Form a Texas LLC
Let LegalZoom walk you through the process of becoming a limited liability company today. With our help, creating an LLC is clear, simple, and can be done online in three easy steps. Protect your personal assets, organize your business however you want, and get the fringe benefits of a legally established business entity.
When you form your Texas LLC, with LegalZoom, we prepare and file your articles of organization with the Corporations Division of the Texas Secretary of State. We also conduct a name search for your Texas LLC to assist you in the preparation of your operating agreement and other customized services corresponding to your needs. Once your articles of organization have been successfully filed, your Texas LLC begins its existence as a legal business entity.
LegalZoom LLC Overview
Registering a LLC Name:Choosing a business name is one of the first steps in the process of forming your Texas Limited Liability Company. The name that you choose:
Must be distinguishable from (cannot be the same as or deceptively similar to) any other Texas Limited Liability Company names or other business names used, registered or reserved with the Secretary of State
Must contain, as the last words of the name, "limited liability company" or "LLC" or "L.L.C." or "limited company" or "LC" or "L.C." The word "limited" may be abbreviated as "Ltd.," and the word company may be abbreviated as "co."
Must not imply that it was formed for a business purpose different than stated in the articles or that is unauthorized by law
However, a Texas Limited Liability Company can apply to choose a name that is not distinguishable from the Secretary of State records if the other entity consents to the use in writing.
Reserving a LLC Name: A LLC may reserve a name by filing an application with the Secretary of State. A LLC name be reserved by a person intending to organize the LLC or a LLC already registered in the state.
A name can be reserved for a 120 day period and can be renewed for additional periods of 120 days. A person can transfer a name reservation by delivering to the Secretary of State a transfer notice signed by the transferor and specifying the name and address of the transferee.
LegalZoom allows you to choose up to 3 names, in order of preference. We will conduct a name check for your Texas Limited Liability Company before filing to see which names are available.
How to Register: Once you have chosen an available name, LegalZoom can help you register your name with the state.
Articles of Organization: During Texas LLC formation, articles of organization must be delivered to and filed with the Secretary of State. State law requires that certain information be included in your articles of organization during Texas LLC formation. This information must include:
The company name
A statement as to the type of entity formed
A statement as to the purpose for which the entity is formed
The duration of the LLC if this period will not be perpetual (for a set amount of time)
The street address of the registered office and the name and street address of the registered agent (If you do not have a registered agent, LegalZoom can arrange to be your legal agent ?see below for additional details)
The name and address of each organizer
The signature of each organizer
A statement as to whether the company will be managed by a manager or managers and, if applicable, the name and address of each initial manager or in the alternative the name and address of each initial member
The signature of a manager, member, organizer, fiduciary or trustee and the capacity of the signer.
Any other relevant information
Filing: Your LLC is considered organized once an original and a duplicate copy of the articles of organization are delivered to the Secretary of State with the proper filing fee and the Secretary of State determines that they are in compliance with state requirements. The Secretary of State endorses both copies but retains the signed original and returns the duplicate copy to the LLC or its representative. The document is effective as of the day and time it is filed or if a date and time is indicated the document is effective as of delayed effective date and time.
Additionally, Texas LLC formation requires inclusion and/or consideration of the following:
Duration: Perpetual unless otherwise specified in the articles of organization or other governing documents.
Operating Agreement: Although not required, LLC members may adopt an operating agreement to regulate the affairs of the company, which may also be amended and repealed as allowed by the agreement or applicable law. The articles of organization may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. The operating agreement may not conflict with the articles of organization or any other provisions of law.
Membership: A limited liability company must have one or more members. Requirements:
Minimum Number of Members: One or more
Eligibility Requirements: A member must be an individual
Procedure for Membership: An individual may become a member by, but is not required to:
o Make a contribution to the company
o Pay cash or transfer property to the LLC
o Assume an obligation to make a contribution, pay cash or transfer property
Resignation of Membership: A member can resign from a LLC; however, certain prohibitions exist surrounding the ability of a member to resign from the company.
A member may not resign from a LLC except in accordance with the operating agreement or articles of organization
A member may not resign from a LLC before a minimum term set for membership set out in the operating agreement or articles of organization
A LLC may pursue certain remedies for any damages suffered by the LLC as a result of the resignation
Contribution: The contributions of a member to the limited liability company may be in cash, property, promissory notes, services previously rendered, or other obligation to contribute cash, property, or contracts for services to be rendered.
Registered Agent In Texas
LegalZoom can also provide your business with registered agent in Texas. Every Texas LLC must always have a registered agent and registered office in Texas ?the person and office designated to receive official state correspondence and notice if the company is "served" with a lawsuit.
Eligibility Requirements: a registered agent in Texas may be (1) an individual resident of Texas, (2) a Texas corporation or Vermont LLC or (3) an out-of-state corporation or LLC with an office in Texas authorized to do business there.
Registered Office: The LLC must maintain a business office at the same address as the entity's registered office. The LLC must provide a street address, not a post-office mailbox or telephone answering service. The registered office may be the place of business of the LLC.
Texas Secretary of State
Once a Texas LLC has been created, the Texas Secretary of State will require certain recurring obligations and duties. The most important of these duties are explained below. For further information, contact the Texas Secretary of State office.
Records: Each limited liability company must keep the following records open to inspection by the Texas Secretary of State at its office:
Books and records of accounts
A current list of the full name and mailing address of each member
A copy of the federal, state, and local income tax returns, if any, for the last six years
A copy of the filed certificate of formation and any amendments or restatements thereto
A copy of the company agreement and any amendments thereto
A copy of any written powers of attorney under which the operating agreement, articles of organization or amendments have been executed
A copy of any document establishing a class or group of members under the company agreement
A written statement of the amount of cash contribution and a statement as to the agreed value of contributions made or to be made by each member
A written statement of the dates any additional contributions are to be made by a member
A written statement of any event the occurrence of which requires a member to make additional contributions
A written statement of any event the occurrence of which requires the winding up of the company
A written statement of the date each member became a member of the company
Each LLC may keep:
Minutes of the proceedings and committees of the owners or members
Annual report: Each limited liability company shall file an annual report with the Texas Secretary of State that lists the following information:
The company name and state where organized
The address of the registered office and the name of the registered agent
The address of the principal office
The names and business addresses of the managers
Acts Triggering Dissolution: A limited liability company is dissolved upon the happening of any one of the following events:
Events specified in the articles of organization or operating agreement
Consent by the specific number or percentage of members indicated in the operating agreement
Event that makes it illegal for the LLC to continue
When a member leaves the LLC, unless either of the following applies:
o Within 90 days, the remaining members agree to continue the business
o The company continues under a right specified in the operating agreement
A LLC can offer certain tax advantages over a corporation, including the availability of more deductions. Additionally, a LLC is not required to be a separate tax entity like a corporation; instead it can be a "pass-through entity" so that the LLC owners report business losses or profits on their personal tax returns, like a partnership.
Federal Income Tax: Unless you elect to tax the LLC as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes and does not have to file a tax return. Unless you elect to tax the limited liability company as a corporation, the IRS treats multi-owned LLCs as partnerships for tax purposes. This means that LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns, not the LLC itself. If you desire, by filing IRS Form 8832, you may elect corporate taxation if you regularly need to keep a substantial amount of profits in your LLC.
State Income Tax: The LLC tax rate for Texas is variable, based on Texas taxable net income.
Federal Tax Identification Number: Your LLC may need to obtain a federal tax identification number (also known as an employment identification number/ EIN), which is similar to an individual's social security number. Generally, you will not need a separate EIN number for your LLC as long as you are the sole owner and the LLC has no employees. However, if you are not the sole owner of the LLC or if the LLC has employees, your LLC will need a separate EIN number to open a bank account and for certain tax filing requirements LegalZoom can prepare your Federal Tax ID Application if you have not already done so.
Filings must be made with the Texas Secretary of State along with the appropriate filing fee. When appropriate a check must accompany the document payable to the State of Texas, covering all charges for the Secretary of State.