Starting a business can be a daunting yet rewarding experience. A limited liability company (LLC) is a business structure that protects your assets and your business’s debts and liabilities. If your business is in financial trouble, creditors can’t come after your personal assets.
Starting an LLC in Texas can be a great way to protect your assets and secure your business’s future. This article will explain the process of creating such a company, including the steps you need to take and the documents you need to submit.
1. Choose an Appropriate Name for Your LLC
To start, you must select a unique name for your LLC. In Texas, LLC names must contain the words ‘Limited Liability Company’ or an abbreviation of the same. The name must be available and distinguishable from any existing business names. You can check the availability of potential LLC names by searching the Texas Secretary of State Business Search. You must also register your LLC name with the Secretary of State for an extra fee.
2. Prepare and File the Certificate of Formation
After choosing an appropriate name, you must prepare and file the Certificate of Formation – the document that makes your LLC legitimate in the eyes of the state. When filing the Certificate of Formation, you must include the company name, address, and registered agent information. Your registered agent is the person or company that receives official documents and legal notices on behalf of the LLC.
You must also include the purpose of the LLC and any other optional provisions in the Certificate of Formation. This document must be signed by all members of the LLC and filed with the Texas Secretary of State.
3. Obtain Necessary Licenses and Permits
Once the Certificate of Formation is filed, you must obtain the necessary licenses and permits to operate your LLC. For example, selling goods or services may need a sales tax permit and an industry-specific license.
It’s important to remember that, depending on your business, you may need additional licenses or permits in Texas. For example, companies that sell alcohol must obtain a Texas Alcoholic Beverage Commission (TABC) permit. Other businesses may need a permit from the Texas Department of Agriculture or the Texas Department of Insurance.
4. Create an Operating Agreement
An operating agreement is an internal document that outlines each LLC member’s roles, responsibilities, and rights. It is not mandatory in Texas, but it is recommended as it provides an added layer of protection for all LLC members.
When opening an operating account for an LLC in Texas, you will have to provide the bank with details such as the LLC’s registered agent, date of formation, the signing authority on the account, and the tax ID number of the LLC.
5. Comply With Texas State Requirements
You’ll need to register the LLC with the Texas Comptroller of Public Accounts. This will require you to provide certain information, such as the LLC’s and the registered agent’s name, address, and the company’s purpose.
Afterward, you’ll need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) to open a bank account and file taxes. Finally, you’ll need to obtain a Certificate of Assumed Name from the Texas Secretary of State. This certificate allows the LLC to do business under a different name than the name registered with the Texas Comptroller.
By following these steps, you can successfully start an LLC in Texas. While the process may seem complicated, it is relatively straightforward and can help ensure the longevity and success of your business. Make sure you have the necessary paperwork to register with the state and have filed the appropriate paperwork with the Secretary of State. With dedication and hard work, you’ll be able to grow your LLC into a successful business.
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