How to Operate a Texas LLC

By Salvatore Jackson

A limited liability company, or LLC, is a flexible form of business association that combines the limited liability protections of a corporation with the pass-through federal taxation of a partnership. Organizing as an LLC is popular with entrepreneurs due to these features. While forming a Texas LLC is a simple process, operating a Texas LLC as a small business requires registering with both state and federal government agencies.

A limited liability company, or LLC, is a flexible form of business association that combines the limited liability protections of a corporation with the pass-through federal taxation of a partnership. Organizing as an LLC is popular with entrepreneurs due to these features. While forming a Texas LLC is a simple process, operating a Texas LLC as a small business requires registering with both state and federal government agencies.

Step 1

File a certificate of formation with the Texas Secretary of State (see Resources). A certificate of formation is the document that legally creates a Texas LLC. You must select a name for your Texas LLC and obtain a registered agent, which is the party or business that will receive service of process if your Texas LLC is sued or subpoenaed. As of 2010, the filing fee for a certificate of formation is $300.

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Step 2

Create an operating agreement. An operating agreement is a contract that governs how the LLC is operated. Typically, an operating agreement sets forth the obligations of LLC owners, which are called members, and indicates the ownership share of each LLC member, their obligations to provide services and further investment to the LLC, and a procedure for adding and removing LLC members. Additionally, an LLC operating agreement usually provides voting procedures and sets forth the responsibilities of LLC employees. While the Texas Secretary of State does not require an operating agreement, most banks require an operating agreement before opening a bank account for an LLC.

Step 3

Obtain any needed business licenses. If your LLC will be making sales or providing services to the public, it will need to obtain a sales tax license from the Texas Comptroller. Additionally, depending on the type of business your Texas LLC will be engaged in, you may need to obtain various state and local licenses. The Texas State Government provides a list of all business licenses issued in Texas (see Resources).

Step 4

Obtain an Employer Identification Number, or EIN, from the IRS. An EIN is required before your business can lawfully hire employees. The IRS provides an online form for obtaining an EIN (see Resources).

Step 5

Register your Texas LLC with the Texas Attorney General for the purposes of paying state taxes (see Resources). Registering will enable you to pay an annual franchise tax, which is 0.575 percent for LLCs with less than $10 million in revenue.

Step 6

File your annual statement with the Texas Secretary of State. Every year, the Texas Secretary of State requires LLCs to confirm the information found in the LLCs' Certificate of Formation. After filing your Certificate of Formation, you will receive an account which can be used to file your annual statement online. As of 2010, the filing fee for an annual statement is $35.

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How to Incorporate an LLC in Texas

References

Resources

Related articles

Is an Operating Agreement For an LLC Public Record?

A limited liability company, or LLC, is a flexible form of business association popular among individuals looking to start a small business. Starting an LLC requires filing a document, called the articles of organization, with the state agency responsible for registering business associations. After filing the articles of organization, an LLC will typically execute an operating agreement, which is a contract that governs how the LLC is run. An operating agreement is not a public record in any state.

New Jersey LLC Requirements

New Jersey LLC requirements are primarily set forth in the New Jersey Limited Liability Company Act, which specifies how an LLC is formed, operated and dissolved. As with all other business entities, such as corporations and partnerships, New Jersey law includes certain licensing, taxation and insurance requirements, which also apply to LLCs. The Division of Revenue provides a comprehensive package of information and forms to facilitate compliance with these requirements.

How to Create an LLC in Texas

Creating a Texas LLC, or limited liability company, is accomplished by meeting the requirements of the Texas Business Organizations Code. The basic requirement is filing a certificate of formation with the Texas secretary of state along with the required fees. The secretary of state’s office provides a certificate of formation that meets the minimum requirements. The instructions provided with the certificate make it easy to create your LLC; however, you should consult with an attorney to determine whether your LLC should include more organizational structure, such as an operating agreement.

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