Certificate of Formation in Texas | How to File in 2023

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File Certificate of Formation in Texas

Forming a Limited Liability Company (LLC) is popular for entrepreneurs looking to start or grow their businesses. LLCs offer numerous benefits, including limited liability protection for their owners and flexible management structures. One of the critical steps in forming an LLC is registering the Certificate of Formation with the Texas state agency. This article will provide a comprehensive guide on How to File Certificate of Formation in Texas.

Webinarcare Editorial Team will help you guide and understand the necessary steps to file for Certificate of Formation. You must be guided by all the factors gathered in this article.

What is Certificate of Formation?

Certificate of Formation is a legal document filed with the Texas Secretary of State to establish a Limited Liability Company (LLC) officially. The Certificate of Formation contains essential information about the LLC, including its name, Registered Agent, and management structure. Once filed and approved by Texas, the LLC becomes a legally recognized business entity, separate from its owners, and benefits from limited liability protection and pass-through taxation.

How to File Certificate of Formation

Aside from hiring a Registered Agent, you should also be aware that a Registered Agent should file Certificate of Formation in your Texas LLC. Here are the steps and guidelines for filing. 

Step 1: Choose a Name for Your LLC

The first step in registering an LLC Certificate of Formation is selecting a unique and appropriate name for your company. Your LLC’s name must comply with your state’s naming requirements, which typically include the following:

  • The name must be distinguishable from other registered business names in the state.
  • The name must include an LLC designator, such as “Limited Liability Company,” “LLC,” or “L.L.C.”
  • The name must not include prohibited words or phrases defined by your state’s regulations.

To ensure your chosen name is available through your state’s business name database, Texas Comptroller of Public Accounts Taxable Entity Search, usually available on the Texas Secretary of State’s website.

Step 2: Appoint a Registered Agent

Registered Agent is a person or entity responsible for receiving official correspondence and legal documents on behalf of your Texas LLC. Most states require LLCs to designate a Registered Agent when filing the Certificate of Formation. The Registered Agent must have a physical address in the state and be available during regular business hours.

It’s essential to choose a reliable and responsible Texas Registered Agent, as failure to receive and respond to legal documents can have serious consequences for your business. 

You can serve as your own Registered Agent or appoint a friend, family member, or professional Texas Registered Agent Services.

Step 3: Prepare Your Certificate of Formation

The Certificate of Formation is the legal document that officially establishes your Texas LLC. While the specific requirements in Texas, the document  includes the following information:

  • The LLC’s name
  • The name and address of the registered agent
  • The principal office address
  • The purpose of the LLC
  • The management structure (member-managed or manager-managed)
  • The names and addresses of the initial members or managers
  • The duration of the LLC, if not perpetual

In Texas, additional information may be required, such as an organizer’s signature or specific provisions related to the LLC’s operation. 

Consult the Texas guidelines to ensure you include all necessary information.

Step 4: File the Certificate of Formation

Once your LLC Certificate of Formation is prepared, please submit it to the Texas Secretary of State. The submission process may vary depending on the method of choice; Texas allow online submissions and mailing or hand-delivering the documents.

Online Process

To use the online service or download the Certificate of Formation form for your LLC, go to the website of the Texas Secretary of State. You were required to have an LLC name reserved while completing the form. Visit the state’s Texas Business Name Search to see if the business name you want to use is available there. When submitting, you must include a copy of your name reservation and your completed Certificate of Formation form.

Mail Process

It is also possible to mail the form if you wish. Please adhere to the guidelines listed below.

  • The Certificate of Formation must be downloaded in the Texas Secretary of State
  • Complete the necessary details in the form 
  • Two copies of the Certificate of Formation must be completed.
  • Include the two papers with the Texas LLC name reservation certificate in a self-addressed, stamped envelope.
  • Submit all paperwork to Secretary of State, P.O. Box 13697, Austin, TX 78711-3697.

Costs of Filing Certificate of Formation

Along with the filing of Certificate of Formation, you must pay a filing fee. In Texas, the Certificate of Formation fee costs around $300 which you can pay in the Texas Secretary of State. Confirm the correct fee amount and payment method for your state.

However, If you want to know more about the cost of forming an LLC, you can check out Texas LLC Cost.

Step 5: Obtain an Employer Identification Number (EIN)

After your LLC Certificate of Formation has been filed and approved, you should obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The EIN is a unique identification number used for federal tax purposes. It is required for most LLCs, especially those with employees or elect to be taxed as an S-Corporation. You can apply for an EIN for free online through the IRS website.

The application of an EIN in Texas can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Step 6: Create an Operating Agreement

Although most states do not require an LLC Operating Agreement when registering an LLC, having one is highly recommended. The Operating Agreement in Texas is a legally binding document that outlines the LLC’s ownership structure, management, and operating procedures. It helps prevent member disputes and provides a clear framework for the LLC’s operations.

Step 7: Register for State and Local Taxes and Licenses

In Texas, you may need to register for additional state and local taxes or obtain specific licenses and permits. Common registrations include sales tax, payroll tax, and unemployment insurance tax.  As an LLC, your business income will be subject to pass-through taxation, meaning profits and losses will be reported on your personal tax return. However, you may still be responsible for other state taxes, such as sales tax, payroll tax, or franchise tax which you can pay in Texas Comptroller of Public Accounts.

In terms of franchise tax for your LLC in Texas, there is $400 minimum. Consult your Texas Comptroller of Public Accounts and local government offices to determine which registrations and licenses apply to your LLC.

Step 8: Maintain Ongoing Compliance

Once your LLC is registered and operational, it’s essential to maintain ongoing compliance with state regulations. This typically includes filing Annual Reports, paying required fees which cost 1 year, and keeping accurate records of your LLC’s activities. Stay informed about Texas specific requirements to ensure your LLC remains in good standing.

Is the Certificate of Formation necessary to be filed in Texas?

Yes, the Certificate of Formation is necessary to be filed with Texas Secretary of State to legally establish and register a new business entity, such as a corporation or limited liability company (LLC). This document typically includes the company’s name, purpose, Registered Agent, and stock structure. Filing the Certificate of Formation is essential in forming a business and ensuring it operates legally and is recognized by Texas.

What is the best way to file Certificate of Formation? Is it online or by mail?

The best way to file Certificate of Formation depends on your specific situation and the state in which you are incorporating your business. Both online and mail-in options have advantages, and either method can be effective.

Online Filing:

  • Faster processing time, as it is usually processed within a few days or even hours.
  • Immediate confirmation of submission and payment.
  • Lower risk of errors, as the online form may provide guidance and prevent incomplete submissions.

Mail-in Filing:

  • Some people prefer the traditional method and feel more comfortable with paper documentation.
  • You can include a cover letter or additional documentation if you have specific questions or complex situations.

To determine the best method for your needs, check the Texas Secretary of State or similar department’s website for information on their preferred filing options and processing times. Online filing is more convenient and efficient, but both methods can be used effectively to submit your Certificate of Formation.

FAQs

How do I file an LLC Certificate of Formation in Texas?
To file an LLC Certificate of Formation in Texas, you must submit the form with the necessary fee to the Texas Secretary of State.
How much does it cost to file an LLC Certificate of Formation in Texas?
The fee to file an LLC Certificate of Formation in Texas is $300.
Is there a difference between an LLC and a PLLC in Texas?
Yes, a PLLC is a type of LLC that is specifically for licensed professionals in Texas.
Do I need a lawyer to file an LLC Certificate of Formation in Texas?
No, it is not legally required to have a lawyer to file an LLC Certificate of Formation in Texas.
How long does it take for my LLC Certificate of Formation to be processed in Texas?
The processing time for an LLC Certificate of Formation in Texas typically takes 7-10 business days.
Can I file an LLC Certificate of Formation in Texas online?
Yes, you can file an LLC Certificate of Formation in Texas online using the Texas Secretary of State’s website.
What information do I need to include on the LLC Certificate of Formation form in Texas?
You need to include the name of the LLC, the registered agent, and the management structure of the LLC on the LLC Certificate of Formation form in Texas.
Can I change the name of my LLC after I file the Certificate of Formation in Texas?
Yes, you can change the name of your LLC after filing the Certificate of Formation in Texas by filing an amended Certificate of Formation.
What is a registered agent in Texas?
A registered agent in Texas is a person or company who is responsible for receiving legal notices and documents on behalf of an LLC.
Can I be my own registered agent in Texas?
Yes, you can be your own registered agent for your LLC in Texas.
Does my registered agent have to be located in Texas?
Yes, your registered agent must have a Texas street address and be available to receive business documents during normal business hours.
Can a nonresident of Texas form an LLC in Texas?
Yes, a nonresident of Texas can form an LLC in Texas.
Do Texas LLCs have to file annual reports?
Yes, Texas LLCs are required to file annual reports.
How much does it cost to file an annual report for my Texas LLC?
The fee to file the annual report for a Texas LLC is $50.
When is the annual report due for my Texas LLC?
The annual report for a Texas LLC is due on the anniversary date of the LLC’s creation.
Can I change the management structure of my LLC after I file the Certificate of Formation in Texas?
Yes, you can change the management structure of your LLC by filing an amendment to the Certificate of Formation with the Texas Secretary of State.
Do Texas LLCs have to get a business license to operate?
Texas does not require LLCs to obtain a business license to operate.
How do I get a tax ID number for my Texas LLC?
You can get a tax ID number for your Texas LLC by applying for an Employer Identification Number (EIN) with the IRS.
Do I need to file a separate tax return for my Texas LLC?
No, a Texas LLC is not required to file a separate tax return; instead, the profits or losses from the LLC are reported on the owner’s personal tax return.
What is the difference between a single-member LLC and a multi-member LLC in Texas?
A single-member LLC in Texas has only one owner, while a multi-member LLC has two or more owners.
Can an LLC operating agreement be amended in Texas?
Yes, an LLC operating agreement can be amended in Texas.
What is an LLC operating agreement in Texas?
An LLC operating agreement in Texas is a legal document that outlines the ownership structure, management, and day-to-day operation of an LLC.
Is there a residency requirement for the owners of a Texas LLC?
No, there is no residency requirement for the owners of a Texas LLC.
What taxes does a Texas LLC need to pay?
A Texas LLC needs to pay state franchise taxes and possibly sales and use tax depending on the businesses they engage in.
What is the deadline for paying the Texas franchise tax for an LLC?
The Texas franchise tax for an LLC is due on May 15th each year.
What happens if I don’t pay the Texas franchise tax for my LLC?
If you don’t pay the Texas franchise tax, your LLC may be subject to penalties and eventually dissolution.
How do I cancel my Texas LLC?
To cancel your Texas LLC, you must file a certificate of termination with the Texas Secretary of State.
What happens if I don’t file the Texas annual report for my LLC?
If you don’t file the annual report for your Texas LLC, your LLC may be subject to administrative dissolution.
What is the first step to filing an LLC Certificate of Formation in Texas?
The first step is choosing a name for your LLC and ensuring that it is available for use in Texas.
Is there a fee to file an LLC Certificate of Formation in Texas?
Yes, there is a fee of $300 to file an LLC Certificate of Formation in Texas.
Can I file an LLC Certificate of Formation online in Texas?
Yes, you can file an LLC Certificate of Formation online through the Texas Secretary of State’s website.
How long does it take to process an LLC Certificate of Formation in Texas?
The processing time varies but generally, it takes 2-3 business days to process a completed filing.
Do I need an attorney to file an LLC Certificate of Formation in Texas?
No, you do not need an attorney to file an LLC Certificate of Formation in Texas. It is a relatively simple process that most people can handle on their own.
Can I reserve a name for my LLC in Texas?
Yes, you can reserve a name for your LLC for up to 120 days by filing a Name Reservation with the Texas Secretary of State.
How do I know if my proposed LLC name is available in Texas?
You can check the availability of a proposed LLC name in Texas by searching the Texas Secretary of State’s business name database online.
Can I change my LLC name after filing the Certificate of Formation in Texas?
Yes, you can change your LLC name after filing the Certificate of Formation by filing an Amended Certificate of Formation with the Texas Secretary of State.
Do I need to file an Operating Agreement with the Texas Secretary of State?
No, you do not need to file an Operating Agreement with the Texas Secretary of State, but it is strongly recommended that you have one in place.
Should I form my LLC in Texas or another state?
If the LLC is going to operate mainly in Texas, filing in Texas makes sense. However, if the LLC plans to conduct business in several other states, it may be more beneficial to file in a state that has more favorable regulations.
Can I file an LLC Certificate of Formation by mail in Texas?
Yes, you can file by mail, but it may slow down the processing time. You can find the mail-in form and instructions on the Texas Secretary of State’s website.
What is the Registered Agent requirement in Texas?
All LLCs in Texas must have a registered agent with a physical address in Texas. They must be available during normal business hours to receive legal papers and lawsuit documentation on behalf of the LLC.
What happens after the LLC Certificate of Formation is filed in Texas?
Once the Certificate of Formation is filed and processed, you will receive a filed-stamped copy from the Texas Secretary of State.
How many people are required to form an LLC in Texas?
An LLC can be formed in Texas with just one member.
How often do I need to file an Annual Report with the Texas Secretary of State?
LLCs in Texas need to file an Annual Public Information Report every year.
Can foreign LLCs do business in Texas?
Yes, foreign LLCs can do business in Texas as long as they comply with all state requirements, including registering with the Texas Secretary of State.
Where can I get a blank Certificate of Formation form to file with the Texas Secretary of State?
The Texas Secretary of State’s website has a fillable Certificate of Formation form that you can download.
Do I need to disclose the names of all members in the LLC when filing the Certificate of Formation in Texas?
No, you only need to disclose the name of one organizer in the LLC when filing the Certificate of Formation in Texas.
What is a tax ID number and do I need one to file an LLC Certificate of Formation in Texas?
A tax ID number is an Employer Identification Number (EIN) used to identify a business entity. Yes, you need to obtain an EIN for your LLC, and you can do so through the IRS website.
Do I need to submit a Certficate of Formation to the Texas State Comptroller’s office?
No, you do not need to submit a Certificate of Formation to the Texas State Comptroller’s office; filing with the Texas Secretary of State is sufficient.
Can an LLC be formed for any business activity in Texas?
Yes, an LLC can be formed for any business activity in Texas.
Can minors be members of an LLC in Texas?
No, minors cannot be members of an LLC in Texas.
Can members of an LLC be listed as anonymous in Texas?
No, members of an LLC must be identified in the Certificate of Formation filed with the Texas Secretary of State.
Can I form an LLC for my professional practice in Texas?
Yes, you can form a professional LLC in Texas for many professions, including attorneys, accountants, and architects.
Can I add or remove members from my LLC after the Certificate of Formation is filed in Texas?
Yes, you can add or remove members from your LLC after the Certificate of Formation is filed by filing an appropriate Statement of Change with the Texas Secretary of State.
Can I change the Registered Agent for my LLC after filing the Certificate of Formation in Texas?
Yes, you can change the Registered Agent for your LLC by filing a Statement of Change with the Texas Secretary of State.
What is the general structure of an LLC in Texas?
An LLC in Texas has members, which can be individuals, other LLCs, corporations, or any other legal entity.
What are some of the benefits of forming an LLC in Texas?
Forming an LLC in Texas can protect personal assets, provide tax flexibility, and offer greater flexibility in terms of management and ownership structure.
Is there a limit on the number of members in an LLC in Texas?
No, there is no limit on the number of members in an LLC in Texas.

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Conclusion

Registering an LLC Certificate of Formation is critical in establishing your business as a legally recognized entity. By following this comprehensive guide and researching your state’s specific requirements, you can successfully navigate the registration process and set your LLC up for success. Remember that forming an LLC is just the beginning; ongoing compliance and diligent management are necessary to ensure your business thrives in the long run.

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