How To Register With Texas Comptroller

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Germination of Texas Entities FAQs

• Formation of Texas Entities
• Amendments and Corrections
• Name Filings
• Mergers and Conversions
• Terminations and Reinstatements
• Strange or Out-of-State Entities
• Nonprofit Organizations
• Management and Ownership
• Registered Agents
• Home or Property Owners' Assns.
• Business Organizations Lawmaking
• Filing & Other Full general Questions
• SOSDirect
• Trademarks
• Service of Procedure Information

The answers to our Frequently Asked Questions are provided for informational purposes and are non intended to provide legal advice or to substitute for the advice of an attorney. If you have specific legal questions, consult your attorney.

• Before Formation
• Name Bug
• After Germination
• "Nonprofit" LLCs
• Series LLCs
• Limited liability partnerships (LLPs) and limited liability limited partnerships (LLLPs)
• Social Purposes
• Public Benefit Corporations

Before Formation

1. What type of entity should I grade?
2. Can I file a certificate of formation online?
3. How practice I form a minority-owned business?
4. Do you take to be a U.S. citizen or a U.S. resident to incorporate and/or own a corporation in Texas?
5. Can a person younger than 18 be a director, officeholder, or owner of a business entity in Texas?
6. What is a registered agent? What are the agent'south duties? Where may a registered office be located? Tin the Secretarial assistant of State exist the registered amanuensis of a corporation, express liability company, or express partnership?
7. Do I need to publish a find before incorporating a business?
8. What are the differences betwixt a corporation, a limited liability company (LLC), a limited partnership (LP), a express liability partnership (LLP), and a limited liability limited partnership (LLLP)? What are the benefits of forming each of these entity types?
9. Am I required to course a professional entity?
10. Who can course a professional clan?
11. How do I form a "C" corporation, an "S" corporation, or a "501(c)(3)" corporation?
12. What is a close corporation? What are the benefits of forming a shut corporation?
13. Can one person be the sole shareholder, director, and officeholder of a corporation?
14. Does a corporation have to issue stock? What is par value? How do yous determine the par value of the corporation'south stock? Is there a minimum or maximum value for corporate stock?
15. What is the divergence between a fellow member and a manager of an LLC? Which should I choose on my certificate of formation?
16. Are in that location restrictions on who tin be an owner, governing person, or officeholder of a Texas professional entity?

1. What blazon of entity should I form?

   The Part of the Secretary of State cannot help you determine the best entity type for your item business needs. We have provided general data about types of Texas business organization organizations on our Selecting a Business organisation Structure page. For personalized assistance, you should consult your private chaser.

2. Can I file a certificate of formation online?

   Yes. Certificates of formation can be filed online through SOSDirect 24 hours a solar day, 7 days a week.

3. How do I form a minority-owned business?

   For information on certifying a "historically underutilized business," please contact the Texas Comptroller of Public Accounts at (888) 863-5881 or (512) 463-5872. The Texas Business organization Organizations Code does not accost the formation of minority-owned businesses.

4. Do you accept to be a U.S. citizen, U.South. resident, or a Texas resident to grade and/or own a business entity in Texas?

   No. Texas law does not restrict who tin can class or accept an ownership interest in a business entity, other than requiring the organizer to be a person capable of inbound into a contract. An entity may impose residency or citizenship requirements in its certificate of germination or other governing documents, if desired. For information on restrictions that might use to the entity y'all are creating, consult your chaser or the IRS.

5. Can a person younger than 18 exist a managing director, officer, or owner of a business entity in Texas?

   The Texas Business Organizations Lawmaking does not impose whatever historic period requirements on who can be an owner, officer, or director in a business organisation entity. An entity may impose requirements in its certificate of formation or other governing documents, if desired. Other laws might impose restrictions, and there may exist bug related to a minor's capacity to contract or to exist an owner of an entity with a liquor license. For information on restrictions that might utilise to the entity you lot are creating, consult your attorney or the IRS.

6. What is a registered amanuensis? What are the agent'south duties? Where may a registered office exist located? Tin the secretary of country be the registered agent of a corporation, limited liability company, or limited partnership?

   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 procedure or official notices addressed to an entity.  Effective on January 1, 2010, a person who is appointed or designated equally an entity'south registered agent must have consented in a written or electronic form to serve as the registered amanuensis of the entity.

   An entity'south registered office must be a physical address in Texas where the registered agent can be personally served with process during business hours. Information technology cannot solely be the address of a mailbox service or phone answering service.

   The secretary of state cannot serve every bit an entity's registered agent.

   For more than information, please see our Registered Agent FAQs.

7. Practice I need to publish a notice before incorporating a business?

   No. The requirement that an existing unincorporated business organization intending to contain without a change in its proper name publish its intent to incorporate in the local newspaper for four consecutive weeks was repealed in 2003.

8. What are the differences betwixt a corporation, a limited liability company (LLC), a limited partnership (LP), a limited liability partnership (LLP), and a express liability limited partnership (LLLP)? What are the benefits of forming each of these entity types?

   Corporations, LLCs, and LPs are formed by filing a document of germination with the secretary of country. Corporations are endemic by shareholders, managed by a lath of directors, and administered by officers. LLCs are owned by members and managed by members, managers, or both. An LP is a partnership of i or more limited partners and one or more general partners. For more than information, encounter Selecting a Business Structure.

   A limited liability partnership (LLP) is either a pre-existing general partnership or a pre-existing limited partnership (LP) that takes the additional and entirely optional footstep of registering with the secretary of state as an LLP. Tex. Bus. Orgs. Code §§152.801 et seq. and 153.351 et seq. Filing an application for registration of an LLP does not create a partnership or any other entity. Instead, an LLP is merely an optional registration that is made by an underlying, pre-existing partnership.

   Each of these entity structures shields its owners from personal liability for the debts and obligations of the entity and may offer taxation advantages that are not available to sole proprietorships and general partnerships. Each of these entities must also pay Texas franchise taxes.

   The secretary of state cannot make up one's mind which entity would be best for any individual state of affairs. A private attorney tin assist with that determination.

9. Am I required to form a professional entity?

   If you want to organize your entity as a corporation or LLC and you volition be performing professional person services, then y'all may be required to grade equally a professional person entity.  Partnerships are not discipline to the same restrictions on performing professional services.

   The secretary of state has created a guide for determining permissible entity types (PDF). Please note however, that the guide is not a substitute for the advice of a private attorney and is subject to modify without discover at any time.

10. Who can form a professional association?

    Professional associations can only be formed past (ane) doctors of medicine, (2) doctors of osteopathy, (3) podiatrists, (4) mental health professionals (such equally psychologists, family therapists, and licensed professional person counselors),(v) optometrists, (half dozen) therapeutic optometrists, (7) chiropractors, (8) dentists, or (9) veterinarians. BOC § 301.003.

    Subject to the limitations set up forth in BOC § 301.012, every bit amended by H.B. 2098, a licensed doctor assistant may jointly own a professional association with a licensed medico. Sure restrictions, limitations, and reporting requirements apply to such jointly endemic professional associations.  A physician or physician assistant interested in this option is encouraged to consult with a private attorney to ensure that all legal requirements are met.

11. How do I form a "C" corporation, an "S" corporation, or a "501(c)(3)" corporation?

    Filing a certificate of formation with the secretary of state creates a for-profit corporation, professional person corporation, shut corporation, nonprofit corporation, LLC or limited partnership. Designations such as "S," "C," or "501(c)(3)" refer to federal revenue enhancement provisions. For information on federal tax issues, including how they might affect what yous need to include in your certificate of formation, consult a private chaser and/or contact the Internal Revenue Service.

12. What is a close corporation? What are the benefits of forming a close corporation?

    A close corporation is whatsoever domestic for-turn a profit corporation or professional corporation that states in its certificate of formation that "this corporation is a close corporation." The argument tin exist included in a corporation'southward initial certificate of formation, or it can be added later by filing a certificate of amendment. A shut corporation may be managed co-ordinate to a shareholders' understanding instead of by a board of directors or bylaws. Ofttimes, shareholders in close corporations hold to limit the conditions under which shares may be transferred or sold, apportion profits and losses in a specific mode, or set up terms and conditions for share buying or management positions. For more than information, please run across BOC §§ 21.701 et seq.

13. Tin ane person be the sole shareholder, manager, and officer of a corporation?

    Yes. The Texas Business organisation Organizations Code requires that for-profit corporations and professional person corporations accept at least one director, i president, and one secretarial assistant. A single natural person tin be the president, secretary, sole managing director, and sole shareholder.

    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 aforementioned person cannot be both the president and secretary.

    In both for-profit corporations and nonprofit corporations, officers and directors must be natural persons.

14. Does a corporation accept to issue stock? What is par value? How do y'all determine the par value of the corporation'due south stock? Is there a minimum or maximum value for corporate stock?

    A for-turn a profit corporation must event (sell) shares of stock in order to provide the corporation with its ain capital letter, split from its owners' money. Shares of stock sold past the corporation represent proportionate buying interests held past shareholders in the corporation. "Par value" is the minimum amount for which a share may exist sold. There is no minimum or maximum par value that must be assigned; nevertheless, a share cannot have a par value of "goose egg" or ".00." Shares may have "no par value," which means that the lath of directors will assign a value to the stock below which the shares cannot be sold. A certificate of germination must authorize at least one share. The corporation cannot sell more than shares than it is authorized to outcome.

15. What is the departure between a member and a manager of an LLC? Which direction structure should I choose on my certificate of formation?

    A member of an LLC is a person that holds an ownership or membership interest in the LLC. An LLC is always going to take at least one fellow member, simply the affairs of the LLC can exist managed or governed in one of ii ways.

    First, the LLC may exist governed by its members equally a whole. In this situation, every member has direction authorization. An LLC with this type of management structure is often referred to as a member-managed LLC.

    2nd, the LLC may elect to take a split group of managers to manage the affairs of the LLC. The managers of an LLC may or may not as well be members.

    Your certificate of germination has to specify how the LLC volition exist managed. The secretary of state cannot assist y'all in making this decision. If you are unsure of the best management structure for your LLC, y'all may want to consult with your private attorney.

16. Are there restrictions on who can be an owner, governing person, or officer of a Texas professional entity?

    Yes. Depending on the type of professional entity, an possessor or governing person may be a professional individual, or in some cases a professional person system. Only a professional individual may be an officer. See BOC §§301.004, 301.007. The table below shows the BOC restrictions for each type of Texas professional entity. (There may be additional restrictions in the governing documents for a particular entity.)

    • "Professional private" ways an individual who is licensed to provide the aforementioned professional person service as is rendered past that professional entity. BOC §301.003(5).
    • "Professional organization" means a person other than an private that renders the aforementioned professional person service equally the professional entity simply through owners, members, managerial officials, employees, or agents, each of whom is a professional person individual or professional person organization. BOC §301.003(vii).

    Table Showing Requirements for Owners, Governing Persons, and Officers for Texas Professional Entities.

    Texas Professional Entity Blazon	Ownership Requirements	Governing Person Requirements	Officer Requirements
    Professional Limited Liability Company (PLLC)	Professional individual or professional arrangement	Professional person individual or professional person organization	Professional individual only
    Professional Corporation (PC)	Professional private or professional organization	Professional individual only	Professional individual just
    Professional person Association (PA)	Professional individual only	Professional person individual merely; must also exist member	Professional individual only; must too be member; president must be both member and governing person

Proper noun Problems

1. Will filing a certificate of formation keep others from using my company proper name?
2. Can I annals a merchandise name?
3. How can I protect a merchandise proper noun nationwide?
4. Can a corporate general partner of an LP accept the same name as the limited partnership, except for the organizational identifier, i.due east., "Co.," "Corp.," or "Inc."?
5. How to Obtain a Letter of No Objection from the Cyberbanking Commissioner in Order to Use Certain Words in a Proposed Business Title
6. How to obtain blessing from the Texas College Didactics Analogous Board (THECB) for apply of the terms "college," "university," "school of medicine," "medical school," "health science eye," "schoolhouse of law," "police school," or "law eye" in an entity proper noun.
7. Are there limitations on the use of the terms "engineer", "engineering" or any variation thereof in filing entity names?

1. Will filing a certificate of germination continue others from using my company proper name?

   No. Generally, every business must protect its own intellectual property and good will. Filing a document of germination merely prevents the secretarial assistant of state from filing a subsequent certificate of formation for an entity with a name that the secretary of state determines is non distinguishable in the records.

2. Tin I annals a trade name?

   Texas law does non provide for registration of a business organisation's trade name, whether that business organization is incorporated or unincorporated.

   Individuals and unincorporated entities that do business using an causeless name (often referred to equally a "dba") must file an assumed name document with the county clerk in each county in which concern bounds are maintained.

   If a corporation, LLC, or LP does business organisation under a proper noun other than the legal name in its certificate of formation, it must file causeless proper noun certificates with the secretary of country and with the clerk of the appropriate county. (See Assumed Name FAQ #9)

3. How tin I protect a trade name nationwide?

   The secretary of state recommends that y'all consult a private chaser about trademarks, service marks, and other intellectual property matters.

4. Tin can a corporate general partner of an LP have the same proper name as the limited partnership, except for the organizational identifier, i.eastward., "Co.," "Corp.," or "Inc."?

   The secretary of land cannot file an entity name that is the aforementioned, except for the organizational identifier, as an existing entity proper noun on file unless the existing entity provides written notarized consent.

5. How to Obtain a Letter of No Objection from the Banking Commissioner in Order to Utilize Certain Words in a Proposed Business Championship

   Nether the provisions of sections 31.005 and 181.004(a) of the Texas Finance Code, the proper name of a domestic or strange entity is prohibited from containing sure words in its championship. The Cyberbanking Commissioner has the authorization to issue a letter of the alphabet of no objection for apply of these words or terms. Receipt of the alphabetic character from the Commissioner will enable the requestor to submit certain filings to the secretary of country.

   The following names, or phonetically like derivatives of such names, taken from the listing of prohibited names, have been determined to require a letter of no objection from the Banking Commissioner.

   • Banking concern
   • Banc
   • Bank and Trust
   • Trust

     Persons seeking the issuance of a letter of no objection should submit a letter containing the following information to the Cyberbanking Department's Corporate Activities Division at the address appearing beneath:

     1. A detailed alphabetic character describing in evidently language:
        1. the verbal name they are seeking to use and the primary business activities of the entity in Texas; and
        2. why use of the term "bank," "banc," "trust," etc., is of import to employ in the name and notwithstanding is not deceptive to the public; and
        3. the license condition on the entity either: (1) indicating the status of whatsoever license(s) that the corporation must obtain in order to practice business in this state, or (two) representing that no license or authorisation is necessary to conduct that business in this state.
     2. A commitment addressed to the Commissioner from management of the entity, or an agent authorized to demark the entity, that the entity volition non advertise or concur out to the public in any way that it is a state or national bank, trust visitor or
     3. A full explanation of any affiliation with a bank, bank holding visitor, trust company, or other financial establishment;
     4. Evidence of any qualification to do business in other states; and,
     5. $100 filing fee.
     6. If the entity owns or operates a web site, that contains the words "bank," "banc," "trust" etc., management of the entity, or an agent authorized to bind the entity, must submit a commitment that the entity will prominently display the following disclaimer on its homepage "(name of entity) is not a chartered bank or trust visitor, or depository institution. Information technology is not authorized to accept deposits or trust accounts and is not licensed or regulated by any state or federal banking authority."
        

   The Banking Commissioner will review the proposed name and utilize of terms, along with other material submitted every bit a whole in order to make a determination. Submission of the $100 filing fee is required for consideration, just does not constitute guarantee of approval of the proposed proper noun. More often than not, the Commissioner will grant a request if, in context, the term is non misleading and is used (1) to indicate a permissible and authorized amalgamation with a bank or trust visitor; (2) by an actual trust or entity controlled by the trust for the purpose of conducting its ain business (other than the business of providing banking or fiduciary services to the public); (3) by a vendor of services or products to financial institutions in a manner and context that adequately describes its business organization; or (4) equally a term of art in a style and context that clearly invokes an established secondary meaning. If your request falls outside these parameters, the take a chance of approving is slim.

   Requests should be addressed to:

   Corporate Activities Sectionalisation
   Texas Department of Banking
   2601 N Lamar Blvd.
   Austin, TX 78705-4294

6. How to obtain approval from the Texas Higher Education Coordinating Board (THECB) for use of the terms "college," "academy," "school of medicine," "medical school," "health science eye," "school of law," "police force school," or "constabulary heart" in an entity name.

   The Texas Teaching Code prohibits the apply of the terms "college," "university," "school of medicine," "medical school," "health science center," "school of law," "constabulary school," and "law centre." If a proposed name includes these terms, or terms of similar meaning, whether in English or another language, the entity must obtain the prior approval of the Texas College Educational activity Analogous Lath ("THECB"). Tex. Ed. Code, § 61.313.

   For dominance to utilize whatsoever of these terms in an entity name, a asking letter should exist submitted to the THECB stating the post-obit:

   1. Proper noun of the entity as proposed to be filed with the secretary of state.
   2. A brief statement of the business organisation of the entity. One or two sentences should be sufficient; do non cut and paste boilerplate language from the certificate of formation.
   3. The following disclaimer, providing it is truthful: "The entity is not at present nor will be a individual establishment of higher teaching or an educational or grooming establishment."
      

   If you wish to accept your response faxed to you by THECB, in the body of the letter request a fax and provide your fax number. The request letter must contain the address and telephone number of the entity or person requesting the authorization (business letterhead is acceptable).  The letter of the alphabet may exist sent by the entity requesting the authorization or an amanuensis representing the entity (attorney or other entity authorized to represent the entity to facilitate the approving)

   Please mail or fax this information to:

   Academic Affairs and Enquiry Division
   Texas Higher Education Coordinating Board
   P.O. Box 12788
   Austin, TX 78711
   512-427-6168 (fax)

   A copy of the approval letter from THECB should be submitted with your document of formation or other filing musical instrument to the secretary of land.

7. Are in that location limitations on the use of the terms "engineer", "engineering" or whatsoever variation thereof in filing entity names?

   Yes. Department 1001.405 of the Texas Engineering Do Deed (PDF) (Texas Occupations Code, Chapter 1001) restricts the use of the terms "engineer" and "engineering" or any variation thereof in a filing entity name unless the filing entity:
   1. is registered with the Texas Board of Professional Engineers and Country Surveyors (TBPELS),
   2. employs a professional person engineer, licensed by TBPELS in accordance with the Texas Engineering Practice Act, on a full-time basis [run across Section 1001.004(c) and 1001.003 of the Texas Engineering Exercise Act (PDF)], and
   3. is actively engaged in the practice of engineering science.
   Earlier filing paperwork with the Texas Secretary of Land's office to form a new filing entity with some variation of "engineer" or "technology" in its proper noun, please Contact TBPELS to verify the proposed name will be compliant with the requirements of the Texas Engineering Practice Deed.

After Formation

1. Practice I take to file an annual report with the secretarial assistant of state?
2. Where can I get a corporate seal, stock certificates, and a minute book?
3. At present that I've formed my corporation, does the secretary of country effect my federal employer identification number (EIN or FEIN)?
4. How much franchise tax must an entity pay?
5. Can I file my entity's bylaws, visitor agreement or other internal governing documents with the secretary of state?
6. Why didn't I receive a file-stamped copy of my document of germination?
7. I'm ready to consequence shares in my corporation or ownership interests in my limited liability company or limited partnership. Do I demand to file something with secretarial assistant of country? Practise I need to annals the shares or ownership interests equally securities?

1. Exercise I have to file an almanac report with the secretarial assistant of country?

   Simply certain types of entities file annual or periodic reports with the Secretary of State.

   • A Texas partnership registered as a Texas limited liability partnership (LLP) is required to file an annual study with the secretarial assistant of land no later than June one of each year following the agenda year in which the awarding for registration takes effect. A detect to file the LLP almanac report is sent past the secretary of state no later than March 31 of the current study year.
   • Nonprofit corporations (Texas and foreign) are required to file a periodic report with the secretary of state upon receiving notice, but not more than once every four years. The secretarial assistant of state will ship notice to the nonprofit corporation at the registered agent address on file.
   • Certain express partnerships (Texas and strange) that are not field of study to state franchise taxation are required to file a periodic written report with the secretary of state upon receiving notice, but not more than than once every four years. The secretary of state will send notice to a limited partnership at the registered agent address on file.

   For-profit and professional corporations, professional associations, LLCs, and certain limited partnerships (whether Texas or foreign) that are discipline to land franchise tax laws file annually with the Comptroller of Public Accounts. As part of the almanac franchise revenue enhancement reports, these taxable entities file a Public Data Report (PIR). The PIR lists the names and addresses of persons who are officers/directors and managers at the time the written report is filed.

2. Where can I become a corporate seal, stock certificates, and a infinitesimal book?
   

   Texas police does not require a business organisation to take a seal; therefore the secretary of land does not have data or regulations on how to design a seal or where to obtain one. Seals, stock certificates, and infinitesimal books tin be purchased from book stores, office supply stores, or corporate service companies.

3. At present that I've formed my corporation, does the secretarial assistant of state upshot my federal employer identification number (EIN or FEIN)?
   

   No. The secretary of land does not issue employer identification numbers. For data on EINs, contact the Internal Revenue Service.

4. How much franchise tax must an entity pay?

   The Secretary of State cannot answer this question. For information, delight visit the Texas Comptroller of Public Accounts franchise tax website.

5. Tin can I file my entity's bylaws, company agreement or other internal governing documents with the secretary of country?

   No. A concern entity keeps its internal governing documents at its principal office. No statute permits the filing of these documents with the secretary of state; therefore, the secretary of land cannot accept them for filing.

6. Why didn't I receive a file-stamped copy of my certificate of formation?

   In social club to receive a file-stamped copy of a filing musical instrument, you must submit a duplicate re-create of the filing instrument. The secretarial assistant of state does non reject filing instruments that are not accompanied by a duplicate copy if the filing instrument otherwise conforms to the statutory requirements. In addition, the secretary of state is not required to attach a file-stamped copy of an instrument when no indistinguishable re-create has been provided

7. I'm set to consequence shares in my corporation or ownership interests in my express liability company or limited partnership. Do I demand to file something with secretary of land? Do I need to register the shares or ownership interests as securities?

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

"Nonprofit" LLCs

1. Can I form a nonprofit LLC in Texas?
   
2. Will an LLC with a nonprofit purpose be taxation-exempt?
   
3. Does the secretary of state have a form I tin can utilize to grade an LLC with a nonprofit purpose?
   
4. Which filing fees apply to my LLC? Practise I pay the filing fees for a nonprofit corporation?

1. Can I grade a nonprofit LLC in Texas?

   The Texas Business Organizations Code (BOC) does not recognize the term "nonprofit LLC" as describing a specific type of entity, but the BOC does allow for the formation of an LLC with a nonprofit purpose. Although a for-turn a profit corporation is prohibited from "operating a nonprofit establishment" (BOC §ii.008), the BOC does non impose this prohibition on LLCs. This is one of the few noun changes introduced by the BOC.

2. Will an LLC with a nonprofit purpose exist revenue enhancement-exempt?

   A Texas LLC that states a nonprofit purpose is not automatically exempt from land or federal taxes. For information on whether the IRS will grant a revenue enhancement-exempt status to such an LLC, contact the IRS or read IRS Publication 557: Tax-Exempt Condition for Your Organization. For information on whether the Texas Comptroller will grant revenue enhancement-exempt status, contact the Comptroller'south Exempt Organizations Department.

3. Does the secretary of state have a form I can utilize to grade an LLC with a nonprofit purpose?

   No. Form 205 (Word, PDF) can be used to create a full general purpose LLC, simply information technology is not designed to create an LLC with a nonprofit purpose, and it is not designed to satisfy any requirements that the IRS or Texas Comptroller might impose for tax-exemption. You should consult with your chaser if you want to form a taxation-exempt or nonprofit LLC.

4. If I form an LLC with a nonprofit purpose which filing fees apply to my LLC? Do I pay the filing fees for a nonprofit corporation?

   A Texas LLC that states a nonprofit purpose remains an LLC, as that term is defined in department one.002(46). It is subject to the regular LLC fees, and it is governed by the regular LLC provisions (§§101.001 et seq.).

Series LLCs

1. What is a series LLC?  Should I form a series LLC?
2. How do I form a series LLC in Texas?
3. If the serial does business nether a specific name, should an assumed name certificate be filed?
4. Can I register my out-of-land series LLC to transact business in Texas?
5. If I practice business concern in another country, how do I register my serial LLC to transact business?

1. What is a serial LLC?  Should I class a series LLC?

   A series LLC, formed under Texas police, is an LLC that provides in its governing documents for the establishment of a series of members, managers, membership interests, or assets that have separate rights, obligations and liabilities and business purposes from the general LLC. Each private series has the ability to sue and be sued, enter into contracts, hold title to avails, and grant liens or security interests in its assets.

   A serial of the LLC is not a dissever domestic entity or organization for purposes of title 1 and chapter 101 of the Texas Business Organizations Code. [See SB 847, effective 9/01/13].

   If you have questions about the legal or revenue enhancement advantages/disadvantages of forming a series LLC, you lot should consult with your private chaser and/or tax counselor. The secretary of country'south office cannot provide you with this communication.

2. How practise I form a series LLC in Texas?

   You should consult with your private attorney if you are considering forming a series LLC. In social club to receive whatsoever of the benefits of a series LLC, at minimum, the language required by section 101.602(a)(1)-(2) of the Texas Business Organizations Code must be included in your certificate of germination and visitor agreement, and yous must maintain separate records for the assets of each series. See sections 101.601-101.621 of the Texas Business concern Organizations Code for more than information. The secretary of state does not have a specific class to be used to form a serial LLC. If you want to apply our general certificate of formation for a limited liability company (Form 205 Discussion, PDF), you may do so and add together the boosted required information in the Supplemental Text area of the form.

3. If the series does business organisation nether a specific name, should an assumed name certificate exist filed?

   Aye. 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 proper noun certificate for the name of the series in compliance with chapter 71 of the Texas Business organization & Commerce Code. [Run into HB 1624, effective ix/01/xiii]. See Form 503 (Word, PDF).

4. Can I annals my out-of-state series LLC to transact business concern in Texas?

   Aye. A serial LLC formed nether the laws of another jurisdiction volition exist treated as a single legal entity for qualification purposes. The LLC itself rather than the individual series should register as the legal entity that is transacting concern in Texas. The secretary of state has a separate application for registration form for foreign series LLC. See Form 313 (Discussion, PDF). If each or any series of the LLC transacting business in Texas transacts business under a name other than the proper noun of the LLC, the LLC must file an assumed name certificate in compliance with affiliate 71 of the Texas Business organisation & Commerce Code. See Form 503 (Word, PDF).

5. If I do business in some other state, how practise I register my series LLC to transact concern?

   Not all states recognize a series LLC. You should contact the filing official in the country(s) where you contemplate transacting business to determine if the state recognizes series LLCs and, if and then, the filing requirements. You may also desire to consult with your private attorney to determine if a series LLC is the best construction to encounter your business goals.

Express liability partnerships (LLPs) and limited liability limited partnerships (LLLPs)

1. What is a Express Liability Partnership (LLP)?
2. What is the deviation betwixt a full general partnership, a limited partnership (LP), a limited liability partnership (LLP), and a limited liability limited partnership (LLLP)?
3. What are the benefits of registering an existing partnership as an LLP?
4. Why did the secretary of land pass up my application to register an LLP?
5. Are LLPs exempt from franchise taxes?
6. How do I form an LLP?
7. How do I convert my entity into an LLP?
8. I already created a general partnership or a limited partnership (LP). How does my partnership register equally an LLP? What does the partnership need to do to maintain its LLP registration with the secretary of state?
9. How long does my partnership 's LLP registration last?
10. My LLP registration expired. May I renew it?
11. Does an out-of-state LLP accept to register with the secretary of land before it transacts business in Texas?
12. Does an LLP need to inform the secretary of country that the underlying partnership has been dissolved or otherwise voluntarily terminated its being?

1. What is a Limited Liability Partnership (LLP)?

   In Texas, a limited liability partnership (LLP) is either a pre-existing general partnership or a pre-existing limited partnership (LP) that takes the additional and entirely optional step of registering with the secretary of state as an LLP. Tex. Jitney. Orgs. Code §§152.801 et seq. and 153.351 et seq. Filing an application for registration of an LLP does non create a partnership or any other entity. Instead, an LLP is but an optional registration that is made by an underlying, pre-existing partnership.

2. What is the difference between a general partnership, a express partnership (LP), a express liability partnership (LLP), and a limited liability limited partnership (LLLP)?

   A general partnership is defined equally "an association of two or more persons to carry on a business organization for profit as owners." §152.051. General partnerships tin be created by oral or written agreement. General partnerships are created without filing any germination documents with the secretary of state. A full general partnership must have at to the lowest degree two partners, and each partner in a full general partnership is a general partner. If a general partnership chooses to have the additional step of registering as an LLP, it must use "limited liability partnership" (or whatever abridgement thereof, such as LLP) in its legal proper noun. §5.063.

   The only way to create a Texas express partnership (LP) is to file a certificate of formation with the secretary of state.§§three.001(a); ane.002(22). Encounter Course 207 (Word, PDF). A limited partnership (LP) consists of one or more than full general partners plus i or more limited partners. §1.002(50). If a limited partnership (LP) chooses to have the additional step of registering as a limited liability partnership (LLP), it must use either "limited liability partnership" (or whatever abridgement thereof, such as LLP) or "limited liability limited partnership (LLLP)" (or any abbreviation thereof, such as LLLP) as an organizational indicator in its legal proper name.§5.055.

   A limited liability partnership (LLP) is non an entity separate and autonomously from its underlying partnership. Filing an awarding for registration of an LLP does not create a partnership. Instead, an LLP is a registration that is made by a pre-existing full general partnership or a pre-existing express partnership (LP).

3. What are the benefits of registering an existing partnership as an LLP?

   Past fulfilling the requirements of sections 152.801 et seq. or 153.351 et seq. and registering as an LLP, a partnership gives its general partners the personal liability protection described in section 152.801.

4. Why did the secretary of state pass up my awarding to annals an LLP?

   The nigh common causes for rejection are:

   (1) If an application to annals a partnership as an LLP indicates that the underlying partnership is a limited partnership (LP), only at that place is no tape that a formation document was filed with this office to create an LP, we will turn down the awarding. A limited partnership (LP) must be created and in existence before it can take the additional step of registering every bit an LLP.

   (2) If an awarding to annals a partnership as an LLP states that the underlying partnership only has one full general partner, the underlying partnership must be an LP. (Full general partnerships must have at least two partners, and every partner in a general partnership is a full general partner.) If there is no tape that a germination document was filed with this office to create an LP, we will reject the LLP application. An LP can only be created by filing formation documents with our part. An LP must be created and in existence before information technology can take the additional step of registering as an LLP.

5. Are LLPs exempt from franchise tax?

   There accept been significant changes in the Texas Taxation Code. Currently, some partnerships are subject field to franchise tax. If a partnership is not otherwise field of study to franchise revenue enhancement, registering the partnership every bit an LLP volition subject the partnership to franchise tax. For more information, contact the Texas Comptroller of Public Accounts and/or your private attorney.

6. How do I form an LLP?

   Yous cannot "form" an LLP; instead, yous tin can form a partnership (either a general partnership or a limited partnership (LP)), and the partnership tin can choose to have the steps to register as an LLP. An LLP is non an entity separate and apart from the underlying partnership; instead, it is a registration that is made by the underlying partnership, namely, a pre-existing full general partnership or a pre-existing express partnership (LP) to limit the liability of its partners. Registering an LLP does non create a partnership.

7. How practice I convert my entity into an LLP?

   You cannot convert an entity into an LLP; instead, you tin can convert your entity into a partnership (either a general partnership or a limited partnership (LP)), and the partnership can choose to take the steps to annals as an LLP. If you lot submit conversion documents list the converted entity blazon as an "LLP," the secretary of state will pass up the documents and ask you to specify whether the converted entity type is an LP or a general partnership.

8. I already created a general partnership or a express partnership (LP). How does my partnership register equally an LLP? What does the partnership demand to do to maintain its LLP registration with the secretary of state?

   To register a pre-existing full general partnership as an LLP, or to register a pre-existing express partnership (LP) equally an LLP, you must file an awarding for registration with our office. Y'all may use Class 701 (Give-and-take, PDF) as your awarding for registration. The filing fee is $200 per general partner.

   Constructive Jan 1, 2016, Senate Bill 859 amended Chapter 152 of the Business organisation Organizations Lawmaking (BOC) to add together Section 152.806, which requires a Texas LLP to file an annual written report with the secretary of country. The annual report is due no later than June 1 of each yr following the calendar year in which the application for registration takes effect. The filing fee for the annual report is $200 per general partner as of the date of filing the report. Failure to file the almanac report and pay the report filing fee may issue in the termination of the partnership's registration every bit an LLP.

9. How long does my partnership'due south LLP registration final?

   Texas LLPs: Effective January 1, 2016, Senate Nib 859 amended §152.802 of the Business Organizations Lawmaking (BOC) to eliminate the annual renewal requirement for Texas LLPs. The amendments made the registration of a Texas LLP effective until it is voluntarily withdrawn past the partnership or terminated by the secretary of state.

   Out-of-country LLPs: Senate Bill 859 did not make any changes to section §152.901 of the BOC, which provides for the registration of out-of-state LLPs. The registration of an out-of-state LLP to transact business organisation in Texas lasts ane year, but may be renewed before it expires for an boosted i year term. Meet Form 308 (Word, PDF).

10. My LLP registration expired. May I renew it?

    If an LLP registration has expired, information technology cannot be renewed. If the partnership wants to annals every bit an LLP, it must file a new registration. Run into Form 701 (Word, PDF). New registrations cannot be backdated. Expiration of an LLP registration does not affect the existence of the underlying partnership; however, in that location may be a gap in liability protection.

11. Does an out-of-state LLP accept to register with the secretary of land earlier it transacts business in Texas?

    Yes. §152.901 et seq. Encounter Grade 307 (Word, PDF). The fee for registration is $200 for each general partner that resides in Texas, but no less than $200 and no more than $750. LLP registrations must be renewed each yr. See Course 308 (Discussion, PDF).  If the underlying partnership is a LP, the LP must also file a dissever awarding for registration.  The fee for this i-time registration is $750.  See Form 306 (Word, PDF).

12. Does an LLP need to inform the secretarial assistant of country that the underlying partnership has been dissolved or voluntarily terminated its existence?

    The Business Organizations Lawmaking does not address the question of whether an LLP needs to inform the secretary of state when the underlying partnership has dissolved or otherwise voluntarily terminated its existence. However, on and after Jan one, 2016, the registration of a Texas LLP remains constructive until it is voluntarily withdrawn by the partnership or involuntarily terminated by the secretary of state. If the underlying partnership has been dissolved, the partnership may voluntarily withdraw its registration. See Form 704 (Discussion, PDF). The secretarial assistant of land can remove from its active records the registration of an LLP or LLLP whose registration has been withdrawn or terminated.

Social Purposes

1. May a for-profit corporation include a social purpose in its certificate of formation?

   Traditionally, corporations take been characterized as either for-profit or nonprofit corporations. Generally, a corporation organized for charitable, benevolent, religious, cultural or other like purposes must be formed every bit a nonprofit corporation. [See § 2.008 of the Texas Business organization Organizations Code.] However, § 3.007 of the Code was amended past SB 849, effective September 1, 2013, to authorize a for-profit corporation to include 1 or more social purposes in its document of formation. The specific social purpose or purposes would be in addition to the purpose or purposes required to be stated in the for-profit corporation's certificate of formation.

   Social purposes are divers in § 1.002(82-a) of the Code and consist of promoting one or more positive impacts or minimizing negative impacts on society or the environment. For instance, social purposes may include providing low-income or underserved individuals or communities with beneficial products or services; promoting economical opportunity for individuals or communities; preserving the environment; improving human health; promoting the arts, sciences, or advancement of cognition; increasing the flow of upper-case letter to entities with a social purposes; and conferring whatever particular do good on society or the environment.

   The certificate of formation may also include a provision that the lath of directors and officers of the for-profit corporation may consider any social purpose specified in the certificate of formation in discharging the duties of directors or officers. To determine the extent and circumstances under which an officer or director of a for-turn a profit corporation must consider social purposes, please review chapter 21 of the Code, specifically §§ 21.101 and 21.401, as amended by SB 849. If you take questions about social purposes, you should consult with your attorney. The secretary of land's function cannot provide you with legal or business communication.

Public Benefit Corporations

1. What is a Public Benefit Corporation?
2. How do I form a Public Benefit Corporation?
3. What are the requirements for management of a Public Benefit Corporation?
4. I am currently a for-profit corporation, tin can I convert to a public do good corporation?

1. What is a Public Benefit Corporation?

   HB 3488 (PDF), effective September 1, 2017, authorizes a for-profit corporation to elect to exist a public benefit corporation. A public benefit corporation is a domestic for-profit corporation that is intended to produce a public benefit and to operate in a responsible and sustainable mode.

2. How do I course a Public Benefit Corporation?

   The Secretary of State does not accept a grade for creating a public do good corporation. You may typhoon your own certificate of formation in accordance with Chapters iii and 21 of the Texas Business organization Organization Lawmaking.

   The formation document should include (i) one or more specific public benefits to be promoted by the corporation and (2) a argument that the filing entity is a for-turn a profit corporation electing to be a public benefit corporation. See HB 3488 (PDF).

   Please notation that instead of the organizational identifiers required for a for-profit corporation, a public benefit corporation name may contain the words "public do good corporation," the abbreviation "P.B.C." or the designation "PBC."  If the entity chooses to non include one of these identifiers, there may be other internal notice requirements.

3. What are the requirements for management of a Public Do good Corporation?

   A public benefit corporation is required to be managed in a manner that balances (1) the shareholders' pecuniary interest, (two) the best interest of those persons materially affected by the corporation's behave, and (3) the public benefit or benefits specified in the corporation's certificate of formation. The board of directors must manage or direct the business and diplomacy of the corporation in a manner that balances the same interests listed to a higher place. Tex. Bus. Orgs. Code § 21.95(a).

4. I am currently a for-profit corporation, can I convert to a public benefit corporation?

   A public do good corporation is a for-turn a profit corporation that has elected to be a public benefit corporation; therefore, a conversion is not necessary. You may file a certificate of subpoena to amend your certificate of formation to include the necessary language.

Source: https://www.sos.texas.gov/corp/formationfaqs.shtml

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