LLC Formation Lawyer Thomas P. Finley

1. Filing a Certificate of Formation: Under Texas law, an LLC is formed when a certificate of formation is filed with the Texas Secretary of State.  The certificate must include specific information, such as the LLC’s name, purpose, duration, registered office address, and the names and addresses of organizers, managers, or members, depending on the LLC’s structure.

2.Definition of Certificate of Formation: The certificate of formation is the foundational document required to establish an LLC as a legal entity in Texas. It may also include amendments or restatements as necessary.

3.Record-Keeping Requirements: LLCs must maintain certain records at their registered office in Texas, including the address of the principal office where required records are kept. These records must be made available to members upon reasonable request. 
 
To form an LLC in Texas, the first step is to file a certificate of formation with the Secretary of State. This document serves as the legal foundation of the LLC and must include essential details such as the LLC’s name, purpose, and registered office address. The certificate must also specify whether the LLC will be managed by members or managers and provide their names and addresses.  The certificate of formation is a critical document, as it officially establishes the LLC as a legal entity under Texas law. It may be amended or restated as needed to reflect changes in the LLC’s structure or operations. Once the LLC is formed, it must comply with record-keeping requirements. This includes maintaining records at the registered office in Texas and making them available to members upon request. These records ensure transparency and accountability within the LLC.  Given the complexity of these requirements, it is advisable for small business owners to work with an attorney and accountant. An attorney can assist with drafting and filing the certificate of formation, ensuring compliance with Texas law, and addressing any legal issues that may arise. An accountant can provide guidance on tax implications and help establish financial systems for the LLC. 
 

To form a Limited Liability Company (LLC) in Texas, the following steps must be taken:

• Choose a Name for the LLC: The name must include “limited liability company,” “limited company,” or an abbreviation such as “LLC” and must be distinguishable from other names on record with the Texas Secretary of State. Certain terms, such as “bank” or “college,” may require additional approvals, and the name must not falsely imply government affiliation or be grossly offensive.
• Designate a Registered Agent and Office: The LLC must designate a registered agent and provide the address of the registered office. The registered agent can be an individual or an organization authorized to do business in Texas.
• Prepare and File the Certificate of Formation: The certificate of formation must be filed with the Texas Secretary of State. It must include:
• The LLC’s name.
• The type of entity being formed (LLC).
• The purpose of the LLC, which can include any lawful purpose.
• The address of the initial registered office and the name of the registered agent.
• The names and addresses of the initial members or managers, depending on whether the LLC is member-managed or manager-managed.
• The name and address of each organizer.

   The certificate can be filed online via SOS Direct or by submitting a paper form. A filing fee applies.

• Draft and Execute an Company Agreement: While not required by law, an operating agreement is highly recommended to outline the ownership and management structure of the LLC, as well as the rights and responsibilities of its members.  Thomas P. Finley is an experienced LLC formation lawyer and highly recommends business owners provide input into the drafting of the LLC Company Agreement also known as Operating Agreement because sometimes the relationship between Members of a LLC needs more specific written agreements to protect the business owners from future disputes. 
• Obtain Necessary Tax and Business Licenses: LLCs in Texas are subject to a state franchise tax. The LLC must also obtain a federal Employer Identification Number (EIN) from the IRS and comply with any local licensing requirements.
• Optional Steps: Reserve the LLC name in advance if desired, and ensure compliance with any additional requirements for specific business activities or industries

By following these steps, an LLC can be properly formed and registered in Texas, ensuring compliance with the Texas Business Organizations Code and other applicable regulations.  Contact me for more information. 

The operational aspects of LLCs are very flexible under Texas law. They also require less formality than a corporation. The LLC is a prevalent business entity for entrepreneurs seeking a low-maintenance option to the more rigid corporation structure. The power to run the LLC’s day-to-day operation can be by the members themselves, or they can provide for managers to run the LLC just like a corporation’s board of directors.