How to File the Certificate of Formation in Texas
In order to file your LLC’s Certificate of Formation, you will need to fill out the following information:
Article 1: Entity Name and Type
Your LLC’s name will have to be both creative and legally compliant.
You will need to make sure that your business name:
- Satisfies Texas’ naming guidelines
- Is not already taken by another business in Texas
There are certain guidelines that you will need to follow when naming your LLC:
- You must include the words “limited liability company” — or any abbreviation (e.g., LLC, L.L.C, etc.).
- You cannot use any words that suggest that your LLC is a government agency (e.g., FBI, State, etc.).
- Professional licensed services (e.g., doctor, lawyer, etc.) must include the words "professional limited liability company", "professional limited company", or any abbreviation (e.g., P.L.L.C, P.L.C., PLLC, etc.).
For a full list of naming guidelines see the Texas naming statute.
Check Name Availability:
Do a name search with the Texas Comptroller of Public Accounts to check your LLC name’s availability. If you are unsure about what to name your LLC, use our business name generator to brainstorm business names.
Register Your Domain Name:
You’ll want to check that your business name (or something very similar) is available as a web domain.
Find a Domain Now
Article 2: Registered Agent and Registered Office
Your Texas registered agent can be either an individual or business entity, like a registered agent service.
If it is a business entity, it can be both a domestic entity or a foreign entity, as long as they are registered to do business in Texas.
When it comes to individuals, keep in mind that they are legally required to be Texas residents in order to act as your business’s registered agent.
This means that your LLC’s registered agent can be:
- Another LLC member
- A specialized registered agent service
Note: Your registered agent needs to have provided either a written or an electronic consent form to yourself, although this does not need to be submitted with your LLC’s Certificate of Formation.
Recommended: Get a year of free of registered agent services when you form your LLC with Northwest ($29 + State Fees).
Article 3: Governing Authority
You must include whether your LLC will be member or manager-managed. For the latter, you will need to include the names and addresses of each LLC manager. Otherwise, you will need to provide the names and addresses of each LLC member.
Article 4: Purpose
You will need to state the purpose of your LLC (e.g., to conduct business legally in the state of Texas, etc). You will need to ensure that your purpose is not “expressly prohibited” under Chapter 2 of Title 1 or Title 3 of the Texas Business Organizations Code (BOC).
Article 5: Initial Mailing Address
This is the registered office address that will be used by the Comptroller of Public Accounts for sending tax information and correspondence to your LLC.
Optional: Supplemental Provisions/Information
Your LLC will exist in perpetuity (i.e., forever.) unless otherwise specified. If you want your LLC to exist for a specified period, you will need to note this in your Certificate of Formation.
Organizer, Effectiveness of Filing, and Execution
Finally, you will need to note who the organizer of the LLC will be. Your organizer will be required to sign your Texas LLC Certificate of Formation before filing it with the Secretary of State.
How to Submit the Certificate of Formation
You can mail this form to:
P.O. Box 13697
Or, you can hand-deliver it to:
James Earl Rudder Office Building
1019 Brazos St.
Austin, TX 78701
To file online, use the SOSDirect portal. You will need to create an account.
Steps After Filing the Certificate of Formation
After you have filed your Certificate of Formation, we recommend taking the following steps:
1. Get an EIN
An Employer Identification Number (EIN), also known as a Federal Tax ID Number, can be thought of as your business’s Social Security number. It is used by the IRS to identify your business and ensure that it is operating legitimately.
According to the Internal Revenue Service (IRS), an LLC is required to obtain an EIN if:
- It hires employees
- It is required to file excise tax forms
- It is a multi-member LLC
- It withholds taxes for non-wage income paid to nonresident aliens
That being said, we recommend that all LLCs get an EIN so that they can open a business bank account.
You can apply for an EIN for your LLC by filing Form SS-4.
2. Create an Operating Agreement
LLC operating agreements, known in Texas as company agreements, are legal documents that outline the responsibilities, duties, and rights of all members of your LLC.
Even though state law does not require you to draft a Texas LLC operating agreement, it is still highly recommended. This is the case even if you operate as a single-member LLC (e.g., to avoid piercing your corporate veil, etc.).
Recommended: Use our free LLC operating agreement template to create your very own LLC operating agreement quickly.
3. Apply for Business Licenses
After you have registered your LLC and applied for your EIN, you will want to ensure that your business remains “legitimate”. You can do this by applying for any local, state, and federal business licenses that you may need.
For a more in-depth overview, see our guide on how to get business licenses in Texas.
4. Create a Business Website
Now is a good time to build a business website. A business website adds to your credibility, branding, marketing, and customer experience.
Your website can also be a gateway to your other platforms, including your LLC’s social media accounts, online stores, and contact information.
Recommended Service: Check out the GoDaddy Website Builder to get started.
5. Get a Business Bank Account
Next, you will want to open a separate bank account. This can offer both legal and financial benefits.
Choosing to open a business bank account can allow you to:
- Allow you to accept credit card payments
- Offer high-yield savings accounts
Most premium online banks also come with third-party integrations, including accounting and ecommerce tools. These can help you manage your budget, automatically detract a percentage of your revenue for your LLC taxes, and expedite your online payments.
Besides the financial benefits, opening a business bank account can allow you maintain your LLC’s corporate veil by separating your personal and business finances.
Recommended: Interested in getting started? See our in-depth review of the best banks for startups and entrepreneurs in 2023.
6. Build Business Credit
When you are just starting your business, you will need to build your business credit from the ground up. The fastest way to do this is by opening net 30 accounts and getting a business credit card:
- First, you will want to open at least five net 30 accounts that report to business credit bureaus.
- Then, you can apply for an easy-approval business credit card from a company like BILL.
Taking these steps will help you increase your business’s cash flow and build business credit fast, which will be essential when you are applying for higher-end business credit cards and large business loans in the future.
See our How to Build Business Credit guide for more information.
7. Find a Business Phone System
You will also likely want to invest in a business phone system. This can go a long way in improving your credibility and can ensure that you have placed yourself in a position that always allows you to provide adequate customer service.
Most high-end business phone systems will include the following features:
- Unlimited calling
- Conference calling
- Voicemail transcription
- Toll-free and vanity phone numbers
- Team collaboration tools
- Hold music
Recommended: Check out our review of the best business phone systems to get started.
8. Get Business Insurance
As a business owner, you will also want to consider whether you will benefit from purchasing business insurance.
This will be highly dependent on your industry, amount of risk, and business operations. It can also depend on the existence — and number — of employees in your LLC.
There are several business insurance policies that you may want to consider, although this can be highly situational. Below we have provided an overview of the most common small business insurance policies:
See our Small Business Insurance article for more information.
9. Taxes and Accounting
Next, you will want to learn everything you need to know about how LLCs are taxed. This is important because LLCs are a very flexible business entity, and — depending on the situation — can choose to be taxed as:
- Pass-through entities
- C corps
- S corps
Generally speaking, we recommend talking to a professional attorney or law firm if you are in need of the most up-to-date tax advice (e.g., whether you need to pay sales tax, etc.).
Working with an accountant can help you manage all your business expenses and taxes effectively and on time, and ensure you do not face any penalties or back taxes when starting out.
Need help with accounting? Check out our review of the best accounting software.