How To Set Up a Limited Liability Company in Texas

The Steps for Protecting Your New Venture

If you’re planning to start a new business and you’ve decided that a limited liability company is the best legal form, you want to make certain you take right steps to set one up under Texas law. Here’s a checklist to help you through the process.

• Step #1 — Choose a Name
  You must choose a name that won’t be unreasonably confused with other business names already on file in the state of Texas. Check with the Secretary of State’s office to see if your preferred name is already taken. You can reserve a name for up to four months. Your name must include one of the following to indicate that it’s an LLC: the words “limited liability company” or “limited company” or the abbreviations “L.L.C., LLC, L.C. or LC.
• Step #2 — Appoint a Registered Agent
  You must identify a person who will accept legal service of process in Texas on behalf of the LLC. The person must be a Texas resident with a physical address in Texas, or must be a business authorized to do business in Texas.
• Step #3 — File a Certificate of Formation
  You must file the appropriate documentation with the Secretary of State’s office. In Texas, this is Form 205, the “Certificate of Formation of a Limited Liability Company. We’ll look more closely at the requirements for Form 205 in another blog. You may file online or by mail, and will have to pay a filing fee.
• Step #4 — Execute an Operating Agreement
  Though this is not mandatory in Texas, it’s a good idea. The operating agreement will set forth the rights, duties and responsibilities of all members of the LLC, and will identify how the enterprise is managed.

• Step #5 — Register with All Appropriate Revenue Authorities
  If you have more than one person in the LLC, or if you intend to have employees, you must obtain an Employer Identification Number (EIN) from the Internal Revenue Service. You may also need a state-wide license for your business.
• Step #6 — File Your Annual Franchise Tax Report
  Texas does not require any other annual filings, but all LLCs must file this report.
  Note that if you set up your LLC in any state other than Texas, you must file an Application for Registration of Foreign Limited Liability Company (Form 304) with the Texas Secretary of State’s office.

Contact Us

At MCIS Law, PLLC, in Stafford, we aggressively advocate for businesses and individuals in southeast Texas. For a confidential consultation with an experienced and knowledgeable lawyer, email us or call our office at (346) 297-0121. We accept all major credit cards.