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The Limited Liability Company (LLC) is a smart entity choice for many start-up businesses. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Texas without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.
Forming an LLC in Texas can be both affordable and is simple enough for most people to start on their own. That said, it’s not a bad idea to have a legal professional like While the filing is pretty straightforward, it’s nice to have some support if you have questions, alerts when the annual report is due, forms like operating agreements, banking resolutions and more. There are companies like IncFile or Swyft Filings and others that do all of this for only $49.
To form a Limited Liability Company in Texas, file the Certificate of Formation with the Texas Secretary of State. The LLC filing fee is $300.
Approval for the LLC is typically around one week.
HOW TO FILE THE CERTIFICATE OF FORMATION AND FORM A TEXAS LLC
Article 1: Name the LLC
Enter the name you want for the LLC. The name of the LLC also has to differ from other entity names registered with the Secretary of State. Be sure to check on the available LLC names in Texas to be sure the one you want is available.
The name of the LLC must also include a designator at the end of the business name. A designator describes what type of business entity it is. Available designators include:
- Limited Liability Company
- Limited Company
A comma may be used after the business name and before the designator. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
Article 2: Registered Agent
To have an LLC in Texas, a Registered Agent must be identified. The Registered Agent can either be a Registered Agent service or provider like an accountant or attorney (Select “Organization”) or an resident of Texas (Select “Individual). The Registered Agent must have a physical address in the state (PO Boxes are not allowed) and will act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.
Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.
Article 3 – Governing Authority
This article is asking if the LLC is Member-Managed or Manager-Managed.
- Manager-Managed LLCs are hired by the members to run the LLC, similar to a CEO of a corporation. This is generally used when there are passive members in the LLC and the members do not actively manage or operate in the affairs of the business.
- Member-Managed LLCs have an active involvement in the management and have authority to act on behalf of the LLC.
Most LLCs are member-managed.
Enter the name for each of the governing persons.
Article 4: Purpose
This article allow to provide some basic information about what the business does. Sticking with the standard language “The purpose for which the company is formed is for the transaction of any and all lawful purposes for which a limited liability company may be organized under the Texas Business Organizations Code.” keeps the business purpose open-ended and allows an LLC to operate in any type of business as long as it is legal.
This is an optional section and not used by most LLCs. Here you would include additional rules for the operation of the LLC.
An LLC Organizer is someone involved with the formation of the Certificate of Formation. The Organizer may or may not become a member, such as a mentor, attorney or accountant, but any of the initial members can be listed as an organizer.
If you want the LLC to start immediately, choose
- A. This document becomes effective when the document is filed by the secretary of state” which many people choose.
- B. This document becomes effective at a later date, which is not more than ninety (90) days from the date of signing”
- C. This document takes effect upon the occurrence of the future event or fact, other than the passage of time.
The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year and the business isn’t going to have any activity until the start of the year. By delaying until the following year they will reduce the number of end-of-year filings.
Have an organizer accept the terms and conditions and sign.
In approximately one week, the LLC will be approved.
That concludes the basics of forming an LLC in Texas. Remember, even though you can do it yourself, there is more to an LLC than just the filing. If you have questions, work with an attorney or a specialized entity formation company such as IncFile or Swyft Filings to make sure everything is done correctly.
While not required, an Operating Agreement is recommended in many cases. An Operating Agreement is a legal document outlining the roles and responsibilities for the members of the LLC. Read more about when an LLC needs an Operating Agreement.
After filing the LLC, be sure to register for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS). The EIN is basically a social security number for a business and will be needed before opening a business bank account. There is no cost to apply and it takes about 5 minutes to get. See how to apply for an EIN.
Last, before starting a business in Texas, you may still need to apply for business licenses, sales tax permits, self-employment taxes and more in Texas. See the Guide to Starting a Business in Texas for more information.