The Texas Limited Liability Company Act came into law in 1993 and allowed the formation of a new type of business entity. It was an LLC that could be organized under the Act to conduct any lawful business in the state of Texas, just like a corporation.
The Texas LLC has been around for more than 20 years, and it’s one of the most popular forms of doing business in this state today.
What Are Articles of Organization?
The Texas Articles of Organization are the articles of association for a Limited Liability Company (LLC). They provide information regarding your company, its management, and how it’s organized. In short, they outline what your LLC is all about.
Why Do You Need Articles of Organization for an LLC?
In order to open bank accounts, register with state agencies, and set up contracts as a limited liability company in the State of Texas, you need to file Articles of Organization. It’s mandatory to have these documents filed first so that everything can be done right from the start.
Without them, you cannot conduct business as a limited liability company in Texas. The forms must be properly completed and submitted before any other filings can be made. The filing fee for Articles of Organization is $300.
Who Can File Them?
- Articles of Organization are filed by the organizer, which means that only one person can sign them. If there are two or more organizers, then all should sign the Articles of Organization form.
- A manager or an authorized member can also file articles of organization provided he/she is at least 18 years old and a resident of Texas.
- If none of these roles apply to your company’s organizational structure, you’ll need to file the articles yourself as an Organizer-Manager.
- The forms must be completed by hand or typed into a computer program before they can be submitted for filing with the Secretary of State.
Once they’re filed, companies will receive their original copies along with two certified copies, which must be kept on file with the company at all times.
Requirements for Articles of Organization
There are no special requirements for Articles of Organization. They should include the following information:
- Company’s Name
- The name and address of an Organizer (Manager) who can be either an individual or a legal entity, such as another corporation. If the other entity is another LLC, it must first give consent by signing an Authorization to File Incorporation located on the forms.
- Addresses where official notifications can be sent (Physical Address, Mailing Address). If different, make sure you specify which one will be used for legal purposes.
- City, county, and state where the company is registered to do business. If you plan to register your business in multiple states after formation, make sure that each state has its own separate LLC. You cannot use the same operating agreement for multiple LLCs in different states because each has its own requirements and laws regulating it.
- Name of the registered agent (manager) if not filing by an organizer. This role can be fulfilled by another individual or even a business entity, such as a corporation or another LLC. Only one person or company should not be responsible for receiving legal papers on behalf of your LLC.
- Address where legal documents should be sent if they need to be served on your company. If the company is represented by an attorney, he/she should receive any important papers regarding official actions taken within timeframes allowed by law so that your company isn’t at risk of shutting down due to lack of notification or response issued upon receipt of the court summons.
- The business purpose of your company. Be as specific as possible with this section because it will determine if your LLC is taxed as a corporation or partnership/disregarded entity.
- List of Initial Members, which can be part owners of the company or key employees within the structure of an LLC. This must be done only if the articles are filed by an Organizer-Manager who isn’t acting on behalf of another person or business entity. If you have managers, you need to list them here with their full names and titles (i.e., president, secretary).
Operating Agreement where all members should agree before filing Articles of Organization for the formation of a Professional Limited Liability Company in Texas.
This document outlines how your LLC will be run day-to-day, i.e., who is responsible for what tasks within the company, how financials are handled, and how decisions are made by voting rights of each member, if applicable.
It’s vital that you prepare this agreement before filing forms or else it can become invalidated after a period of time unless a subsequent amendment was signed to complete the document. Under Texas LLC laws, there is no mandated form or format required for creating an operating agreement, but it should at least include the following:
- Name and address of registered agent (manager)
- Members’ names and addresses
- Managers’ names and responsibilities
- The state in which your business is registered to do business
- The percentage of capital or profits that each member contributes
- How voting rights are distributed
- Allocation of how membership interests may be bought and sold in the future
- Members’ rights, obligations, and restrictions
There is no filing fee for Articles of Organization. This form should be typed directly onto the official LLC forms. Alternatively, you can write it out by hand, but it must include the same information listed above to avoid any complications with its acceptance by state authorities.
You must sign Articles of Organization before having them notarized, then file them with your county clerk’s office located within your county where you plan to register your company. They will accept payment upon submission of all required documentation so long as you have proof of payment made with a valid method of payment.
Meeting Other Requirements for LLC Formation in Texas
I. Report the name and address of each organizer who is tasked with filing documents on behalf of an LLC. This form should be filed within one year after filing Articles of Organization, but it’s considered fulfilled if you list all organizers’ names from your initial filings.
You will need to update this report when changes occur regarding the members or managers but only do so if a key individual has left or been added to LLC.
II. Annual List of Members must be included within a written report submitted to the state by January 1st each year following up on formation paperwork. If no members have been added or removed since the previous filing, then it isn’t necessary to submit this document until such occurs.
Organizers are still liable for submitting this information under Texas LLC laws. It should include each member’s name as it appears on their articles, as well as the address of the primary residence, email, and telephone number associated with that person or business entity.
If a key individual move to another state, then you must mail the report to that state if they’re registered to do business there. This will help alert officials in charge of regulating LLCs, and it doesn’t matter whether or not an organizer still retains control over membership interest within the company.
III. Details regarding any transfers taking place throughout your company should be reported by filing a Name Reservation Change Report. This also applies if you wish to change your business structure from one LLC type to another, have merged with another organization, or are choosing to dissolve.
You are also required to notify the state if any of these changes occur for legal reasons, but you don’t need to file a Name Reservation Change Report along with your annual list if no changes have occurred.
IV. An amendment must be filed within 30 days after any major change in operations or business structure process Texas Business law. This includes shifts in membership interests that affect voting rights which can further influence decision-making regarding how the company is run.
If this type of change has taken place, then it’s important for all concerned parties to sign off on an amendment acknowledging their involvement within this new arrangement.
V. A Statement of Cancellation needs filed by the organizer upon dissolution so they can release ownership of assets held in the business to the LLC. This allows the remaining members within your company to operate as an unincorporated association, or you can choose to file Articles of Dissolution if you no longer want to maintain your LLC structure.
Both forms should follow the same filing guidelines as Articles of Organization, and there is a $300 dissolution fee payable upon submission so long as there are no outstanding debts owed by the business.
VI. The organizer needs proof that any certificates, licenses, permits, or registrations related to their business have been surrendered before filing for dissolution under Texas LLC laws. Certificates should be given directly to representatives at companies that issued them, while licenses must be turned over gradually since they’re required for specific timeframes throughout operations.
You will also need documentation regarding taxes paid in order to submit your final Statement of Cancellation along with any applicable forms you need to be completed for exemption from the responsibility of back taxes.
VII. Dissolution can also be caused by the sale or transfer of assets which are no longer needed within the business’ operations, which under Texas LLC laws is referred to as an assignment.
This generally occurs when a key company member leaves the organization, but it’s important to make sure that each individual involved with this type of transaction has plenty of time to prepare before submitting reports on behalf of your LLC.
The person who purchases these assets can choose not to dissolve the company if they wish, but they will face the same responsibilities and liabilities even if they don’t retain ownership over any membership interests.
VIII. WhenLLCs are dissolved, their owners surrender ownership of assets and must report any outstanding profits or losses on tax forms issued by the IRS. This also applies to businesses that have been assigned under Texas LLC laws because they still retain responsibility for disclosing revenue earned even after a change in management involving a new owner.
IX. If you want to make any changes to your Articles of Organization document, then it’s important to update those that apply to new business structures as well as reorganizations throughout the year since no amendments need to be filed for these changes under Texas LLC law.
In all other cases, an amendment is required if there has been a major shift regarding how decisions are made within the company, as authorized members aren’t allowed to approve such changes without submitting an official form.
Do I need LLC Articles of Organization?
You need to file for Articles of Organization when you are starting a new LLC in Texas. The form is filed with the Secretary of State’s office and must include information on a business name, mail address, registered agents, the company’s purpose, location, and effective date. You can get assistance from a business filing service that will complete your paperwork based on the details you provide.
Are LLC Articles of Organization the same as a Certificate of Formation?
No. LLC Articles of Organization is the form you file with the Texas Secretary of State’s office to get your business started. A Certificate of Formation is a document filed by a new or existing LLC with the Texas Franchise Tax and not with the Secretary of State. The Certificate of Formation in Texas includes information on:
- Name and registered office location for your company
- Mailing address (if different from the registered office) and county in which you want to do business
- Federal Employer Identification Number (EIN), if applicable
- Company purpose
The certificate must be signed by authorized companies, and it must include an effective date. The certificate is valid for two years.
What’s the difference between LLC Articles of Organization and Operating Agreement?
An LLC operating agreement is a document that includes the company’s rules and regulations. It details how each member will contribute to business decisions, and it also specifies things like profit distribution, management structure, allocation of authority, and any other important terms that affect your LLC.
A Texas Articles of Organization form only declares the legal name of the LLC, its registered agent address in Texas, and optionally an effective date if you want to start your business before signing a formal operating agreement. The articles do not list members or management information for your business.
All owners must sign an operating agreement to officially apply these rules when they declare their membership interest with the Secretary of State in Texas. Operating agreements are private contracts between owners, but they’re not filed with the state.
What’s the difference between Articles of Organization and Articles of Incorporation?
Articles of Incorporation form is what you file with the Secretary of State to create a business corporation instead of an LLC. These documents contain company formation information, such as:
- The name of the business
- Registered agent address for service in Texas
- The type of corporate structure, which includes whether it’s stock or non-stock corporation
An Articles of Incorporation does not involve any kind of management structure or details on how profits are distributed.
It simply establishes your company under state law. Your shareholders will also need to draft and sign bylaws that regulate these items.
How to get Articles of Organization?
1. Select your industry:
You have to choose an industry from the list of six business classifications:
- Transportation and warehousing
- Professional, scientific and technical services (applies only to creative professionals such as architects, engineers, lawyers, and accountants)
2. State the professional service you provide (if applicable)
If you’re not providing a professional service, leave this field blank. If you are, select one of the four options:
- Architecture and engineering
- Legal professional services
- Doctor, dentist, veterinarian. Or select “Other” and enter an appropriate description in the space provided.
3. Provide your company’s name, address, and contact information
- Name: Your business’ name must be unique. You cannot use the same name as another corporation in Texas unless you’re an existing company
- Registered office location: This is where your registered agent will accept official documents for your business
- Mailing address (if different from the registered office): You can give a P.O. Box or specific street address here
- Contact person: List either yourself or one of your managers with their full legal name and title
- Phone number: Provide at least one phone number where we can reach you with any questions
- Email: Provide an email that we can also use to contact you directly
4. Hire a registered agent
If you don’t hire an agent, the Secretary of State is automatically listed as your registered agent. Try to choose one that represents more than just LLCs or corporations to avoid potential conflicts of interest.
We recommend that you hire an independent registered agent, but if you’re only registering one company, it’s not necessary.
5. Provide the registered office address
Texas is the only state in the United States, which requires you to register your agent’s address or pay an additional fee.
6. Decide who will have governing authority (if applicable)
Only an LLC in Texas can have members. Corporations are managed by directors, who make the company’s day-to-day decisions.
- President: This person is typically located in your home state
- Vice President: This is the second in command
- Secretary: The primary contact for official filings and paperwork
- Treasurer: Responsible for all financial transactions, including payroll and tax collection. You can choose one person to serve all three positions or separate them out among different people.
7. State the services you will provide and whether or not you will offer those services to the public
If you’re a nonprofit organization, state so here and provide your tax-exempt number
8. State the duration of the LLC.
This is different from how long the company will exist. In Texas, you can choose a set a date for your company to end or let it continue indefinitely.
For other states, this process is similar but not always required. The perpetual option means that your business continues until someone’s death, bankruptcy, or other specified event causes the business to dissolve.
9. Describe any supplemental provisions you would like
You can include up to three additional provisions. An LLC in Texas cannot have a non-disclosure agreement or sign a contract, but you can state how disputes will be resolved through an alternative dispute resolution process, such as mediation or arbitration
10. Choose an organizer
This person will play a key role in the development and management of your business.
- Organization: All organizers must be at least 18 years old and mentally capable. They can’t be listed as part of any pending criminal case or bankruptcies and cannot have been convicted of bad checks or fraudulent activity within the past five years. You can’t use an LLC to start a new business if it currently exists – separate paperwork is required for that.
How do I file Articles of Organization?
You’ll need to file the document in person:
- Fill out and sign your Articles of Organization
- Submit all forms and fees (see below) with a $70 filing fee, which you can pay by cash, money order, or check
- Provide a copy of your completed Supplemental Provisions statement (if applicable) – we recommend bringing two copies in case one gets misplaced.
- Copyright stamp it with the Secretary of State at their copyright office for an additional $5 per page ($10 total)
Altogether, that’s $110 for articles of organization used only to register a new LLC business in Texas! The filing period is 20 days from the date of submission, so you have until 10/20 to file.
If you have a tax ID number from the Internal Revenue Service, fill out Form 304 instead of Form 205. The state charges a $25 filing fee for this form, and it takes less than one week to process. You can call the Secretary of State at 512-463-5555 for more information on these supplemental provisions.
Remember: This is not an exhaustive list – please check your local Secretary of State website before filing forms to be sure you’re completing all necessary tasks!
How do I change my articles of organization?
The requirements for filing an amendment to your articles of organization or a restated articles of organization will depend on where you filed the documents originally.
If you filed them in Texas, follow these steps:
- Fill out the Amended and Restated Articles form (Form 205-2) – make sure to include all necessary information such as current members and their contact information, new services being offered, etc. Use the first copy to record changes on all old forms submitted prior to this amendment
- Submit your completed form along with any applicable fees
- Also, send a letter explaining what’s being amended about your company
- Copyright stamp it at our office for $5 per page ($10 total) if you filed it in-person or at the Texas Secretary of State for $10 if you mailed it.
After filing, you must publish notice about your amendment to the LLC in a local newspaper. When filing online, you can choose this option for an extra fee.
If you filed your documents outside the state of Texas, contact that Secretary of State’s office to determine what steps are necessary to complete this process – they’ll be able to walk you through the relevant policies and fees associated with amending your company’s status there.
You may need to file multiple forms depending on where and when you initially registered the LLC business.
How to Order a Certified Copy of Articles of Organization or a Certified Copy of Articles of Incorporation From the State of Texas
It’s easy to order certified copies of your LLCs original articles of organization or a certified copy of its most recently amended version from the Secretary of State in Texas.
- Fill out the form, including your name and address, on all types of requests.
- Write a check for $15 payable to the Secretary of State – this is only charged if you request a photocopy, not if you use an online service for media mail.
- Include a self-addressed envelope with postage already paid for this purpose
- You can either fax or send these items through USPS media mail to the state office, which will process your documents – make sure to include “OFFICE OF THE SECRETARY OF STATE” as well as the appropriate filing number on your fax or mail request.
- You should receive your certified copy in 4-10 business days.
How much does it cost to obtain a certified copy of Texas Articles of Incorporation or Texas Articles of Organization?
When you order a certified copy of your company’s original articles of incorporation or most recent amendment from the Secretary of State, it costs $15.
You can’t acquire copies for less than $1 each if they’re requested by mail and $20 if they need to be picked up in person.
Is expedited processing available?
The state of Texas can expedite your request for a certified copy of articles of organization or amendment using overnight delivery.
It’s $30, and you must pay in advance unless you’re already paying for expedited processing when requesting the copies.
You can pay for copies of articles of organization or amendment to your company in Texas by cashier’s check, money order, personal check, company check, credit card, debit card, or wire transfer.
You must ensure to enclose return postage-paid envelope when it’s requested through the mail and to include the additional $30 when requesting expedited processing.
How to File Articles of Incorporation for a Profit Corporation?
Texas profit corporation articles of incorporation are formed by filing the Amended and Restated Articles of Incorporation form (Form 205-2) with the Secretary of State.
How to Elect S-Corporation Status with the State of Texas?
A corporation must file an S-Election with the Secretary of State within two and a half months after it’s formed or before February 15th if filing for an existing company.
The form to elect S Corporation status is Form 204s-1.
How Do I Cancel My Texas LLC Formation?
To cancel formation, you need to file a Cancellation of articles. If filed before the filing deadline, it’s effective as of the date of filing.
If you file after the deadline, it’s effective as of January 1st following the billing cycle in which you made your request.
Register for Federal Taxes, State Taxes, & Licenses/Permits
All companies established in Texas must be registered for tax purposes, including federal and state taxes.
The Texas Tax ID application (Form 01-CTCE) must be filed with the state comptroller, and your tax identification number will be granted after the completion of the registration process.
You may also need to register for business licenses or permits, depending on your business activities.
Sole proprietors, general partnerships, or single-member LLCs are not required to charge sales tax in Texas.
If your business does have taxable transactions, you must register with the state comptroller’s office to collect sales taxes. Y
ou can start collecting sales taxes after your registration is approved by the State Comptroller no later than 30 days after you file.
Texas Annual Franchise Tax & Estimated Taxes
All businesses in Texas are subject to an annual franchise tax, which is due every year before December 1st.
Your company may owe quarterly estimated payments if it’s expected to owe $1,000 for any of the three months and $4,800 during a full year (or $2,400 if you’ve elected S Corporation status).
Texas licenses and permits are required for businesses engaging in various activities, including but not limited to construction services, passenger transportation, social work, child care, insurance agencies, and real estate.
- Licenses are issued by the Texas State Board of Plumbing Examiners or other state boards, depending on business activity.
- You can check each board’s website for detailed information about the application process.
- Businesses with employees must register with both federal and state agencies related to employment. This includes registering with the Texas Workforce Commission (TWC) if you have any full-time or part-time employees working in Texas.
- You will need Form TWC-11 for this purpose if your company has more than 3 full-time employees who earn at least $1,500 in a quarter or 3 part-time employees working at least 36 hours per week.
- You can also hire independent contractors to work for your business, but they must file Form 433 (Request for Miscellaneous Determination) with the Internal Revenue Service (IRS).
Do I Need an EIN Number?
If you’re required to register your company for tax purposes in Texas, it’s most likely that you will need an Employer Identification Number (EIN).
An EIN is issued by the IRS and allows you to report wages paid to employees on your annual tax return (Form 941) along with salaries and other withholdings. This number is different from your federal Tax ID, which should always be used when completing forms filed with the IRS.
Can I Get a Federal Tax ID Number Online?
You do not need to wait for an SS4 form or request letter if you want to apply for your federal EIN online.
While filing online is faster, it’s only available to corporations and limited liability companies (LLCs) formed in Delaware, Massachusetts, Nevada, South Dakota, and Wyoming.
All other entities must apply by mail using Form SS-4, which can be downloaded from this website. You can apply for an EIN either by mail or fax once you’ve completed the application process.
If applying by mail, send complete documents along with a check made payable to “The United States Treasury” on Form SS-4.
Texas Business Organizations Code section 22.05 requires that you file an annual report between January 1st and April 30th of every year if your company is older than two years old or has $1,000 in assets at any time during the last fiscal year.
The filing fee for an Annual Report varies depending on your entity type: general partnerships or single-member LLCs are charged $15, corporations pay $25, and other business associations pay up to $40.
So, the abovementioned article has tried to explain the importance and need of filing articles of organization or amendment for a Texas LLC.
As per the rules, it is mandatory to file such documents within 20 days from the formation date so that your company’s legal status and name can be registered with the Secretary of State and other authorities concerned.
It also affects your tax de-registration process (IRS), which will take place only after proper registration by applicable authorities.