questions checklist to ask an attorney when forming an llc in texas

Questions for a preexisting business (if the LLC is being formed to carry on an existing business): (a) Are the properties of such business to be transferred in kind to the LLC? (b) Are all its licenses, insurance policies, certificates of ownership, etc. to be assigned to the new LLC?

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How do I form an LLP in Texas?

Creating a Texas LLC formation checklist can make the process of forming your new business a little easier. You must register with the Secretary of State office in Texas, fill out specific forms, and pay the required filing fees. However, the process is …

Can I form a nonprofit LLC in Texas?

LLC Name; Assumed Names. In forming a Texas LLC, one of the first things to consider is a company name, including whether or not it is available. The easy names tend to be taken, so one may need to be creative. Name information is available by …

Which state should I choose to form my LLC?

Nov 09, 2020 · 7 Questions to Ask Your Attorney Before Starting a Business. Meeting with a small business attorney is an important way to get your business off to a good start and minimize future risks. Here are questions to ask at your first meeting. ... Here’s a step-by-step guide to forming an LLC.

How do I choose the right name for my LLC?

Nov 16, 2020 · Updated November 16, 2020: An LLC checklist is a list of tasks that need to be completed when forming a limited liability company (LLC).. Business Startup Checklist. When you have decided to start your own business, either solo or with a partner or several, you'll want to be sure to follow a checklist, so you don't miss any important details.

What questions should I ask a LLC?

Five Questions to Ask Before Forming an LLCIn What State Should I Form My LLC? A variety of factors can determine the state in which you decide to form your LLC. ... What Will I Name My Company? ... Do I Have Investors? ... Who Will Own and Manage the Company? ... Do I Have an Accountant or Tax Lawyer?

Do I need a lawyer to start an LLC?

There is no legal requirement to hire an attorney to form an LLC. Most states allow LLC formation by registering the business entity on your secretary of state's website and with the Internal Revenue Service (IRS).Aug 13, 2021

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

The Texas Secretary of State charges a $300 filing fee, plus an additional state-mandated 2.7% convenience fee to file an LLC Certificate of Formation. It will cost $40 to file a name reservation application, if you wish to reserve your LLC name prior to filing the Certificate of Formation.

How do you set up an LLC in Texas yourself?

To start a Texas LLC, you'll need to file the Certificate of Formation with the Texas Secretary of State, with a filing fee of $300....Starting an LLC in Texas is EasyName Your Texas LLC. ... Choose a Registered Agent in Texas. ... File The Texas LLC Certificate of Formation. ... Create a Texas LLC Operating Agreement.More items...•5 days ago

How do I add a manager to my LLC?

Follow these steps for a smooth process when you add an owner to an LLC.Understand the Consequences. ... Review Your Operating Agreement. ... Decide on the Specifics. ... Prepare and Vote on an Amendment to Add Owner to LLC. ... Amend the Articles of Organization (if Necessary) ... File any Required Tax Forms.

What is the difference between an authorized member and a manager in an LLC?

What is the difference between a "member" and a "manager" of an LLC? A member is an owner of the LLC and is similar to a stockholder of a corporation. A manager is a person chosen by the members to manage the LLC and is similar to a director of a corporation. A manager can also be a member.May 18, 2021

How much is a EIN 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.

Do I have to renew my LLC Every year in Texas?

Unlike most states, Texas does not require LLCs to file annual reports with the Secretary of State. However, LLCs must file annual franchise tax reports (see below).

Do I need a business license if I have an LLC?

In most states, forming an LLC doesn't require a business license, but you'll need to follow your state's procedures. An LLC requires registering with the state and filing the appropriate forms. But even though you don't need a business license to form an LLC, you probably need one to operate the LLC as a business.Sep 27, 2021

How long does it take to start an LLC in Texas?

It typically takes around 5-7 business days to form an LLC in Texas. However, the process can be longer or shorter depending on a variety of factors.Jan 11, 2022

How long does LLC last in Texas?

The registration of an out-of-state LLP to transact business in Texas lasts one year, but may be renewed before it expires for an additional one year term.

What is better LLC or sole proprietorship?

One of the key benefits of an LLC versus the sole proprietorship is that a member's liability is limited to the amount of their investment in the LLC. Therefore, a member is not personally liable for the debts of the LLC. ... If you treat the LLC the way you would a sole proprietorship, you lose the liability protections.Jul 21, 2021

What rights do members have to transfer their interests in an LLC?

On the other hand, under a more “corporate” model, the LLC and/or the other members may have only “rights of first refusal” (rights to match third party offers) with regard to transfers. If a consent requirement is not desirable but a right of first refusal is insufficient, members may provide each other with “co-sale rights” in addition to rights of first refusal. Co-sale rights would allow the other members to participate in a sale negotiated by the transferring member. 1 Majority members might also want the right to require minority members to participate in exit transactions. In any event, will certain types of transfers (e.g., intra-family or intra-affiliate transfers) be exempt from transfer restrictions?#N#16. Under what circumstances, if any (e.g., death, disability, expulsion, bankruptcy, termination of service or, in the case of a member that is itself an entity, change of control), will the LLC and/or the other members have the right or obligation to buy out a member? If there will be buy-out rights, how will the price be established, funded and paid?#N#17. To avoid deadlock, should there be a provision permitting a member (or group of members) to initiate a process as a result of which that member (or group of members) will either buy out, or sell out to, the other member (s)? In such a process, the determination of who will buy and who will sell is usually made by the non-initiating member (s). The price is usually determined by the initiating member (s) or by some valuation procedure.#N#18. Will all the members have the same rights to participate in buy/sell transactions (or will some members have greater or lesser rights than other members)?

How will an LLC be managed?

10. How will the LLC be managed? LLCs may be managed by their members (like general partnerships) or by one or more managers appointed by their members (either expressly in the operating agreement or by some voting or approval process). If a corporate model is preferable, LLCs may be managed by boards of managers that function like corporate boards of directors. If the LLC will have a board that functions like a corporate board of directors, how many people will be on the board, and how will those people be selected?#N#11. If an LLC has managers, the day to day affairs of the LLC may be managed by the managers or, if a corporate model is preferable, by officers appointed (usually) by the managers. If the LLC will have managers, will it also have officers? If so, what authority will the officers have?#N#12. If the LLC will have managers, what, if any, actions (e.g., issuances of additional interests, mergers, significant asset sales, significant capital expenditures, borrowings) will be subject to the approval of the members? Will particular members have special approval rights? Will particular actions require higher levels of approval than other actions?

When does an LLC dissolve?

Generally, an LLC dissolves if it becomes bankrupt, if a court orders its dissolution or if it has fewer than the number of members that it must have to continue under state law. In addition, the LLC should dissolve by the vote of the managers and/or some quantum of the members. 20.

What is a registered agent in Texas?

A registered agent is an individual Texas resident or a domestic entity, or a foreign entity that has qualified or registered to transact business in Texas who is responsible for receiving and forwarding service of process or official notices addressed to an entity.

How many directors are needed for a nonprofit in Texas?

In the case of a nonprofit corporation, the Texas Business Organizations Code requires a nonprofit corporation to have at least three directors, one president, and one secretary; however, in a nonprofit corporation, the same person cannot be both the president and secretary.

Does Texas require a seal?

Texas law does not require a business to have a seal; therefore the secretary of state does not have information or regulations on how to design a seal or where to obtain one. Seals, stock certificates, and minute books can be purchased from book stores, office supply stores, or corporate service companies.

Do you have to file a document with the Secretary of State?

You do not have to file a document with the secretary of state when selling or issuing shares or ownership interests in your entity. The offer for sale or sale of shares or ownership interests is regulated under state and federal securities laws. For information on whether a filing is required under Texas or federal securities laws, contact the Texas State Securities Board and the Securities and Exchange Commission.

Is a Texas LLC a nonprofit?

A Texas LLC that states a nonprofit purpose remains an LLC, as that term is defined in section 1.002 (46). It is subject to the regular LLC fees, and it is governed by the regular LLC provisions (§§101.001 et seq.).

Do you need an assumed name certificate for an LLC?

Yes. If each or any series of the LLC conducts business under a name other than the name of the LLC, the LLC must file an assumed name certificate for the name of the series in compliance with chapter 71 of the Texas Business & Commerce Code. [See HB 1624, effective 9/01/13]. See Form 503 ( Word, PDF ).

Is a partnership subject to franchise tax?

Currently, some partnerships are subject to franchise tax. If a partnership is not otherwise subject to franchise tax, registering the partnership as an LLP will subject the partnership to franchise tax. For more information, contact the Texas Comptroller of Public Accounts and/or your private attorney.

What is series LLC?

The series LLC allows an investor to hold assets and liabilities within separate compartments or series which effectively operate as sub-companies. It shares characteristics with the traditional Texas LLC, including the benefit of informal management, an effective liability shield, and pass-through taxation; but the series format also adds the unique ability to segregate assets and insulate them from liabilities arising from other assets within the same company.

Can you transfer a homestead to an LLC in Texas?

Any and all investment property acquired or currently held in a personal name should be moved into the LLC by means of general or special warranty deed without delay. It is not necessary or advisable to transfer a Texas homestead into an LLC since the homestead is already protected by the Property Code and Texas Constitution. Keep in mind the general rule: personal and homestead-exempt assets should be kept separate from investment assets, and an LLC is a good mechanism for doing this.

What is a certificate of formation in Texas?

The certificate of formation must state which type of management will occur. Texas requires that the managers and officers of a company (“governing persons” in Texas terminology) be a matter of public record, both in the COF and for purposes of annual reporting (in the Comptroller’s public information report).

Why is LLC important?

Forming an LLC is an important step. Asset protection is like a cross-country horse race: the more fences a plaintiff and his attorney have to jump, and the more effort and money they have to spend in order to get to you personally, the better protected you are.

What is the difference between a general partnership and an LLC?

Another difference from a general partnership is that LLC members do not actually have a direct ownership interest in the company’s property.

How often should a company meet?

The members should meet at least once a year. The first meeting of members (also called the organizational meeting) should include approval of the details of the certificate of formation and the company agreement. Annual meetings in successive years should review and ratify the preceding year’s actions, recognize unusual events or circumstances, and elect new managers. It is also a good idea to hold special meetings to approve major decisions, the purchase or sale of real property, a loan to the company, or acceptance of new members and the associated realignment of percentage interests.

Is it illegal to have an LLC?

Failing to do this is a common mistake of novice investors. Running business income and expenses through one’s personal account may not be illegal, but it can complicate your defense if you are sued.

Why is it important to meet with a small business attorney?

Meeting with a small business attorney is an important way to get your business off to a good start and minimize future risks. Here are questions to ask at your first meeting. New entrepreneurs have their hands full, making plans, developing products and services, and lining up financing.

What does a business lawyer do?

A business lawyer can explain how to start a business and answer your business law questions. But more importantly, a lawyer can identify the risks you face and help you minimize them. When you meet with your lawyer for the first time, it’s a good idea to have some questions in mind.

How does a contract protect a business?

Contracts protect your business by describing the rights and responsibilities of the parties to the agreement. A well-written contract can reduce the number of disputes that arise, ensure that you get paid for the work you do, and provide a clear remedy if one party doesn’t hold up its end of the deal.

Do small businesses have trademarks?

All small businesses potentially have trademarks that they use to identify the business and distinguish it from others. Your business name, logo, labels, slogans, and packaging can all be trademarks, but you must take steps to protect them. You may decide to register a trademark with the U.S. Patent and Trademark Office.

What to do before starting a small business?

Before starting a small business, you must decide how your business will be structured. If you do not form a formal business entity, your business will either be a sole proprietorship (with one owner) or a general partnership (with more than one owner). Legally, you and your business will be the same “person,” so if your business has debts ...

How to start a business off on the right foot?

Always ask your business attorney to assess your risks and identify ways to alleviate them. Getting business advice and legal help from a small business lawyer is a smart way to start a business off on the right foot. But don’t lose touch with your lawyer once your business is up and running. Make it a habit to seek business legal advice regularly ...

Do I need a patent lawyer?

And if you have an invention, you may need to apply for a patent. A business lawyer can help identify your intellectual property, advise you on protecting it, and assist with copyright or trademark registration. For patents, you will need a patent lawyer. 6.

What are the different types of business?

There are four different types of businesses when it comes to legal structure: Sole proprietorship. Partnership. Limited liability company (LLC) Corporation (C-corp or S-corp)

What is the FEIN number?

Before you can open a company bank account, apply for any business loans, or begin a payroll, you'll need to get an FEIN (Federal Employer Identification Number) through the IRS (Internal Revenue Service).

What is a commercial realtor?

Commercial realtors are a great resource when searching for company space. They can help make sure you'll have everything you need in place for day one of doing business. Another very important part of a startup is making sure you have all the proper licenses and permits for the type of business you plan to run.

What is a broadcasting company?

A company involved in broadcasting. Any company providing ground transportation. Any company planning to sell alcohol, tobacco or firearms. If your business doesn't require a federal permit or license, it might still require one from the state.

How to manage an LLC?

Management of the LLC can take many different forms, particularly if there are multiple members are investors. Generally, management of an LLC will fall into one of the following categories: 1 You are the sole member, with no investor, and you fully manage the company. 2 The LLC has multiple members (possibly including an investor), but all the members agree that one person manages the company. 3 The LLC has multiple members (possibly including an investor), all the members agree that one person manages the company, but that person needs their consent before taking certain actions that are outside the ordinary course of business (for example, borrowing money, selling the company, declaring bankruptcy, and the like). 4 The LLC has multiple members (possibly including an investor), and all the members agree to manage the company together, perhaps by forming a board of managers (which is similar to the board of directors of a corporation).

Why do companies use fictitious names?

Fictitious names can be very useful if you want to vary your business' name by geographic location, or assign different names to separate divisions within the company. This allows you to avoid having to formally create new subsidiaries.

What are the advantages of an LLC?

One of the attractive characteristics of an LLC is the potential pass-through tax treatment. Having an accountant or tax attorney advise you during and after the LLC formation process will allow you to best take advantage of this benefit.

Can an LLC have multiple members?

The LLC has multiple members (possibly including an investor), all the members agree that one person manages the company, but that person needs their consent before taking certain actions that are outside the ordinary course of business (for example, borrowing money, selling the company, declaring bankruptcy, and the like).

What can a tax adviser do?

Your tax adviser can also guide you on how to make and record periodic cash distributions to members, if applicable.

Contributions and Capital

• 1. What contributions of cash, property or services will each of the owners (who are called “members”) make to the LLC? 2. Will there be any required contributions after the initial ones (e.g., to fund working capital needs)? If so, what penalties will apply if a member fails to make a required contribution when due? 3. Under what circumstances, if any, may the LLC issue additio…

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Distributions

Governance

Transfers of Interests; Buy/Sell

Termination/Conversion

Before Formation

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Name Issues

After Formation

“Nonprofit” LLCs

Series LLCs

Limited Liability Partnerships

Social Purposes

Public Benefit Corporations