To operate your LLC, you must comply with federal, state, and local government regulations. The distinction protects the owners from debts accrued byand legal action taken againstthe company. Typically the LLC Agreement is in place to protect from liability, and then you can elect to have the LLC taxed as an S-corp. Request certificates of account status to terminate a business or request tax clearance letters to reinstate a business by using Webfile, our online system. Talk to a Business Law Attorney. Just follow these seven steps and you'll be on your way. Most LLCs do not need a DBA. Learn business employer requirements If you have employees in Texas, you will have to register for Unemployment Insurance Tax through the Texas Workforce Commission on behalf of your employees. The second step is to search the Texas Comptroller of Public Accounts . However, most business owners choose to do so anyway. You can operate your business as a sole proprietorship, although you may be shielded from personal liability if you operate under one of Texas' business entities like an LLC, Corporation, or some other type of limited liability business entity. Steps to Form a Texas LLC Forming an LLC in Texas on your own doesn't have to be difficult. Before making your decision, its important to understand the key tax, ownership structure, management and liability differences between LLCs and corporations. Her work has appeared on Business.com, Business News Daily, FitSmallBusiness.com, CentsibleMoney.com, and Kin Insurance. You need to name your business. Start now and decide later Packages from $49 (plus state filing fees) Need Professional Help? The second step is to search the Texas Comptroller of Public Accounts website. The basic total cost of forming an LLC in Texas is $300. Start a Texas LLC in 5 Steps Cost To Set Up an LLC in Texas Next Steps After LLC Formation Alternative Business Structures in Texas Texas Company Formation Resources Frequently Asked. However, qualifying LLCs can also choose to be taxed as an S-corp or even a C-corp. Average processing times are estimated to be between 5-7 business days for mail-in forms and 4-5 through SOS Upload. OPTION 2: Apply for an EIN by Mail or Fax, Mail to:Internal Revenue ServiceAttn: EIN OperationCincinnati, OH 45999. 1. This application takes just a few minutes to complete and the EIN is issued immediately. www.cclerk.hctx.net. A domain name from a provider like GoDaddy.com will cost you around $20 to $50 per year. This list includes: To apply for one of these permits or learn more, visit The City of Houston Permits Page. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. We are your one-stop-shop for your Alabama, Houston County business license from the big picture requirements down to . You can apply online, by mail, or by fax. Here are the steps you need to take to form a limited liability company (LLC) in Texas. If your business is sued, for example, you cannot be held personally liable for any damages except that which has been invested in the business. There is additional information available through the official Texas Comptroller website as to how this tax is calculated. That will not only find a unique name for your business but an available URL to match. Houston is the seat of Harris County and the economic center of Houston-Sugar Land . FOR INTERNATIONAL APPLICANTS: You do not need an SSN to obtain an EIN. For a sample listing of required licenses and fees contact the Houston County Business License office at 334-677-4742 or the Alabama Department of Revenue, Business License Division at 334-353-7827. Many entrepreneurs in Texas set up LLCs because they are often more affordable than corporations with some liability protection. Call 512-463-5555, email corpinfo@sos.texas.gov or visit www.sos.texas.gov for more information. If you decide to sell or transfer ownership of your business at some point in the future, forming an LLC can make the process simpler and less expensive. When readers purchase services discussed on our site, we often earn affiliate commissions that support our work. 12/15/2022. You can engage in business as a sole proprietorship instead. Your use of this website constitutes acceptance of the Terms of Use, Supplemental Terms, Privacy Policy and Cookie Policy. Instead, the tax burden is passed through to the members of your LLC. Information provided on Forbes Advisor is for educational purposes only. The State of Texas does not require a general "business" license. Get hired! When determining how to start an LLC, there are several types of LLCs to choose from. But DBAs often confuse fledgling entrepreneurs, as its not a business structure such as an LLC or corporation. A DBA in Houston can be easily obtained by filing an assumed name certificate with the Harris County Clerks Office and the Secretary of State. You can start an LLC in Texas by completing these six steps: Choose your LLC's business name. And competing with another company with the same name can be bad for businessit confuses consumers, which is never good. If you are filing as a Foreign Texas LLC read our guide for more information. Whether you are starting an LLC in Texas, or trying to get your LLC Online, deciding which formal entity is right for your company when you are starting a business in Texas is not always easy. Here are just a few local Houston organizations that can help: Now that youve made it official and formed your Houston, TX LLC, there are a few more easy steps to follow to complete the setup and protect your new business. Generally, businesses need an EIN, with a few limited exceptions, but there is no fee for filing an EIN with the IRS. If you are looking for more information about starting a business in Texas, check out our useful articles: An LLC, or limited liability company, is a legal business entity thats considered separate from the owner or members. Just as you must include certain terms in the name, you cannot include certain terms. A registered agent must be a resident of Texas or a corporation, such as a registered agent service, authorized to conduct business in the state of Texas. A DBA is essentially a registered nickname for your already established business. The maximum local tax rate, which is applied on top of the state rate, is 2%. It outlines the rules by which your company does business, keeps you prepared for everyday situations, and protects against the unexpected. For example, if your business is named Houston Private Investigations, LLC, youll need to hold a valid Texas Private Investigator License. There is more than one business structure to choose from: Filing for a doing-business-as, or DBA, name (known in Texas as an assumed name certificate) is considerably cheaper than establishing a corporation or LLC, thanks to the $25 state filing fee. LLC owners report business income and losses on their personal tax returns. Read our best business license services review. Find out how to get the necessary Texas business licenses and permits for your LLC with our Texas Business License guide. It is similar to a corporation but with a less formal structure and more tax flexibility. Houston Map. This person must be available at that address regularly during business hours to receive personal service of legal documents. An LLC can help you to manage your business more effectively. However, some types of businesses require state-wide licenses. The Certificate of Formation can be filed by mail or online. Important: Persistent failure to file could lead to the dissolution of your Texas LLC. For example, an LLC can protect your personal assets and bank accounts when your business is facing a lawsuit or is in debt. How to Form a Texas LLC Yourself in 6 Steps Step 1 - Choose a Unique Business Name and Complete a State Business Search Step 2 - Provide an Official Address for Your LLC Step 3 - Assign a Registered Agent Step 4 - File Your Certificate of Formation with the Texas Secretary of State Forming an LLC can be a complex process involving both state regulations and legal paperwork; however, with some careful guidance from an experienced business lawyer or accountant, it wont feel overwhelming or confusing. Choose your business location 3. These business types are independent entities therefore filing of a business name with the Texas Secretary of State protects this name (in Texas only), therefore no other business can use this name within the state. To do so, you must register an, For help creating an LLC operating agreement, see, , by Anthony Mancuso (Nolo) or use Nolo's. This officially registers your LLC with the state. You will need to pay the $25 DBA fee to add the DBA to the LLCs approved name list. Heres what should be on your list: One popular question regarding LLCs is whether one is necessary in the first place. What is a Texas Registered Agent? Ultimately, it will help reduce conflict. With a total area of 637.4 square miles, it is the ninth-most expansive city in the United States. If not permanent, an estimated length of time that the company will exist, The registered street and mailing addresses of the LLC, The name and address of the LLCs registered agent, The name and address of each person forming the LLC, Your business is taxed as a C or S corporation, Alcoholic Beverage Permit (enforced by TABC and by the City of Houston), Special Events, Charitable Events, Circus and Parade Permit, How long you intend to use the DBA (not longer than 10 years), The street or mailing address of your LLCs principal office, whether inside or outside of Texas, The counties in which your LLC is doing business using the DBA. If no business premise will be maintained, it must be file in each county where the business will be conducted. Right Choice Plumbing LLC is here for you! Fulfill those first before adding any of these terms to your LLC in Texas. Most banks and online payment services require them to open an account. You might have your heart set on a name, but there are important things to consider first. For more information, see our Texas LLC Annual Report guide. An EIN number is required for the following: Where do I get an EIN? Do not use words that could confuse your business with a government agency (FBI, State Department, CIA, etc.). Why do I need an EIN? File your Certificate of Formation with the Texas Secretary of State. You can apply online, by mail, or by fax. The secretary of state is prohibited by law from releasing this information. This is because buyers will only need to purchase the membership interests in the LLC, rather than the entire business itself. What is a registered agent? Business name availability can also be checked on the Texas Secretary of State website prior to filing your LLC, although the SOS will collect a $1.00 fee for these searches. Yes, you can form an LLC for your business in any US state. For more information on foreign LLC registration requirements, see the information page on the Secretary of State's website. 3. Here is some useful information to help guide you through this process. No. The sixth step is to search the Texas Workforce Commission website. Arm Strong Gutters repaired a damaged gutter from a tree hitting it after this recent storm, installed an additional gutter at our request, and replaced some damaged roof shingles. You can also have multiple names for your LLC if you want to run more than one business through your LLC. To do business in Texas, all LLCs organized outside of the state must register with the Texas Secretary of State. Run tenant background checks, credit checks, eviction history, and more. Once approved, it is also suggested that you obtain any relevant tax IDs and business licenses in order to successfully launch your venture. Do I need a lawyer to form an LLC in Texas? OR. The current sales tax rate for Texas is 6.25%. Once you have all relevant paperwork filled out, you can: Mistakes happen. When completing the document, carefully identify what you wish to correct. Overall, the taxation savings will depend on how you elect for the LLC to be taxed, but there are definitely opportunities for tax savings depending on how you choose for the LLC to be taxed. Once the state receives your documents, they will stamp and return the duplicate form to you. Start A Business Registration Without properly registering, you cannot operate your business. To get started, you must file Articles of Organization with the correct agency in your state. Identify spam and scam calls. Instead, you can use an assumed name, also called a "DBA" (short for doing business as), trade name, or fictitious business name. In addition, they provide a greater flexibility in ownership, taxation, and management than other types of business entities. Youve come too far to let compliance issues shut you down. These include: You may use terms such as bank, university, attorney or doctor as long as you meet the Texas State Government requirements for such entities. What is an operating agreement? If you make a simple change to your name such as Houston Air Conditioner Service, LLC, you should be okay. 60,510 open jobs in Houston. This includes using another companys name or choosing a name that would cause people to confuse it with government entities. While this is an internal document, it is an important one to running the business. If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Startup Guide Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Once you have verified your name is available, you can now select a professional service to complete the LLC formation process for you. An LLC can provide flexibility in how you structure your business. For those considering forming an LLC for their business, it is important to understand that knowing the basics can help you best take advantage of an LLCs advantages. Right choice was very available to answer all my questions regarding a water heater project I needed done. Recommended: Northwest provides the first year of registered agent service free with LLC formation ($29 + State Fees). If you file an LLC and later realize there are errors to correct, you will have to file a Certificate of Correction or Form 403 with the Texas Secretary of State. The Texas Secretary of State does not require filing annual reports, but you might be responsible for filing with the State Comptrollers office. A registered agent must consent to appointment in written or electronic form. First to Review. Youll want to ensure that it follows state rules and isnt too close to an existing businesss name. It will cost $40 to file a name reservation application if you wish to reserve your LLC name prior to filing the Certificate of Formation. EINs are tax identification numbers assigned to businesses by the Internal Revenue Service. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands, of dollars in the process. For example, you can choose to have one or more members in your LLC, and you can also choose how those members will share profits and losses. For more information on state LLC tax registration, see Nolo's article Texas LLC Annual Filing Requirements. Before filing the application, make sure the LLC's name is available in Texas by checking the Texas business name database. 2023 Forbes Media LLC. You may also want to weed out names that look or sound similar to an existing businesss name, especially if its operating in your industry or locality. You can conduct a name search for free on the Texas Comptroller of Public Accounts website to make sure your proposed name is available. An LLC comes with a number of benefits that are not available to regular corporations, sole proprietorships or partnerships. You'll need to choose a name to include in your articles before you can register your LLC. Generally, if you provide a service that requires you to obtain a Texas state license before practicing, then you are a professional service. For in-depth information on this requirement, as well as a fillable consent form, view the Acceptance of Consent Form 401-A. Houston, TX 77002 However, many states do legally require LLCs to have an operating agreement in place. Having a solid understanding of Houston LLC law will also help you avoid potential pitfalls and legal problems down the road. If you choose to use a law firm, you could spend up to $500 per year. How long does it take to form an LLC in Texas? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC. Without properly registering, you cannot operate your business. $35 Texas Registered Agent Service When you hire us as your registered agent, you not only get the best deal in Texas, but you also get a usable business address and we'll even scan your mail to you. 1. Fees and requirements for licenses and permits will vary depending on what sort of business license you need. Our law firm can help you register an LLC in Texas. What is an operating agreement? 1. It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the Texas Secretary of State. You can find information on Texas commercial registered agents here. If you provide a licensed professional service in Texas and want to form an LLC, you will be required to form a professional LLC (PLLC). Starting up a Limited Liability Corporation can be an arduous task, and having the proper guidance is essential. To file, youll need the following basic information as listed in Section 3.005 of the Texas Business Organizations Code: You can print and mail the fillable Certificate of Formation or send them to the Secretary of State through the SOS Upload system. As already discussed, the name should include one of the following terms: It should also be a unique name that passes the business entity search test on the Secretary of States website; you cannot form an LLC with the same name as an existing entity doing business in Texas. Depending on the tax involved, you may be able to register online, by mail, or in person at a Comptroller field office. It costs $300 to file your Certificate of Formation with the Texas Secretary of State. The key elements that should be in your LLC operating agreement include: Without this agreement an LLC can lose its status and expose the personal assets of the owners and members to lawsuits against the company. For this, you need to include a cover letter specifically requesting expedited processing with a phone number where you can be reached during business hours. Prior to joining the team at Forbes Advisor, Cassie was a Content Operations Manager and Copywriting Manager at Fit Small Business. An LLC can make it easier to sell or transfer ownership of your business. You need to file a Certificate of Formation in order to create an LLC in Texas. Houston is also located in the Dallas metropolitan area and has seen consistent population growth over the past ten years. Talk to a Business Law Attorney. 8 AVG COMPANY SIZE Texas has a total of 938,289 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. You can create a Texas LLC by filing a Certificate of Formation for a Limited Liability Company (Form 205) with the Secretary of State. Unlike most states, Texas doesnt require a state income tax. Then call the IRS at 267-941-1099 to complete your EIN application. Establishing an LLC also provides credibility when dealing with investors, clients and suppliers. Contact us today and well take care of everything for you so you can focus on running your business. Therefore it is significant that any person wishing to form a successful business look into setting up an LLC. Find out which is best for you. Start off by finding a unique name for your business, making sure to follow the naming requirements. The certificate must include: You can file the certificate online through the Texas Secretary of State SOSDirect website, or by mail. Take our business formation quiz to find out what the best form of business ownership is for you. Your agent is the gatekeeper between you, the state, and the public. Service Through Innovation. The fifth step is to search the Texas Department of State Health Services website. 2. The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. Something went wrong. Find residents, tenants, property owners and property information. An LLC can help to protect your personal assets. Benefits i. If you have been injured and need help, you'll want to find the best personal injury attorney who can help you get the money you deserve. To learn more about Texas registered agents, read our full guide. Keeping your business compliant is vital to avoid fines, penalties, or state sanctions. It is a formally filed business entity that establishes your business as a designated entity in the state of Texas. Anyone in Texas can form an LLC, they do not have to be an attorney. How much does an LLC cost in Houston, Texas? In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees without much benefit in return. Learn how to make the most of your LLCs tax flexibility. It is not strictly necessary to form an LLC in order to start a business. It is used to identify a business entity and keep track of a businesss tax reporting. Start A Business You've decided to start a business and now it's time to legally register it. Read our guide to getting an EIN for international entrepreneurs. You are not generally required to file for a DBA (Doing-Business-As). You can check for name availability at the Texas Secretary of State SOSDirect website. There are several advantages to buying a matching domain, even if you dont plan on building a website just yet. For more information, see The LLC Operating Agreement. If you operate your business as a sole proprietorship or partnership, your personal assets are at risk if your business is sued or incurs debt. It costs $24 to file for the business name and one owner and $.50 for each additional owner. Texas state law requires that you appoint a registered agent and provide their details at the time of filing your Certificate of Formation. Its free of charge and shouldnt be paid for unless part of a larger LLC formation package. An LLC (Limited Liability Company) is often the best choice of structure for a business, large or small. Texas Business Articles If you're a Texas business owner looking to create an LLC, then you've come to the right place. The agent may be a Texas resident or a business entity authorized to do business in Texas.