How to Start Your LLC in Texas
Legal Bueno helps with everything you need to start your business. We take care of all the paperwork so you don't have to worry about it. Want to learn more about the process we handle? Keep reading!
Quick Summary:
- Filing Fee: $300
- Turnaround time: 13-15 business days
How do I start an LLC in Texas?
Thinking about starting an LLC? The process is pretty similar across the states. You'll start by picking a unique name for your business (you'll need to check to make sure it hasn't been taken!) and then filing some paperwork—usually called Articles of Organization or a Certificate of Formation—with your state's agency.
If you want to check the name availability for Texas, visit https://mycpa.cpa.state.tx.us/coa/.
After that's taken care of, you'll want to draft a governing doc for your business called an operating agreement & find any licenses you might need. Just keep in mind that each state has its own little quirks, so it's always a good idea to double-check specific requirements for your area.
What are the costs & processing times of starting a business in Texas?
Here's the rundown for Texas:
- The filing fee is: $300
- There are ongoing fees of $0 for most LLCs (however a No Tax Due Report and Public Information Report must be filed every year)
- It usually takes 13-15 business days if you're filing online or 4-8 weeks (plus mail time) if by mail.
Why Texas is a great state for your LLC
Starting a company in Texas offers numerous advantages that make it an attractive option for entrepreneurs and business owners. Here are some key benefits:
- No State Income Tax: Texas does not impose a state income tax, allowing business owners to retain more of their earnings, which can be reinvested into the company or used for personal needs.
- Favorable Tax Structure: With a high revenue threshold for franchise tax liability, many small and medium-sized businesses can operate without facing significant tax burdens.
- Limited Personal Liability: Forming a Texas Limited Liability Company (LLC) protects personal assets from business debts and liabilities, creating a safety net for entrepreneurs.
- Simplicity and Flexibility: Operating as an LLC involves straightforward filing, management, compliance, and administration processes, making it easier for business owners to focus on growth.
- Supportive Incentive Programs: Programs like the Texas Enterprise Zone Program (EZP) offer sales and use tax refunds to businesses that invest in communities and create jobs, particularly benefiting those who employ economically disadvantaged individuals, veterans, or residents of enterprise zones.
- Diverse Business Environment: Texas boasts a thriving economy, a large and diverse population, and a robust job market, all of which provide a rich backdrop for business opportunities.
- Variety of Business Structures: If an LLC doesn't suit your needs, Texas also supports various business structures such as corporations, allowing entrepreneurs to choose the best fit for their ventures.
Overall, Texas presents a conducive environment for starting and growing a business, with its supportive tax policies and legal frameworks designed to foster entrepreneurial success.
Legal Requirements
Remember! Legal Bueno will handle all of these requirements for you, but if you're interested, here are the legal requirements for Texas:
Articles of Organization
The certificate of formation must include:1. The name of the LLC;
- The type of filing entity being formed;
- The purpose or purposes for which the LLC is formed;
- The period of duration, if the LLC is not formed to exist perpetually;
- The street address of the initial registered office of the LLC and the name of the LLC's initial registered agent at the office;
- The initial mailing address of the filing entity;
- The name and address of each organizer for the LLC, unless the LLC is formed under a plan of conversion or merger;
- If the filing entity is formed under a plan of conversion or merger, a statement to that effect and, if formed under a plan of conversion, the name, address, date of formation, prior form of organization, and jurisdiction of formation of the converting entity; and
- Any other information required by the Business Organizations Code to be included in the certificate of formation for the filing entity.
Tex. Bus. Orgs. Code § 3.005
The certificate of formation of an LLC also must state:1. Whether the LLC initially has or does not have managers;
- If the LLC initially has managers, the name and address of each initial manager of the limited liability company; and
- If the LLC does not initially have managers, the name and address of each initial member of the limited liability company.
Tex. Bus. Orgs. Code § 3.010
The certificate of formation may contain other provisions consistent with law relating to the organization, ownership, governance, business, or affairs of the LLC.
Tex. Bus. Orgs. Code § 3.005
A provision that may be contained in the company agreement of an LLC may alternatively be included in the certificate of formation.
Tex. Bus. Orgs. Code § 101.051
Filing fee: $300
Tex. Bus. Orgs. Code § 4.152; Tex. Bus. Orgs. Code § 4.154
Filing Process
After you've prepared the initial formation documents, you need to file it! Here is what Texas laws require for filing:
If the secretary of state finds that a filing instrument conforms to the requirements and that all required fees have been paid, the secretary of state will:1. File the instrument by accepting it into the filing system adopted by the secretary of state and assigning the instrument a date of filing; and
- Deliver a written acknowledgment of filing to the entity or its representative.
Tex. Bus. Orgs. Code § 4.002
Additional Legal Considerations
Here are some additional relevant laws that might be useful when operating your business in Texas:
Company agreement
Tex. Bus. Orgs. Code § 101.052
Amendment of company agreement
Tex. Bus. Orgs. Code § 101.053
Waiver or modification in company agreement of certain statutory provisions prohibited– exceptions
Tex. Bus. Orgs. Code § 101.054
Series LLC Provisions
Tex. Bus. Orgs. Code § 101.601