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What steps do I need to take to form a Limited Liability Company (LLC) in Texas, and what are my ongoing obligations as an LLC member?

Picture of Chris Battis By   ·  1 minute read

To form a limited liability company (LLC) in Texas, you must first choose a unique name that is not already registered with the state. You can check the availability of your desired name by searching the Texas Secretary of State's business name database. Once you have a name, you must file a Certificate of Formation with the Texas Secretary of State's office and pay the required fee. This certificate should include the following information:

  • The name and address of the LLC
  • The name and address of the LLC's registered agent (a person or entity who can receive legal papers on behalf of the LLC)
  • The purpose of the LLC
  • The names and addresses of the LLC's members or managers (if the LLC is managed by others)

Once your LLC is formed, there are ongoing obligations that you must fulfill as a member. These include:

  1. Maintaining accurate records: You must keep detailed records of the LLC's financial transactions, including income, expenses, and distributions.
  2. Filing annual reports: Every LLC in Texas must file an annual report with the Secretary of State's office. The report must include updated information about the LLC's registered agent, members or managers, and contact information. There is a fee for filing the report.
  3. Paying taxes: As an LLC member, you may be required to pay state and federal taxes on your share of the company's profits. You may also need to file additional tax forms, such as a Texas Franchise Tax Report, depending on the size and structure of your LLC.
  4. Following state laws and regulations: There are several laws and regulations that govern the operation of LLCs in Texas. These include the Texas Business Organizations Code, the Texas Administrative Code, and local ordinances. It is important to stay up-to-date on these laws and comply with them to avoid legal trouble.

There are also potential limitations and exceptions to the advice given, depending on the specific circumstances of your LLC. For example, if your LLC has multiple members, you may need to draft an operating agreement that outlines how the company will be managed and how profits will be distributed. Additionally, if you plan to hire employees or offer certain services, you may need to obtain licenses or permits from the state.

Overall, forming and maintaining an LLC in Texas can be a complex process. It is advisable to consult with a licensed attorney to ensure that you are meeting all legal requirements and protecting your personal assets from liability.