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Forming a limited liability company in Texas  

On Behalf of | Apr 14, 2022 | Business Entities

Businesses come in different formats, and each format has its advantages and disadvantages. One of the most popular formats for small businesses is the limited liability company, or LLC. When forming an LLC in Texas, whether from the ground floor or formalizing a business that you already formed previously, you will need to follow specific steps.

In Texas, forming a business is relatively uncomplicated and inexpensive. Still, it isn’t always easy to get all the paperwork sorted out correctly. An attorney with experience in business formation can advise you on the process.

The process

If you plan to form an LLC, you will need a Certificate of Formation, which is issued by the Secretary of State. Before that, you will need to do the following:

  • You will need to choose a name for your business. Some form of “LLC” or the definition of the abbreviation must be a part of the name. That serves as the entity designation.
  • The name of your business must be unique. It must not be like any other name of any other business in the state. If you are unsure about whether the name is unique, searching the Texas Comptroller of Public Account’s Taxable Entity Search will probably turn up results. At least, it will get you closer to finding whether any other business uses the same name or a similar one.
  • You must avoid certain words in your business’ name so that people are not misled into thinking that your business handles something other than what it actually handles.
  • There are other areas of the form for the Certificate of Formation that must be completed. They are straightforward.

Once your business is on the way to formation, you have some control over timing. You can choose the formation to be right away, have a 90-day delay, or have its formation be contingent on certain things happening (such as a merger). You can file by mail, online, or by fax.

A lawyer’s advice

If you are forming a business, the sound advice of a Texas lawyer may be invaluable. The chances are that you may not understand everything that you need to do. The lawyer can help you to navigate the process and to help everything go smoothly for a successful end.