For those who are entertaining the idea of starting a business in Texas, we’re here to help. Launching a Texas LLC isn’t difficult, but the state has a few rules you must follow to establish a company legally.
For starters, you need to figure out who will serve as the company’s registered agent. A registered agent is a person or company that accepts official documents for your business. Documents are usually sensitive in nature and may contain business financials or papers filed during a lawsuit. Since confidentiality is important here, the person or company selected must be trustworthy and reliable.
Selecting a registered agent is just once piece of setting up a Texas LLC. You’ll need to file paperwork with the state, get an identification number from the IRS, and create an operating agreement.
To help, this guide will provide answers to commonly asked questions.
Check out our roundup of the Best Registered Agent Services
How is an LLC formed in Texas?
In Texas, a company is formed by filing for a Certificate of Formation, but there’s an order to things that should be followed to set up an LLC. To help, follow these steps:
1. Name the company
Every company needs a name. The name of the company must be unique. In other words, another business in the state can’t have the same name. If the name is already in use, you have to think of another name.
To see if a name is available, run a business search on the Texas Secretary of State website. A name can be reserved for 120 days on the site as well. If you don’t plan to file a Certificate of Formation immediately, reserving a name is a good idea. There’s a cost to do so. The cost is $40.
After checking the availability of a name, make sure the name also follows these state laws:
- The name should have “Limited Liability Company” or “LLC” in the name.
- The name can’t refer to the government or imply that it has government ties.
- There are some names that may require additional approval from state officials.
Once the name has passed through all of these requirements, there’s one more thing to consider. Now is a good time to check on a company domain name. For business owners who want a domain name that matches the company name, it’s wise to check that now before recording the company’s name with the state.
2. Pick a registered agent
Next on the list is to pick a registered agent. A Texas registered agent is a person or company that will receive official documents for your company. These documents, which are usually sensitive in nature, are usually delivered in-person or by certified mail.
The owner of a company selects the company’s registered agent. The owner can be the company’s registered agent or another person, like an employee or friend. A company, like a registered agent service, can also fill this role. For a fee, a registered agent service will collect documents and notify the owner when they arrive.
3. File the Certificate of Formation
The State of Texas requires all businesses to file LLC formation documents known as a Certificate of Formation. In other states, these documents are called Articles of Organization. No matter the name, they are both meant to legally establish a business.
The Certificate of Formation can be found on the Texas Secretary of State’s website and can be submitted online or mailed in. The form will take minutes to fill out and will ask for the company’s name and address, the name and address of the company’s registered agent, a list of managing members, the company start date, and the signature of the LLC organizer.
There is a cost to file this document with the state. The cost is $300.
It will take three business days for the state to approve the document if it’s filed online and 5-7 days if it’s filed by mail. Once approved, your business is officially established in the State of Texas.
4. Create a company operating agreement
With the LLC formation documents filed, the next step is to create an operating agreement.
An operating agreement isn’t required by the state, but most business experts say it’s vital to have. An operating agreement explains how the company will operate. It should provide clarity about the hierarchy within the company as well as explain how profits and losses are managed.
Having this document completed before a company opens to the public is ideal, so there are no surprises along the way.
Again, this document is recommended but not required to start an LLC. Templates are available online for those who aren’t sure where to start.
5. Obtain an EIN
The IRS requires every business to have an EIN or an employer identification number. In truth, you can’t do much without it. An EIN is a nine-digit number that’s required to pay taxes, hire employees, apply for a bank loan, and open business bank accounts.
To obtain an EIN, go to the IRS website. The number is issued after a short question-and-answer period. The entire process takes about 5-10 minutes.
6. File an annual report
Texas, unlike other states, does not require LLCs to file an annual report. Other states require not only a report to be filed but also charge another filing fee.
What is a Texas registered agent?
A Texas registered agent is a person or company that receives documents on behalf of a company. The registered agent is listed on the LLC formation documents and must continually be updated with the state.
Do I really need a registered agent in Texas?
Yes. The State of Texas, and all states, require an LLC to have a registered agent on file with the state.
Can I be my own registered agent in Texas?
Yes. The owner of a company can be the company’s registered agent. It’s common for the owner to serve in this role, but there are other people and even companies that can fill the role as well.
Who can be a registered agent in Texas?
In Texas, a registered agent can be any adult or company with a physical street address and daytime availability. Since documents are usually sent or hand-delivered during regular business hours, the selected registered agent must be available during that time as well.
Why would a company choose to work with a registered agent service?
A registered agent service is a paid company that accepts documents for your business. For a fee, the company is listed as your registered agent, accepts documents as needed, and notifies the owner of any deliveries. For some business owners, having a registered agent service is ideal. Here are the benefits of such a service:
- Convenience. It’s easy to pay a company to collect documents and be “on call” to accept them. It’s especially convenient for owners who travel or who don’t have daytime availability.
- Peace of mind. For some business owners, having a service collect documents provides peace of mind. The owner knows nothing will get missed and he or she will be notified if something arrives.
- Privacy. Since some of the documents sent to a registered agent are sensitive, having them sent to an offsite location, like that of a registered agent service, is best for privacy, according to some business owners.
List of registered agents services
There are several registered agent services in Texas. To find one that suits your company, a simple Google search will Texas has a long list of reputable registered agent services. The Secretary of State can provide a detailed list, but to give entrepreneurs an idea of what kind of services (and prices) are out there, here’s a list of three possibilities:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in Texas?
The cost of a registered agent service will vary in Texas. The cost depends on the services you’d like to take advantage of. For basic services, like document scanning and immediate notification, the cost can be as little as $50-75 a year. For more assistance, like help filing reports with the state, the annual cost will likely hover between $100-200.
How does an owner select a registered agent in Texas?
An owner selects a registered agent by listing the person or company name and address on the LLC formation documents. If the registered agent changes, it must be updated with the state.
Can a company change its registered agent?
Yes. If a company’s registered agent must change, it can be done by filing a change form with the state. The filing fee is $15.
What’s a statutory agent?
A statutory agent is the same as a registered agent. Different states have different names. The terms resident agent and service of process agent are also used, although most states use the title registered agent.
What’s a commercial registered agent?
When filling out the LLC formation paperwork, you might be asked if the appointed registered agent is commercial or non-commercial. The definition of a commercial registered agent is a registered agent service, a non-commercial agent is a person or company that you’ve appointed to do the job but isn’t paid to do so.