An LLC is a Limited Liability Company synonymous with a private limited business. This business structure combines the pass-through taxation comparable to a partnership or that of a sole proprietorship that entails a blatant limitation in terms of the company’s liability.
But, if you want to start an LLC in Texas or any other US state, there are crucial things you should know first, and we’ve listed them for you.
An LLC Needs A Distinguishable Name
Most US states will require that your registered LLC business will need its own unique and distinguishable name. You may not borrow the names of other registered businesses in the state. Basically, there must be a clear difference between your company name and that of every other business in the state.
As a result, it’s wise to start thinking of your brand name beforehand, even before launching your business, and after that, you must reserve the business name for a while for a small fee. It’s also wise to do a business name search to determine which names are already reserved and registered.
- You Will Need A Registered Agent
You’ll need to find a registered agent for your LLC. This is either an individual or entity that will accept the service of processes and legal summons on behalf of your company. With this, a registered LLC agent must also be a resident of the state in which your LLC resides.
It’s typically best to opt for a registered agent service. Some of the benefits here include legal compliance, flexibility, privacy, and, of course, peace of mind.
- Your LLC Will Need An Operating Agreement
You’ll also need a valid operating agreement; even though this is not always legally essential, it’s still worthwhile.
An operating agreement will protect your company’s limited liability status and solidify any member agreements. Moreover, this agreement will also restrain the state from taking control of your operational agreements.
- You Must Establish Business Credit Immediately
Business credit is typically crucial to provide the business owner with accessible funds that are then leveraged for growth. Even if you have saved up capital to launch your company, it’s often still crucial to opt for business credit as soon as you start your LLC.
Establishing business credit early on also means that you won’t later be denied access to credit usage should you need some financial assistance from a lender. Fortunately, establishing business credit isn’t challenging, but it is essential.
- Your Bank Account Will Need An EIN
Your bank account must have an EIN, which is an employer identification number. You’ll need to obtain this from the IRS.
Even though single-member LLCs that don’t yet have any employees are not legally required to have this bank attachment, it’s still wise to obtain this as soon as possible to remain compliant along your business journey.
- You Have Tax Options
As an LLC, your tax options will differ substantially from those of employees. The tax structure is undeniably different, so evaluate the relevant system and opt for an accountant if you don’t understand any detail in this regard.