Texas Limited Liability Company Rules

By Holly Cameron

A limited liability company (LLC) combines characteristics of both partnerships and traditional corporations. Those wishing to form an LLC in Texas must file a certificate of formation with the secretary of state under Chapter 101 of the Texas Business Organizations Code. The Texas Business Organizations Code came into force in 2006 to codify existing statutes relating to business organizations. Previous law governs LLCs formed prior to January 1, 2006.

A limited liability company (LLC) combines characteristics of both partnerships and traditional corporations. Those wishing to form an LLC in Texas must file a certificate of formation with the secretary of state under Chapter 101 of the Texas Business Organizations Code. The Texas Business Organizations Code came into force in 2006 to codify existing statutes relating to business organizations. Previous law governs LLCs formed prior to January 1, 2006.

Name

In Texas, the name of an LLC must be distinguishable from that of any other LLC or business entity registered with the secretary of state. There is an exception if the other business entity consents to the use of the name. In addition, the final words of the name must contain the term “limited liability company,” “LLC,” “L.L.C.,” “limited company,” “LC,” or “L.C.” The use of some words, including "lottery" and "Olympic," is prohibited except in special circumstances. It is possible to reserve a name for a LLC for 120 days by filing an application with the secretary of state.

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Articles of Organization

In order to form an LLC, articles of organization must be filed with the secretary of state. Certain information must be contained within the articles, according to the Texas Business Organizations Code. Articles must state the company’s name, the fact that it is a limited liability company, and the purpose for which the company has been formed. If the duration of the company is not specified, it will exist in perpetuity until dissolved in accordance with the law. The organizers, the registered agent and the registered office should also be identified in the Articles of Organization.

Membership

The shareholders of a limited liability company are known as members. In Texas, an LLC must have at least one member, and members must be individuals. Membership commences on the date the company is formed if the individual is named as an initial member in the company’s certificate of formation. Additional members can be admitted with the approval or consent of the existing members.

Registered Agent

The Business Organizations Code requires every LLC to maintain a registered agent and registered office in the state of Texas. The purpose of the agent is to accept service of any legal process, notice or demand on behalf of the company. Registered agents designated after January 1, 2010 must sign (in written or electronic form) to signify their consent to serve in that capacity. The registered office must be the business office address of the registered agent.

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References

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Michigan LLC Statutes

The Michigan Limited Liability Company Act of 1993 provides for the organization and regulation of limited liability companies (LLCs) in the state. The Act indicates that an LLC may be formed for any lawful purpose and that it must have a minimum of one member. The Michigan Corporation Division administers the rules relating to LLCs in Michigan.

Iowa Limited Liability Company Act

The Uniform Limited Liability Company Act is a set of laws that governs the filing standards and some business aspects of a limited liability company (LLC) in Iowa. The laws are found in Chapter 489 of the Iowa Code. Although the act allows the LLC's operating agreement to manage the company's internal affairs and practices, some requirements in the legislation specifically apply to all LLCs in the state.

How to Add Owners to a Texas LLC

Texas law regulates the formation and management of limited liability companies, or LLCs, registered in Texas. All LLCs that wish to conduct significant business operations in Texas must file a certificate of formation with the Texas Secretary of State, which becomes a public record. However, changes to the ownership structure of an LLC, including the addition of an owner, do not require an amendment to the certificate of formation. However, if the day-to-day management of your company is vested in its owners and the new owner will be exercising management authority, you must reflect this in the company’s public information report made to the Texas Comptroller of Public Accounts.

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