As per Texas law, the name you pick for your LLC should have any of the words: ‘Limited Liability Company’ or alternatively, ‘Limited Company’. Abbreviations ‘L.L.C.,’, ‘LLC,’, ‘L.C.,’ or ‘LC,’ can also be used. For ‘Limited Company’, Limited can be abbreviated to ‘Ltd.’ or ‘LTD.’ and company can be ‘Co.’.
The LLC name should also be distinguishable enough from any reserved or registered business entity name with the Texas Secretary of State. Name availability can be checked using SOSDirect.
Should name be valid and available, an Application for Reservation of an Entity Name can be filed with the Texas Secretary of State to reserve it for 120 days. The reservation may be filed online through SOSDirect or through mail with a filing fee of $40.
A Texas LLC must retain the services of a Registered Agent as it is a compliance requirement. Under Texas law, an individual residing in Texas or a business entity registered to conduct business in Texas can be a Registered Agent.
A physical street address in Texas must also be provided upon designation. The state of Texas does not allow for the business owner to be its own Registered Agent.
To date, a Registered Agent service costs up to $160 every year. However, if you incorporate an LLC using IncFile, a Registered Agent service free of charge will be provided to you.
A Certificate of Formation must be filed with the Texas Secretary of State to be legally recognized as a Texas LLC. The following information is required in the filing of the certificate:
The certificate can be filed online via SOSDirect or through postal mail with a $300 filing fee.
For a Texas LLC with more than one member without any employees, a federal Employer Identification Number has to be requested. If the LLC only has one member, a federal EIN still needs to be obtained if it will have employees in the present or the near future or when it is taxed as a Corporation.
An Employer Identification Number can be conveniently requested through the online application available at the IRS website for free.
A separate bank account for your business must be created to ensure that your personal finances do not get mixed in with the business ones. A bank account dedicated solely to business activities allows you to closely supervise income and expenses that can be very useful come tax time.
Recommended Resource: For a list of the best business banking accounts, this resource guide can point you to some of the most viable options.
The five items enumerated in this to-do list are by no means state mandated, but these are considered business best practices in the formation of an LLC. Although there is no obligation to follow these steps, doing so increases your chances of a good headstart in your business.
A business plan benefits you and your Texas LLC. It can jumpstart a business because it can be an invaluable tool to obtain startup capital funding.
Then, it is the very roadmap that serves as an internal tool to guide a business towards a clearer path of being organized and keeping close track of things. Writing a business plan, whether it’s hundred pages’ long or just one single page is now made easy with the help of resources such as below.
Filing the right Texas business taxes on time ensures that you are up-to-date with state obligations. To begin with the task of complying with all the necessary requirements for Texas business taxes, check the Texas Comptroller of Public Accounts.
Recommended Resource: Efficiently managing business finances allow you to comply with Texas business taxes faster and easier. Xero is a small business accounting tool that helps manage your finances. With Xero, there is no need to painstakingly go through each and every receipt. Try Xero for 30 days’ free trial!
When you register an LLC, it is now your responsibility to also obtain the necessary business licenses to operate within state laws. These licenses and permits are also beneficial for your business, foremost because it protects your business as well.
Recommended Resource: For professional help in obtaining all the necessary business licenses and permits for your Texas LLC, this resource roundup is a good deal. If doing this task yourself, you can check this resource guide provided by SBA.
An Operating Agreement outlines the internal arrangement of the LLC’s members financial and managerial duties and responsibilities. Among other things, an Operating Agreement sets operating guidelines among members of the LLC.
This internal document also defines the LLC’s operating terms. It also safeguards your limited liability status. This Operating Agreement sample is fully customizable, so you can easily fit it to your LLC’s needs.
A website is more than just an online presence for your business, as it provides a host of benefits too. From getting prospective clients to showcasing your goods/services to using it as a sales funnel, a website is a definite must for your Texas LLC. Bluehost’s one-click installation of WordPress is a big help to get started on your business website.
Resource for Getting Started: For a walkthrough on how to start a business, use this step-by-step guide.
Please note that this guide is only for informational purposes. It does not represent a legal document or advice nor should it be considered as such. Always consult a business lawyer for details and legalities on starting a Texas LLC.