If you have an idea for a business and want to get all the protection and benefits needed to make it successful, you should consider registering it as an LLC. Your business cannot operate in the state of Texas without being officially recognized. This process is different in each state, but it is not difficult. If you want to set up an LLC in Texas, follow these steps.
Create A Name For Your LLC
The state of Texas has some specific requirements when it comes to naming your business. Meeting these requirements will ensure your paperwork is processed without delay so you can start doing business faster. The requirements include:
- Including the words “Limited Liability Company, LLC, or LLC” in the name.
- Must be different from any other business name in the state
- It cannot contain words related to a government agency
- Must provide proof of license if the name includes professional titles
When naming your LLC, you can search the Secretary of State’s website to ensure you are not trying to use a name that is already taken and to learn more about how other LLCs are named.
Choose A Registered Agent
A registered agent is a person who will receive mail and official notices on behalf of your LLC. A Texas registered agent can be you or anyone who works for your company. The state does require the registered agent to have an address in Texas and keep regular business hours so they can receive mail and notices on time. While the state of Texas only has minor requirements for choosing a registered agent, you may want to have some of your own. You want to choose someone you can trust and who has experience acting as a registered agent. You also want to make sure the agent you choose has a legitimate office and will be willing to put in the time and work the position requires.
File A Certificate of Formation
The certificate of formation is a document that includes basic information about your business. It must be filed and approved before your business will become an official entity. The document should include the following information:
- The LLC name
- The address of the registered agent
- The reason you created the LLC
- How long you plan for the LLC to exist
- Management information
- Contact information for the managers
- The LLCs organizer information
- The LLC former’s signature
Receive Your Certificate From The State
Once the state reviews your application and approves it, you will receive a certificate that confirms your LLC exists. You will need to use this to apply for an Employer Identification Number (EIN), business licenses, and business bank account. It can take several weeks to receive this, and while your business is considered official as soon as your application is approved, you won’t be able to provide proof of this without the certificate. It’s a good idea to make copies of the certificate and keep the original with other important information pertaining to your business.
Make An Operating Agreement
This is a document that explains how your LLC will do business, similar to a business plan. This is not a requirement in the state of Texas, but it is an essential part of creating an LLC. This is something you can reference in the event that there are disagreements among managers or any type of litigation. Some things to include in your operating agreement include,
- The LLC official name and address
- Manager contact information
- Registered agent contact information
- Ownership information
- Distribution of profits
- How business decisions are made
- Roles within the company
- Process for closing the business
- Process for letting owners exit the LLC
Get Your Employer Identification Number
You will need an Employer Identification Number from the IRS. You can apply for this number online or through the mail. This is what the IRS will use to keep track of your tax information. You will also need it to hire employees for your business, open a bank account for the business, and manage your business taxes. Your EIN number will come in the mail, and you will need to keep it filed with other important business documents.
Set Up Accounts
Once you have your Employer Identification Number, you can start to open up some accounts for your business. You will need to open up a bank account and buy insurance to protect your business. You may also want to buy a trademark to protect your business’s name and logo. You can also obtain any permits or licenses you need to do business in your industry or the city or country where you live.
If you are planning to start a business in Texas, there is a process to follow. You will need to start your LLC to make your business official and to be able to conduct business. The above steps can help guide you through the process.