Texas is a notoriously business-friendly state offering entrepreneurs low taxes and a powerful economy to work with. If you’re ready to register an LLC in Texas, you’ve come to the right place. These are the six steps you need to take to start a Texas LLC today.
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Texas LLC Quick Facts
- Registering an LLC in Texas offers benefits such as limited liability protection, enhanced credibility, and tax flexibility.
- Texas LLCs are formed by filing a Certificate of Formation with the Texas Secretary of State.
- The filing fee to start an LLC in Texas is $300.
- To maintain your Texas LLC, you need to file an Annual Franchise Tax Report and Public Information Report with the Texas Comptroller’s office.
6 Steps to Register a Texas LLC
Fortunately, forming an LLC in Texas is as easy as a couple steps that we’ve mapped out for you below.
Ready to start a Texas LLC? Let’s get into it.
- Name Your Texas LLC
- Appoint a Registered Agent
- File Your Certificate of Formation
- Draft Your Operating Agreement
- Obtain an EIN and Handle Taxes
- File a Beneficial Ownership Information Report
Step 1: Name Your Texas LLC
The first step toward registering an LLC in Texas is naming your business.
Naming an LLC in Texas requires following a few basic rules:
- Your business name must include LLC, Limited Company, or Limited Liability Company in your business name
- Your business name must be unique and distinguishable from any other business entities in the state
- Your business name cannot include certain official terms such as Treasury, FBI, State Department, or CIA
Before you decide on a business name you will need to perform a business entity search on the Texas Secretary of State’s website. To do so, you will need to apply for an SOSDirect account and pay a $1 fee per entity search.
Alternatively, Texas offers a Taxable Entity Search for free.
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Step 2: Appoint a Registered Agent
To register an LLC in Texas, you are required to appoint a registered agent. This is an individual or business entity responsible for accepting important legal documents on behalf of your business such as tax forms, subpoenas, notice of lawsuits, and government correspondence.
The appointed registered agent must:
- Have a physical address in Texas, not a P.O. Box
- Not be the LLC itself (though it can be one of the LLC’s owners or workers)
- Be available at the address during regular business hours
Who can be a registered agent?
Registered agents can be an owner or employee of the LLC, a friend or family member, or a resident of Texas with a physical address in the state. Businesses can also choose to utilize a registered agent service as well.
Step 3: File Your Certificate of Formation
To officially register your LLC, you must submit a Texas Certificate of Formation with the Secretary of State. This is a document that. You can file this document online on the Texas Secretary of State website or by submitting a paper copy of Form 205 by mail or fax.
You will be required to pay a filing fee of $300.
We recommend having the following details prepared:
- Your LLC name and purpose of your business
- Registered agent information such as name, physical address, and phone number
- Management structure (member-managed vs. manager-managed) as well as names and addresses of each manager
- Mailing address for official correspondence and tax information
- Duration or whether the business is formed for a specific time period
- Organizer information responsible for the filing
- Date of business formation
- Supplemental provisions or information you would like to include (this is uncommon)
Quick Note: If you are expanding a business that you’ve already established in another state, you will need to register as a Texas Foreign LLC with the Secretary of State online and pay a filing fee of $750.
Step 4: Draft Your Operating Agreement
Known in Texas as a company agreement, an operating agreement outlines ownership and day-to-day operations of your LLC.
While operating agreements aren’t required for LLCs in Texas, they are a helpful tool to ensure all LLC members are in agreement about roles and responsibilities – reducing conflict moving forward.
Step 5: Obtain an EIN and Handle Taxes
An Employer Identification Number or EIN helps the Internal Revenue Service (IRS) identify and track a business for tax purposes. These numbers are required to open a business bank account, file federal and state tax returns, and hire employees for your LLC.
An EIN is free to obtain from the IRS website.
Step 6: File a Beneficial Ownership Information Report
LLC owners are required to file a Beneficial Ownership Information (BOI) Report with the US Financial Crimes Enforcement Network (FinCEN), as of January 2024.
The information required for this filing is similar to that of the Certificate of Formation and can be filed online.
New LLCs are required to file a BOI report within 90 days of forming their business. Existing LLCs must file between January 1st, 2024 and January 1st, 2025. There are filing exemptions for larger companies that can be found here.
Failure to do so will result in a $500 per day fine.
Next Steps
After registering your Texas LLC, it’s important to:
- Open a Business Bank Account: To protect your assets and maintain your corporate veil, you need to open a business bank account immediately upon forming your business and ideally before you start operating. We recommend opening an account with Lili – sign up online in minutes and get access to financial tools to manage your business.
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- Determine the Necessary Licenses and Permits: Depending on the type of business you’re operating, you will need permits and licenses to stay compliant. To find which licenses and permits you require, check out this guide provided by the state.
- File an Annual Franchise Tax Report: Businesses are required to file an annual franchise tax report before May 15th of every year if they earn more than $2.47 million in annual revenue.
- Submit A Public Information Report (PIR): This is required for all LLCs to maintain good standing. The report can be submitted to the Texas Comptroller’s office and is due annually by May 15th.
- Get Business Insurance: Every LLC should have business insurance. The main types of insurance businesses should obtain are general liability, workers’ compensation, and professional liability. Next Insurance offers fast, flexible, and affordable options.
Request an online quote with NEXT Insurance
Additional Tips for Success
- Establish your target market early on to generate better results from marketing and advertising campaigns. Knowing your audience allows your business to create more value and build a stronger brand.
- Work on your entrepreneur mindset. Always be evolving, adapting, and innovating to meet the challenges of entrepreneurship head-on.
- Build your network. Whether that is other entrepreneurs, mentors, or partners, building a strong network can help increase visibility for your business and open up new opportunities.
Conclusion
Texas is known for its business-friendliness making it perfect for entrepreneurs looking to launch a business in the lone star state. Registering an LLC in Texas formally establishes your business and helps to protect personal assets so you can focus on building your business.