How to get an LLC in Houston, Texas

How Can You Get an LLC in Houston, Texas?

Nearly 493,000 new businesses were formed in Texas in 2021. There were corporations, sole proprietorships, partnerships, and limited liability companies. If you’re considering starting a business, you may wonder how to get an LLC in Houston, Texas. You’re in luck because SimpleLawTX wants to help!

Below are the steps to forming an LLC, the benefits of this business structure, and a few commonly asked questions with answers. If you are ready to work with an experienced LLC attorney, call us at 281-697-6678 to request a consultation. If you want to learn more, keep reading!

What Are the Differences Between a Sole Proprietorship, Limited Liability Company, and Corporation in Houston, Texas?

There are quite a few differences between these business structures. Most are in how the business is owned and operated and the tax structure. We’ll explain each below:

Sole Proprietorship

A sole proprietorship is owned and operated by one person. These businesses often do not require a formal structure because the owner operates and completes business activities under their own name.

Limited Liability Company

The owners or members manage a limited liability company. An LLC is a more formalized structure that benefits the business owner, such as legal protection and more favorable tax structures. LLCs can have one or more business owners.

Corporation

A corporation is much like an LLC, except the owners are the company's shareholders. Corporations are a better business structure choice for large businesses with investors or several partners.

Of course, there are several other types of business structures. The above three are the most commonly used structures. If you are interested in forming a different type of business, SimpleLawTX would like to help. Contact us at 281-697-6678 to request a consultation.

How to Start an LLC in Houston, Texas

So, you want to start an LLC for your business…what do you do now? There are several steps to take to form an LLC in Texas. Keep reading to learn more about each of them:

Choose a Business Name

You must follow a few rules in Texas when choosing a business name. First, you can’t choose the same name as another business. This ensures potential customers are not confused between two businesses, and there aren’t potential disputes.

Second, you must have “LLC” or “limited liability” within the business name. You can quickly search your desired business name on this site and see if there is already a company registered in Texas with that name.

Choose a Registered Agent

A registered agent is someone who agrees to accept the papers if someone sues the business. It is an agent for service of process in Texas. A registered agent can be another business or person, not the LLC. A physical Texas address is required to be a registered agent.

File a Certificate of Formation

To form the LLC, you must file a certificate of formation. This document must include the following information:

• Business name
• Type of entity (LLC)
• Purpose of the LLC
• How long the LLC will last
• The registered agent’s name and address
• The LLC’s mailing address
• The name and address of each organizer/owner

Texas has a filing fee of $300 for this certificate as of 2023. You can mail the certificate or file it online at SOSDirect.

Create an Operating Agreement

An operating agreement is a Texas requirement, but the Secretary of State does advise businesses to create one. This document is mostly an internal agreement outlining how the business will operate. Most operating agreements include the following information:

• The percentage each member holds in the LLC
• Each member’s rights and responsibilities
• Voting power distribution
• How to distribute profits and losses
• Details for meetings and related note-taking
• The buyout process for members wanting to exit

If you are unsure how to draft this document, we recommend you speak to an attorney about the steps. SimpleLawTX wants to help with this! Contact us today to request a consultation.

Obtain an EIN and Other Legal Documents

LLCs with multiple members must have an employer identification number (EIN). This is used for IRS interactions and tax filing. You can apply for an EIN on the IRS website for free.

Additionally, you’ll need to obtain a business license and possibly permits, depending on your business type. If you sell goods or collect sales tax, your business must register with the Texas taxing authority.

Prepare for Annual Reports

Filing an annual report isn’t a requirement for businesses in Texas. Businesses must file annual franchise tax reports, however. These reports are also called “public information reports.” Franchise tax reports can quickly become complicated. We recommend you read more about them or contact an attorney for assistance with this step. Call SimpleLawTX at 281-697-6678.

Benefits of Having an LLC in Houston, TX

Besides offering protection for your business, there are other benefits to forming an LLC. We’ve outlined the top advantages of this business structure below:

Maintain Legal Protection

Owning and operating a business doesn’t come without risks. Creating an LLC protects the member’s personal assets. This means no one can come after the member’s belongings to satisfy debts or other obligations. Each member’s risk equals the amount they invested into the business.

Enable Pass-Through Taxation

Pass-through taxation means the business’s profits, losses, income, and other tax amounts flow through the LLC and are distributed among the members. This allows members to avoid double taxation.

Choose Your Taxation

An LLC can choose pass-through taxation or be taxed like a corporation. This gives the members more control over handling taxes and allows them to choose the best option for the business.

Have Easy Formation and Maintenance

Forming an LLC is a fairly easy process. Deciding how to outline the operating agreement is likely the lengthiest part of the process. And maintaining the LLC is also quite simple. Unlike corporations, shareholder meetings and annual reports are not required.

Create a Flexible Leadership Structure

An LLC can have one or more members. There are no rules around how many an LLC can have. The members can also be the business leaders, meaning they own and operate the company. There are many benefits to having a flexible leadership structure.

Boost Credibility

Do you want your business to look more credible with customers, potential investors, or industry professionals? An LLC does that. It shows everyone that the business is legal and that the owners are serious about achieving success.

LLC Formation FAQs

Many potential clients have questions about business formation in Texas. We’ve proactively gathered and answered the most popular questions about LLCs below:

How Can an LLC Attorney Help in Houston, TX?

Attorneys help clients by providing legal advice and services. Attorneys with knowledge of business law help clients determine the best business structure for their company, among other services.

SimpleLawTX offers several services to help form an LLC. Clients who work with us use our legal knowledge for the following:

• Business structure determination and formation
• Handbook writing
• Governance documentation
• File for non-profit status
• Complete registration requirements
• Understand and meet compliance standards

Our legal team wants to help with your LLC. Call us today at 281-697-6678 to request a consultation with our business law attorney.

Do I Need to Form an LLC in Houston, Texas?

There are a lot of factors that need consideration before we can answer this question. We recommend you consult an attorney to determine whether an LLC is the appropriate business structure for your company. Click here to request a consultation at SimpleLawTX.

What Is the LLC Meaning?

LLC stands for limited liability company. An LLC offers limited protection and liabilities for business owners. An LLC is a type of business structure. This structure is popular because it allows for limited liabilities, protects the business owners, and has pass-through taxation.

How Much Is an LLC in Houston, Texas?

To file a certificate of formation for an LLC, the fee is currently $300. This is only the filing fee. If you choose to speak with an attorney or have their assistance creating the necessary documents for your business, the fee would increase. At SimpleLawTX, we have a flat fee of $1800 for business formation services.

Can an LLC in Houston, Texas, Have Only One Member?

Yes! Single-member LLCs are valid business structures. LLCs can also have numerous other members. Texas offers many advantages to business owners in the state, regardless of their structure. If you want to learn more, call SimpleLawTX at 281-697-6678 to request a consultation with our business attorney.

Get Help From a Houston, Texas, Business Lawyer Today

Now you know how to get an LLC in Houston, Texas. If you want to bypass the time it takes to navigate the intricacies, you can work with an LLC attorney like SimpleLawTX! At SimpleLawTX, we have the expertise new business owners need to form and run their businesses legally and smoothly.

We want to help you in this new journey. Contact us today to inquire about our business formation services. We look forward to speaking with you!

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