Starting a single-member limited liability company (SMLLC) in Texas is an excellent way for business owners to limit their personal liability and protect their assets. If you own 100% of the company and are its only member, forming an SMLLC can provide you with many legal benefits. Here’s how you can start an SMLLC in Texas.
There are 3 options for filing your LLC: DIY, online service like Drafted Legal, or an attorney. We will dive into the pros and cons of each:
Option 1: DIY
If you’d like to take the DIY route and form your own single-member LLC in Texas, here are the steps to follow.
Give Your Single-member LLC a Name
Your Texas SMLLC must include any of the following phrases or abbreviations in its name:
- Limited Liability Company
- Limited Company
- Ltd. Co.
Your SMLCC’s brand name must be distinguishable from other pre-existing Texas limited liability companies registered or reserved on the Texas Secretary of State (SOS) records. Be sure to check for the availability of your chosen LLC name before filing for registration or reservation.
Get a Certificate of Formation
To create a Texas SMLLC, file for a Certificate of Formation with the SOS and provide the following information:
- The SMLLC’s name
- The registered agent’s name and address
- Whether the SMLLC is member-managed or manager-managed
- Names and addresses of members or managers
- The organizer’s name and address
All Texas SMLLCs must appoint a registered agent to accept the service of the process. This can be an individual residing in Texas or a business entity authorized to do business in the state.
Draft Your Operating Agreement
Creating an Operating Agreement will help you set up the rules for managing your SMLLC. This document may include information about ownership, duties and responsibilities of members, the SMLLC’s management structure, the procedure for admitting new members, the resolution of disputes among members, and more. An Operating Agreement is not legally required in Texas, but having one is essential to structure your SMLLC the way you want.
Get the Necessary Business Licenses
You may need to obtain licenses or permits required for running your SMLLC in Texas. Depending on the business type, it could include a federal Employer Identification Number (EIN), Texas Comptroller of Public Accounts (CPA) registration, state sales tax permit, health department license, or other local or state licenses. You might also need licenses related to your profession, products or services, your business’ fictitious name, or health and safety regulations.
Option 2: Drafted Legal (recommended)
Aside from the DIY route, you can also obtain the services of Drafted Legal, a comprehensive legal documentation platform, to form your SMLLC in Texas. Drafted Legal’s service includes the paperwork for creating an SMLLC and an operating agreement along with instructional videos with important information (from practicing attorney Wesley Henderson).
With Drafted Legal, you can rest assured that your SMLLC will be formed correctly without any hassle. You’ll save money by not hiring a lawyer for the same service and time by not having to research the legal and administrative processes involved.
Option 3: Expensive Attorney
If you’d rather have a lawyer prepare and file the necessary paperwork on your behalf, you’ll need to find an experienced attorney specializing in business formation. An experienced business attorney can provide invaluable advice and services for setting up a single-member LLC in Texas. However, this service is typically the most expensive of the three options, and you should be prepared to pay a handsome fee for it.
Jumpstart Your Single-member LLC in Texas Now
Whatever option you choose, forming an SMLLC in Texas can be a great way to protect your personal assets while operating an independent business. You can go for DIY filing if you want to handle the whole process yourself or hire an attorney if you’d rather have an expert handle the paperwork.
Alternatively, Drafted Legal can offer a simple and affordable solution for forming your single-member LLC in Texas. Contact us today to jumpstart your entrepreneurial journey!