Overview
Getting an LLC in Texas involves a straightforward process. Below, we’ll guide you through the essential steps and provide factual answers to common questions.
How To Get An LLC In Texas: Step-By-Step
- Choose a Name for Your LLC:
- Choose a unique and available name for your LLC.
- Perform a Texas LLC name search through the Texas Secretary of State website.
- Reserve your chosen name if needed.
- Appoint a Registered Agent:
- Appoint a registered agent with a physical address in Texas.
- File Certificate of Formation:
- Complete the Texas LLC Certificate of Formation form.
- File online through the Texas Secretary of State website or submit a paper application.
- Operating Agreement:
- Draft an operating agreement outlining the structure and operation of your LLC. Although not required by the state, it is highly recommended.
- Employer Identification Number (EIN):
- Obtain an EIN from the IRS for tax purposes.
- File the Beneficial Ownership Information Report:
- Beginning in 2024, Texas LLCs must submit a Beneficial Ownership Information (BOI) Report.
1. Choose A Name For Your LLC
Check if the name you desire for your Texas LLC is available in the state. This is important because no two businesses in Texas can share the same name.
To do this, use the Secretary of State’s Business Entity Search tool to compare your business name with existing ones in Texas.
Make sure your LLC name is unique by following Texas’s naming rules to increase the chances of your LLC name being approved.
If you need, you can reserve the name for your LLC for up to 120 days. The cost is $40.
2. Appoint A Registered Agent
In Texas, you need to choose a registered agent for your LLC. This is the person or company allowed to get legal papers and important notices on behalf of your LLC.
Your registered agent can be a person, like yourself or one of your employees, or a company that offers this service.
The registered agent has to meet some requirements:
- If it is a company, it must offer registered agent services.
- The agent must have an address in Texas.
- The agent must be there in person and ready to get documents during regular business hours.
3. File Texas LLC Certificate Of Formation
To officially establish your Texas LLC, you need to file the Texas LLC Certificate of Formation.
This document provides essential details about your LLC and serves as the official registration.
To prepare the certificate, gather the following information: your LLC name, the name and address of the registered agent, the purpose of your LLC business, and provide the effective date if different from the filing date.
The form is a straightforward online submission or can be sent by mail.
The Texas LLC Certificate of Formation filing fee is $300. For expedited processing, add $25.
Once filed, the Texas Secretary of State will review the document, and upon approval, your LLC attains legal business entity status.
You can undertake this process independently using our step-by-step guide or opt for the convenience of hiring a company for assistance.
>> Get the Northwest Registered Agent $39 Deal <<4. Create An Operating Agreement
An operating agreement is a document that shows how your LLC will do business.
While Texas doesn’t make it a must, having one is crucial. It helps in different ways, like resolving money disputes or potential legal issues. Without it, the courts decide based on state laws, not necessarily what’s best for the LLC.
The agreement can include things like the LLC’s name, address, how long it will last, the registered agent’s details, info from the Certificate of Formation, the business’s purpose, member contributions, how profits and losses are shared, rules for new and leaving members, how the LLC is managed, and clauses about protection and responsibility.
5. Obtain Employer Identification Number (EIN)
The Internal Revenue Service (IRS) gives your LLC a nine-digit number called an Employer Identification Number (EIN) to identify it for taxes. You can get your EIN by mail or online through the IRS.
This number helps you:
- File and handle taxes at both the state and federal levels.
- Open a bank account for your business.
- Apply for permits and licenses.
- Hire employees.
Obtaining an EIN is FREE.
6. File The Beneficial Ownership Information Report
Starting in 2024, many Texas LLCs must now file an extra document at the federal level, known as the Beneficial Ownership Information (BOI) Report, to the Financial Crimes Enforcement Network (FinCEN).
This report mandates disclosing information about your company applicant and all beneficial owners to FinCEN. You can submit it online using the Beneficial Ownership Information E-filing System or opt for a professional service to handle it for you.
Review: What Is Needed To Form An LLC In Texas?
To form an LLC in Texas, you need:
- A unique LLC name.
- Registered Agent information.
- Certificate of Formation.
- Operating Agreement.
- Employer Identification Number (EIN).
What Forms Do You Need To Get An LLC In Texas?
- Request to Reserve LLC Name
- Certificate of Formation (online)
- Certificate of Formation (PDF)
- EIN Application Form
- BOI Form
How Much Does It Cost To Start An LLC In Texas?
The cost to start an LLC in Texas involves several steps, each with its own associated fees:
- Certificate of Formation Filing Fee: $300
- Expedited filing fee: $25
- Name Reservation Fee (if needed): $40
- File LLC Annual Franchise Tax Report: Varies
What Is The Texas LLC Annual Franchise Tax Report?
In Texas, all LLCs must file an Annual Franchise Tax Report with the Texas Comptroller of Public Accounts every year.
The tax rate depends on your LLC’s total revenue and business type.
Most businesses won’t owe taxes if their revenue is $1,230,000 or less. If it’s more, rates range from 0.331% to 0.75%.
The report is due by May 15 annually and can be filed online or by mail.
How Long Does It Take For An LLC To Get Approved In Texas?
When you send your LLC application by mail, it will be approved in 30-40 business days, plus the time it takes for the mail (6-8 weeks in total).
However, if you file online, your LLC can be approved in 12-15 business days. Expedited filing can cut the filing time to 5 business days.
What Are The Benefits Of Getting An LLC In Texas?
- Limited liability protection for members
- Pass-through taxation
- Flexible management structure
- Credibility for business transactions
Is Texas A Good State To Get An LLC?
Whether Texas is the right state for your LLC depends on where you live and do business. If you live or operate in Texas, it makes sense to start your LLC there.
Getting An LLC In Texas: Next Steps
Once your LLC is registered, you can:
- Get the permits and licenses you need for your business, like health or zoning permits.
- Register your business with the state’s tax agency.
- Open a business bank account.
- Apply for a business credit card.
- Buy insurance for your business.
- Safeguard your name and logo with a trademark.
To maintain your LLC in Texas, you must:
- Update any changes to the registered agent or business address promptly.
- File an Annual Franchise Tax Report.
- Pay Taxes (owners file their individual tax returns).
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Conclusion
Forming an LLC in Texas involves a few key steps, from name reservation to obtaining an EIN.
Carefully following the process ensures a smooth establishment of your LLC.
For more detailed information and to access the necessary forms, visit the Texas Secretary of State website.
