Forming an LLC can be a wise decision for Texas entrepreneurs. However, the process of setting one up can be intimidating to some. Knowing what is needed in advance and being prepared with all the necessary information can make the process easier and smoother. Here are some things that will be required to form an LLC:
- A business name: The name must be unique to one’s business (not being used by another business in the state) and adhere to all state laws on business naming. Looking into these ahead of time and having a name picked out is a good idea.
- A registered agent: This is a named individual who receives documentation addressed to the LLC. The registered agent can be anyone, including the primary business owner, so long as they have an address within the state and are available during working hours. There are also companies that provide registered agent services for a fee.
- Certificate of formation/article of formation form: Each state has a designated form that must be filled out to form the LLC. Forms can be reviewed online before filing, but generally, they ask for information such as the business name, address, management details, and duration.
- Operating agreement: While these are not legally required in all states, they are an important legal step to determine key issues like profit distribution, contributions of capital, and partnerships. Some solo-owner LLCs may forgo this step, but those with multiple parties can benefit from this document in particular.
In addition to the above, there could be added steps depending on the business types. These include getting business licenses, permits, and Employer Identification Number (EIN). The benefits of an LLC can range from tax benefits to liability shielding. Individuals considering the pros and cons of an LLC should speak with a Texas attorney.