Start Your LLC in Texas Today
You can learn how to start an LLC in Texas reading this page. However whenever you need a lift, contact us at Green Tree if you need help on how to start a business in Texas or filing general income tax returns.
LLC, which stands for limited liability company, is fast becoming one of the most popular business entities among new and small. Mostly, because LLC does not have a complex tax structure. Compare to an S or C-corporation, LLC has a flexible structure. Along with easy tax understanding, it also gives you that pass-through tax benefit as well as limited liability and legal protection for your personal assets. Due to advantage of looking more legitimate company, why do you want to wait?
What are the benefits of an LLC?
- owners are not liable for the company’s losses. Only the company can be liable.
- There are no office titles like directors, shareholders, officers and so on. All owners have complete and equal authority on the company. However, this can vary based on the percentage of ownership.
- There is no requirement to hold annual meetings or keep records of the meeting’s minutes.
- Ownerships are in percentage ( e.g Chris owns 30% and Nina 70%).
Advantages of a Limited Liability Company
Unquestionably, there are several advantages to starting LLC in Texas, but here are a few that stand out.
- Liability protection: First, under an LLC, only the company is liable for the debts and losses incurred in the course of doing business, not the owners who are only responsible for their personal investment in the company.
- Pass-through taxation: Second, it is not necessary to file a tax return for the company. Also, owners report their share of profits and losses on their personal tax returns. You avoid double taxation unlike a corporate.
- Residency status: Third, owners do not have to be US citizens or permanent residents.
- Legal protection: Fourth, owners are less responsible for business debts and commitments.
- Credibility: Ablove all, partners, suppliers, and lenders favor your business more when you forme an LLC.
Disadvantages of a Limited Liability Company
Starting an LLC is an interesting option, but there are alos challenges.
Growth potential: Firstly, you can not issue shares to attract investors.
Inconsistency: Also, LLC rules can vary depending on the state.
Self-employment tax: Income may be subject to self-employment taxes.
Tax on appreciated assets: This can happen if you are converting an existing company to an LLC. Another way for state to force you additional taxes.
Is an LLC right for my business?
It really depends on what your short and long-term business goals are. We recommend that you to seek advice from Green Tree Tax Services Houston. So, think carefully about where the company is now and how you want your business to grow. Decpite all the challenges contact us to see LLC structure is right for you.
How to form an LLC in Houston Texas (Limited Liability Company):
STEP 1: Firstly, name your LLC
This is the first and most important step in starting your LLC. Do some research to ensure that the name you choose fits your business and is easily searchable for potential customers.
Follow the naming guidelines: The business name must contain the words Limited Liability Company or LLC/L.L.C. as an abbreviation.
certain words require additional documents (eg, Banc, bank, banking, etc.). Additionally, licensed personals (eg, doctor, engineer, etc.) to be part of the LLC. Restricted words are those who confuse the name of your LLC with a federal agency or state, for example, FBI, Secret Service, Treasury, etc.
Is the name available in Texas? Make sure the name is still available by registering. You can do that by creating a free account with the Secretary of State of Texas and run a name search. Registering an account on the Texas SOS website will also provide you the access to file any form of business online and make payments to the state.
Check if a webiste is available: Check the name of your LLC is available so you can reserve your domain. In fact even if you do not plan to make a website today, you can buy the domain name so keep others from acquiring it.
STEP 2: Second, select a registered agent
It is necessary to appoint a registered agent for a Texas LLC.
What is a Registered Agent? It is a person or company designate by your company to receive and send documents officially on your behalf.
Who can be an authorize agent? The registered agent must be a Texas resident or authorized to do business in Texas. You can choose an individual within the company, including yourself.
STEP 3: Submit your LLC forms to the Secretery of State.
You need to file the certification of formation for a domestic LLC. There is a nonrefundable fee of $300 payable to the secretary of state when submitting this form. But also, you can pay for express service, which cost additional $25.
STEP 4: Draft an operating agreement
What is an operating contract? An operating agreement is a legal document that describes the properties and operating procedures of your LLC. This agreement allows the formation of financial relations with the co-owners in the system for your business. An operating agreement to form an LLC in Texas is not necessary, but it is a good practice to have one.
STEP 5: Obtain an EIN
What is an EIN? The Employer Identification Number (EIN) is to identify a 
business entity with the IRS. It is essentially a social security number for any company.
Why do I need an EIN? An EIN is required for the following:
- Open an account in investment banking for the company.
- For the purposes of federal and state taxation.
- To hire employees for the company.
- You need to complete LLC tax preparation.
Call 713-384-9432 to start your LLC in Texas
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