depend on the sort of company, whether or not you have workers, and other criteria.
Create a Web Presence
Every firm should have an online presence. This includes the following:
A web page
Accounts on social media
A channel on YouTube
If you are not comfortable creating your own website, there are several tools and website builders available to assist you in creating your own company website.
Issue a Press Release
A press release is a simple and low-cost technique to market your new company. A press release is an official statement issued by a company that is sent to the press for public consumption. Typically, press releases are brief and to the point.