LLC formation is a paperwork process and a contracting process. Here we will discuss the two step process and discuss how it is done.
First, you need to decide if an LLC is what you should be utilizing. This is largely due to choice based on your reason for opening the business and how you want to structure your tax consequences. Be sure to check with an attorney and/or a tax professional in helping you decide how best to accomplish this.
Next, you have to file paperwork with the Texas Secretary of State. The form can be found here. Using this you can file by mail or fax. There is also an online form, but even as an attorney I find it cumbersome and complicated. So, I would recommend the fax form. Once the paperwork is filled out and filed, you will receive a formation certificate from the Secretary of State and with that your business begins.
Before you file, but executed either contemporaneously or near the foundation date, you need an operating agreement, AKA partnership agreement. See our article here on what a partnership agreement is. But this should be done at about the same time as the foundation of the company. This agreement is what subjects you and your partners to abide by the terms of operating the company.
And finally, you should get your tax ID number from the IRS, this is known as the employer ID number. You can think of it as the social security number for the business. It is how the company will file its taxes.
Other than that there are of course other tax identification numbers and licenses to worry about. These are, of course, on a case by case basis, based on your desired business. But, essentially, this is LLC formation. Remember, this is not an exhaustive explanation. Consult a good attorney or CPA when considering forming a business. You do not necessarily have to go with our law firm, but find someone. We greatly encourage it.
Contact us HERE for more information and to speak with an attorney about your options when developing your business. The above does not constitute legal advice nor create an attorney client privilege. It is merely meant for entertainment purposes and general information.