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Steps to Establish an LLC in Texas

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For small business owners, the Limited Liability Company (LLC) has become the single most popular business entity structure in this nation. Although the requirements are slightly different in each state, they are fairly straight forward for simple organizations. However, if your company’s organizational structure is complex, then this simple process may not be so easy for you. 

Steps to form an LLC include the following:

  • Contact your state’s Secretary of State office to obtain a certificate of formation form. Prior to completing this form, you should learn what specific rules your state has regarding LLCs to ensure it is the best choice for your business.
  • Chose a business name for the LLC and check its availability. In Texas, your business name must not be the same as another company’s name that is already on file with the Texas Secretary of State. To determine this, the Texas Secretary of State can advise on name availability. Additionally, Texas law requires an LLC business to have Limited Liability Company or LLC in the name.
  • Complete the certificate of formation form, also called the Articles of Organization form. Submit the completed form to the Texas Secretary of State along with the appropriate filing fee. 
  • Create an LLC Operating Agreement. Although this agreement is not required by the state, it is highly advisable to have a written agreement of the terms, such as how the company will be managed, what capital contributions are required from each member, how profits from the business will be distributed, and much more. This agreement explains the rights and responsibilities of each LLC member. 

Although drafting an Operating Agreement is mentioned last in the steps above, it actually should be worked out prior to filing the LLC Article of Organization. An Operating Agreement is a critical step in the process of becoming an LLC because it can help protect your business from potential legal problems. It is wise to consult with an attorney regarding creating an LLC Operating Agreement. 

For business entity services in Austin, call the Posey Law Firm to speak with a knowledgeable Texas business lawyer. To schedule your free case consultation, call our office toll-free at 888.269.1962 or locally at 512-646-0828 today.

Category: Business Entity Choice

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