How to start your LLC in Waco, TX

Why is the name of your LLC important? For the same reason your own name is: it provides a unique identity and a way that people can set your LLC apart from the rest of the world. Texas law controls what words you can use

First, your Texas LLC name must have one of these exact phrases:

• Limited liability company
• Limited company
• An abbreviation of one of the two phrases above, like LLC, LC, or Ltd. Co.

Second, make sure you’re not using words state law forbids. The Texas Secretary of State has a few rules about words your company can’t use because they might confuse the public or cause other problems. For instance, you can’t suggest that your LLC is a government agency. You also can’t call your LLC a “bank” or “college” unless that’s what it is licensed to be.

Third, after you’ve picked a good name, you need to make sure it’s not already taken. The Secretary of State will let you search all business names in the state, but you need an SOSDirect account to start your own search online. You’ll also need to pay a fee every time you search!

There’s a better, cheaper way to get this done. Just visit the Texas Comptroller’s website and use the Taxable Entity Search. You won’t have to pay for each search, and you can try on different kinds of combinations and names to find the perfect one.

Finally, even after your LLC’s legal name is set you might still want to tweak your company’s name a bit. You might have thought of a shorter or more easy-to-remember name, or you’re trying to separate your company from a closely-named competitor. Either way, you can fix the issue with an assumed name or DBA.

In Waco, that means you must apply for a DBA with McLennan county. We’ll discuss the way to do this below.

What’s a registered agent? It’s a person who is the point of contact between your LLC and the world. Anyone who needs to contact you officially (including the state) will use your agent’s address. Your agent also gets service of process for your LLC, which is a legal term for letters or legal papers that must be delivered to your business.

Note that, while some people use the term “resident agent” and others say “registered agent,” the two terms mean the same thing.

Because you can’t ignore service of process, you must get a good agent who can handle it in a timely and professional way at all times.

You might be tempted to do this job yourself to save some money for your LLC. This isn’t always the best choice, though. You’re giving up a lot of privacy and time to do the job, and if you miss a legal detail, you have only yourself to blame.

That means that, for most people, the best way to go is to use a registered agent service. Their address, not yours, is the one that people see. Their sole job is to make sure you don’t miss anything. That way, you can focus on your business.

Your LLC’s certificate of formation is like its birth certificate. This is what creates your company; until you file it, the LLC just doesn’t exist.

That might sound like a big job, but the truth is that Texas only requires a few basic items of information. The state also gives you a fill-in-the-blank form to make the process as easy as possible.

When you file, you’ll have to pay a $300 filing fee. (Check the state’s fee schedule for all current fees you might need to pay.) In return, you’ll get an acknowledgment that proves your LLC can now do business.

The normal processing time for filed documents is 5-7 business days, though that shortens to 4-5 business days if you file online using the state’s SOSUpload system. You can also pay an extra $25 for expedited processing, meaning that the state will usually process your document by the end of the next business day.

Operating agreements are contracts that have the rules of your LLC. Texas law doesn’t require you to have one, but having one is a good decision. An operating agreement tells you how to admit new business owners, distribute proceeds, and deal with other key events in the life of your company.

If you don’t have your own contract, the law of the state will control what happens to your LLC. You might not like that result, so having an operating agreement is a good way to make sure you have control over your financial future, even when the unexpected happens.

Operating agreements are private contracts, so you don’t have to file them with the state. Once it’s signed, keep the original safe and make plenty of copies. You should be able to use a good operating agreement as a reference while you run your business. Also, if you ever need to make any changes, you can do so without amending or filing any new documents for your LLC.

EINs are numbers assigned by the IRS. They look and function like social security numbers in that they help the IRS keep track of the taxes paid by you and your LLC.

Not every company strictly needs an EIN. You only really need one if your LLC has more than one member, has workers, or is taxed as a C corporation or S corporation. Even if you don’t need one, though, it often makes sense to get an EIN anyway.

Most banks will make your LLC get an EIN to open a bank account. Having an EIN can also make it easier to apply for and get credit for your LLC.

Whatever the reason to get one, you should know it’s not a hard process. The IRS has a detailed website on the topic and allows you to apply online. The entire application will take around five minutes.

You should never pay anyone to do this for you unless it is part of a larger service package.