Texans have a reputation for being independent, and starting a business is one of the boldest ways to live that out. But independence doesn’t mean going unprotected.
If you’ve been wondering how to start an LLC in Texas, you’re likely looking to shield your personal assets while keeping your business flexible. Starting a successful business can seem complicated. But with guidance, you can form an LLC that gives you protection and freedom—the perfect combination for doing business in the Lone Star State.
What Is an LLC?
An LLC, or limited liability company, is a business structure that blends features of a corporation and a partnership. It protects your personal assets from business debts and lawsuits while giving you flexibility in how you run and tax your business. Many entrepreneurs choose to be an LLC in Texas because it’s a straightforward way to safeguard their future while keeping operations simple.
What Do You Need to Start an LLC?
Once you’ve decided an LLC is the best structure for your company, you’ll surely ask, What do you need to start an LLC? Here’s a breakdown:
Step 1: Choose a Name
Your LLC’s name must be unique, include the required designation, and not conflict with other registered entities. Check name availability through the Texas Secretary of State’s online database.
Step 2: Appoint a Registered Agent
The registered agent must have a physical address in Texas and be available during business hours to accept legal papers. This ensures your business never misses critical legal notices.
Step 3: File the Certificate of Formation
File a Certificate of Formation (Form 205) with the Texas Secretary of State online or by mail. It requires details like your LLC’s name, registered agent information, management structure, and organizer’s signature.
Step 4: Create an Operating Agreement
Even though Texas does not require an operating agreement, it is wise to have one. Such an agreement sets out the members’ rights and duties, how to divide profits, and what happens if a member leaves or the business dissolves. It proves your LLC is a separate entity and prevents disputes.
Step 5: Get an Employer Identification Number
If your LLC has more than one member or employee, you’ll need an Employer Identification Number (EIN) from the IRS. This number is used for tax purposes and is free to obtain through the IRS website.
Step 6: Stay Compliant
After formation, you must file an annual franchise tax report with the Texas Comptroller. Missing deadlines can result in penalties or even dissolution of your LLC. Depending on your business, you may also need to renew state or local licenses. Staying on top of these ongoing requirements keeps your LLC in good standing and prevents costly penalties.
These steps form the foundation of your business. Ensuring you correctly execute them will save you future stress.
How Much to Start an LLC in Texas?
Cost is one of the first questions business owners ask, and unfortunately, there is no one set cost for every business. However, the state filing fee for the Certificate of Formation is $300, plus a small convenience fee for online filing. So if you’re wondering how much it costs to start an LLC in Texas, the minimum is a little more than $300.
You may have added expenses for drafting contracts, creating an operating agreement, or seeking legal advice, which can be seen as investments that protect your business and save you money in the long run.
Why Hire a Lawyer Instead of Doing It Yourself?
While it’s possible to form an LLC on your own, the process can get complicated. Common mistakes include filing incomplete paperwork, overlooking tax considerations, or failing to draft an operating agreement. A lawyer can:
- Set you up for long-term success by identifying risks and goals,
- Correct errors before they cause serious problems,
- Protect your interests with customized contracts and agreements, and
- Keep you compliant with state reporting requirements.
A lawyer can ensure your LLC is on a solid legal foundation and remains compliant.
Why Choose Massingill?
If you have a brilliant business idea, have been wondering how to start an LLC in Texas, and are ready to take the next step, we can help. The process is straightforward when you have the right support, and our team will guide you from start to finish.
At Massingill, we help business owners create strong companies designed to grow. Our attorneys bring together decades of experience across business law, litigation, corporate governance, estate planning, and international transactions. Our team includes former legislators, combat veterans, general counsel, and community leaders. We bring legal knowledge and real-world business insight to every client.
From choosing the best business structure to drafting agreements and staying compliant, the Massingill team will guide you. We anticipate problems before they happen, fill gaps in your liability, and craft customized contracts and strategies for your LLC.
Contact us today to schedule a consultation and take the first step toward building your dream business.
Joshua Massingill
Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.
Rate this Post
Loading...