How do i make my business an LLC in texas [Definitive Guide]

Last updated : Sept 25, 2022
Written by : Dario Greenough
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How do i make my business an LLC in texas

How much does it cost to become an LLC in Texas?

The basic total cost of forming an LLC in Texas is $300. The basic total cost of registering a foreign LLC in Texas is $750. The optional costs of a certified copy of the filing document, a certificate of status, and hiring an outside registered agent could raise this total by between $85 and $535.

Do I need a lawyer to form an LLC in Texas?

Although a business lawyer is not required, setting up an LLC without one may result in complex legal issues that may end up costing your LLC a significant expense. There are many reasons why it's beneficial to hire an experienced small business attorney in forming your LLC in Texas.

Do LLCs in Texas pay taxes?

State Business Tax By default, LLCs themselves do not pay federal income taxes, only their members do. Texas, however, imposes a state franchise tax on most LLCs. The tax is payable to the Texas Comptroller of Public Accounts (CPA).

How long does it take for an LLC to be approved in Texas?

The office normally processes non-expedited documents within 5-7 business days. Expedited service is available for an additional $25 per document and expedited documents are generally processed by close of business the first business day following the date of receipt.

Does an LLC expire in Texas?

In Texas, does an LLC have an expiration date? A limited liability company's articles of organization may allow its members to designate the duration of the company. An LLC's expiration date can be specified but if no expiration date is specified, the LLC might continue indefinitely.

How much does it cost to get a tax ID number in Texas?

To obtain an EIN for your Texas business, you must file a Form SS-4. There is no fee for applying for an EIN.

What can you do with an LLC in Texas?

The key benefit of forming a limited liability company (LLC) in Texas is limited liability protection. Limited liability can protect your personal assets in the event your business is sued or can't pay its debts. Other Texas LLC benefits include: Pass-through taxation.

How do I register my LLC?

  1. Decide on a Business Name.
  2. Designate a Registered Agent.
  3. Get a Copy of Your State's LLC Article of Organization Form.
  4. Prepare the LLC Article of Organization Form.
  5. File the Articles of Organization.
  6. Create an Operating Agreement.
  7. Keep Your LLC Active.

Do I need a registered agent for my LLC in Texas?

The Texas Business Organizations Code (“BOC”) requires every domestic or foreign filing entity to maintain a registered agent and office in Texas. The BOC also permits the filing of an appointment of agent for service of process by an unincorporated nonprofit association.

Can I write off my car with an LLC?

The Internal Revenue Service identifies taxpayers who qualify to claim a business vehicle write off as: Self-employed individuals. Sole proprietors and owners of limited liability companies (LLCs) with a tax classification that allows pass-through income on Tax Form 1040 qualify for the write off.

What can be written off with an LLC?

What expenses can you write off as an LLC? There is a long list of expenses that you can deduct as an LLC. Some of the main operating costs that can be deducted include startup costs, supplies, business taxes, office costs, salaries, travel costs, and rent costs.

Can IRS come after an LLC for personal taxes?

While the IRS can't levy your business account for your personal back taxes, the IRS can freeze and seize your company's assets to satisfy your tax debt if your business has a sizable tax liability. In most cases, for the IRS to implement a levy, your business must have: A substantial amount in back taxes.

What taxes does an LLC pay in Texas?

The two types of business taxes for an LLC in Texas are sales tax and the Texas franchise tax. All businesses are subject to sales tax.

What are the benefits of having an LLC?

A Limited liability company (LLC) is a business structure that offers limited liability protection and pass-through taxation. As with corporations, the LLC legally exists as a separate entity from its owners. Therefore, owners cannot typically be held personally responsible for the business debts and liabilities.

What is a sole proprietorship vs LLC?

An LLC exists separately from its owners—known as members. However, members are not personally responsible for business debts and liabilities. Instead, the LLC is responsible. A sole proprietorship is an unincorporated business owned and run by one person.

Do LLCs pay taxes?

All of the profits and losses of the LLC "pass through" the business to the LLC owners (called members), who report this information on their personal tax returns. The LLC itself does not pay federal income taxes, although some states impose an annual tax on LLCs.

Does a single member LLC pay franchise tax in Texas?

Entities Subject to Franchise Tax Each taxable entity formed in Texas or doing business in Texas must file and pay franchise tax.

What should I name my LLC?

  • Make It Legal. The most important thing when you're choosing an LLC name is to make sure it's legal.
  • Make It Memorable. You want your LLC name to be something people can remember.
  • Make It Meaningful.
  • Make It Original.
  • Make It Distinctive.
  • Make It Domain Name Ready.
  • Make It Social Media Friendly.

Is a tax ID and EIN the same?

An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity. It is also used by estates and trusts which have income which is required to be reported on Form 1041, U.S. Income Tax Return for Estates and Trusts.

How much is a Texas business license?

How Much Does a Business License Cost in Texas? If your municipality requires a standard business operating license or a specialized license, the cost may range from $15 to $30 on the low end to several hundred on the high end.

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How do i make my business an LLC in texas

Comment by Elbert Teque

this is eric your focus investor and in today's video i'm going to show you exactly how to set up your llc in the state of texas in under 20 minutes it's going to be the cheapest option and is not as difficult as you think so let's jump into this power packed episode so the first thing we need to ask is what is an llc it is a limited liability company okay and that simply means and i'm not an attorney so you know if you need legal advice seek out an attorney but assembly is a llc is limits the liability uh that can fall back on you so and you're here in the focus investor channel we talk about real estate investing and helping you achieve financial freedom through real estate investing so you can use an llc if you're fixing flipping a house because if something goes wrong somebody slips and falls a contractor tries to sue you a buyer tries to sue you that they're trying to buy the house from you well they can't take anything outside of your llc right everything that is in your llc is up for some liability but they can't go after your personal assets if you did the business within the llc so it really simply limits the liability okay now since we understand the basic uh meaning of what a llc is uh then what are three ways you can actually start an llc well one is through the legal service called legal zoom legalzone simply is a website where you can get a lot of things done uh cheaper than you can oftentimes going through an actual attorney so they can do wills they can do partnerships they can review documents and of course they can create business entities whether it's llc you know different type of incorporations and things of that nature so legalzoom can do that they make it super simple but it is not the cheapest option and what legalzoom simply does is they get all of your information and then they go to the actual state itself here in the state of texas and they file it for you uh and then they charge a 79 filing fee and then you can up the actual things if you want a certificate holder that shows that your llc you know nice plaque and there's different add-ons where you know that 500 price tag might jump to 600 700 800 right so they add us a la carte to it but to form a simple normal llc there's a simpler way and a cheaper way to do it now the second option you can do is of course you go through an internee okay and you a local attorney here in the state of texas they can help you out they can ask you a bust a bunch of questions um but it's going to be more expensive so legalzoom i'll put a a point down here legalzoom could be you know 500 plus right it could be up to seven eight hundred dollars depending on what you're adding to that package because you have to pay for the tax uh the sales tax you're going to pay for their filing fee and all that stuff so it's going to be the base basic price is going to be around 500 give or take an attorney which of course if you're going to do a partnership and things are going to get complicated and you don't have experience with a partnership agreement and all that stuff then of course go through an attorney but that attorney cost might be 800 to a thousand dollars right and of course if you are getting a basic llc they're still gonna charge you eight hundred to a thousand but they're simply gonna go and do the method i'm gonna teach you right now and just tack on their three four five hundred dollar fee on top of that okay now here's the golden goose okay you instead of going through legal zoom instead of going through an actual attorney if it's a basic llc and of course in real estate investing you're probably gonna form a lot of llc's because if you're getting um buy and holds or rental properties you don't want to put all rental properties under one llc you you can do separate llc's for that or in the state of texas and select other states you can do a series llcs or series llc but that is a little bit more complex we're not going to talk about that in this particular video but normal llc's you want to separate your properties in separate llc so that way if somebody tries to sue you or to come after you for any type of damages or liability they can't get all of your properties right because each property is housed under one llc so but the third golden goose is going through the secretary of state website right so that means here in the state of texas you can go directly to the secretary of state because legalzoom when they do that they have to go through the secretary of website or secretary of state website same with thing with attorney they have to go through a secretary of state website or the secretary of state website so how can you form a basic llc and avoid the cost get it back within three or four business days and it's the cheapest option and it's simply the simplest option if you're going a basic llc well let me show you okay so first we're going to go into google and we're going to do we're going to google texas secretary of state okay once that pulls up we'll see here texas secretary of state right so you know it's official you click on that and this is a great website right um they have tons and tons of information on uh changing your assumed name and filing forms and in stopping and and franchise tax and all this other stuff but it's a great website when you open that up you'll see here this is the main page this is what's called sos or secretary of state direct website so that means you can form things you can update addresses you can update forms and assume names and everything all online it's no longer that you're having to print something out throw it in snail mail hopefully they got it um calling to verify that they got to know you can actually do it real time online so here on the website right secretary or sos direct that's for business searches and online filings you click on this and of course you are going to enter the site and i'm going to enter my my contact info or my user id and password info that's going to open up um the actual secretary of state website right now when you first jump in they want to make sure that whatever you do they're going to charge you right so if you're looking for a name to see if that's a name availability if you're actually going to file it's not like you have to enter your information your credit card information afterwards they want to make sure it's on on uh it is actually on file so that way as soon as you click yes your credit card is going to be charged so i'm going to put my information in here all right now i'm going to hit continue so we put all our credit card information in an updated address okay so we're actually in the website in the the portal and you're gonna come up here and go to business organizations so once that opens up the first thing you want to check is and there's a form on here too if you're not ready to uh start an llc you can actually save that name if it's available until you're actually ready to create that llc but the first thing you want to do is a name availability search right so you can click here and you can put uh let's see um i fix houses righ

Thanks for your comment Elbert Teque, have a nice day.
- Dario Greenough, Staff Member

Comment by OleottiY

how to start an llc in texas hi my name is eric and in this video i'm going to show you three methods to start an llc in texas why you might want to choose one method over another but also some things to be aware of when setting up your llc if you're not familiar with the term piercing the corporate veil you'll definitely want to watch this video and towards the end of this video i'll actually talk about ways that you can potentially save on taxes with your business so first method that you can do is going directly through your state website with texas and this is the link right here you can find that in the description of this video and any kind of question you have about setting up an entity in texas is going to be on this page the one downside of going through your state website is a lot of times they're not the easiest tools to navigate you know from a user experience it can be kind of difficult and they'll just throw so much information at you so you're like where do i even go well the first thing you may be interested in is the fee schedule so if you look at this again a lot of information but what we want to look at is this row here this is the cost for you to set up an llc in texas the filing fee is 300 so no matter what route you go you're not going to get around this 300 filing fee with the state of texas just know that up front but now if we go back why don't we take a look and scroll down here it says can i file a certificate of formation online so if you do the diy route you're just using the state website it says sos direct and this is going to take you through where you can enter the site if you do go this route it is one dollar to get set up it's just kind of like to help them with their operations again though some of the difficulty of going these routes is these sites through a state website can be pretty hard to navigate and it's like you need adobe acrobat and winzip and it's just going to throw a lot of information at you that can be kind of complicated now in your situation if you do have a complicated situation you have a business that's making money you're doing sales out of state you're not sure where to get set up and what you're supposed to be doing sometimes with a complicated situation you may want to consult with an attorney one resource i'm not affiliated with them in any way but i just like them they're called avo and what you can do there is you can put an llc in texas so this would be kind of your second method that you can take if you're setting up an llc in texas and what i would recommend is skip past the ads right and then go down to the people that are just organically listed here what you'll find is you'll see reviews and you'll also see their avo rating so you know based on those reviews you get somebody with a good review a good rating and then let's say you click on them you can also see all right llcs represent 12 of his uh total business and he also focuses on business and estate planning so you want somebody that that's what they do they're in the state of texas and they can consult with you some of these people you'll find on here also do offer a free consultation kind of depends from attorney to attorney but if you click around you may find that some of them offer a free consultation now this route though if you go with hiring an attorney to set up your llc you could be looking anywhere from a thousand to three thousand dollars once you actually go through the process but it's highly recommended if you have a complex situation i'm not an attorney or cpa i did consult with several different ones for setting up my own llc and what i can tell you is if you have a complex situation consult with an attorney all right so a third potential method that you can go is through a service like ink file if you're not familiar ink file is very much like legalzoom or zen business or rocket lawyer if you're familiar with all these services the one way the ink file kind of deviates from those services is the fact that they charge you zero dollars in the first year literally if you get set up with the service they will make no money off of you for the first year and they have a very clean interface and it's very easy to follow on how to set up your business so in this particular case let's say you're setting up the llc and your state of formation is texas what you'll see here is in their silver package is that you pay that state fee it's 300 but your package fee is zero that's if you stay with the silver package but what i want to highlight here is the free registered agent service for a year this is really important so going back to the cost of what it is for setting up an llc in texas what i have highlighted here is that 300 state filing fee ongoing llc fees are zero if you're curious this link will take you to a website called nolo that explains that in further detail why you don't have any kind of fees going forward um but uh you'll also see that there is a registered agent fee of 119 now if you go back to the ink file page here you can see that it's a free registered agent service for a year but year two year three it's 119 now you might be wondering like what is a registered agent fee this ink file service tons of great resources in here and they have about registered agents a lot of information you can absorb here if you scroll down to this section right here you'll see that this is where it's 119 after your first year is free but really what a registered agent is doing for your llc is it's making it a legit entity because it is required that you have a registered agent on file and typically that registered agent is a third party that accepts legal documents also lets you know if you need to renew with the state if there's any important updates or anything that you need to do that's very important for your business now in the unfortunate situation if you were sued by an outside party what would happen is that attorney would actually send the document to your registered agent which would then give you that legal document letting you know that you're being sued and what you need to do next and that's why it's very important to have a registered agent set up in fact if you do not have a registered agent for your llc it could be found that your llc is not legit now why is that important at the beginning of this video i talked about piercing the corporate veil now some people get llc's a little bit confused they think they may be setting it up for tax reasons really when you're setting up an llc you're just doing it to limit your liability now what the llc does is it helps create a divide between your personal assets and your business assets so then in the unfortunate situation where you are sued in your business they can't go after your personal assets such as your home your car and your personal bank account now the important thing to understand is that if you're sued the attorney that is doing the suing is going to look for cracks in your llc what they're going to do is try to pierce the corporate veil one way they may do that is to see if you actually have a registered agent on file is

Thanks OleottiY your participation is very much appreciated
- Dario Greenough

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