You’ve come up with a business idea and are ready to make your dreams a reality. But first, you need to register your business with the state of Texas formally.
One of the most common entity types for businesses, no matter the size or industry, is the limited liability company (LLC), which offers personal liability protection without the formalities of a corporation.
However, even though LLCs have fewer formalities, their members must pick a name that embodies their brand and goals and isn’t already used by another company.
Here’s a guide for new business owners on how to name your LLC in Texas and how the business formation attorneys at the Zimmerman Law Firm can help.
LLC Name Ideas
When brainstorming ideas for your LLC name, it’s essential to consider several factors to ensure your business name is memorable, meaningful, and legally compliant. Here are some key considerations.
- Relevance – choose a name that reflects your business’s nature, values, or unique selling points;
- Memorability – select a name that is easy to remember and pronounce to help with brand recognition;
- Availability – ensure the name is not already in use by another business in your state to avoid legal issues;
- Compliance – follow state naming rules, such as including “Limited Liability Company” or an abbreviation in your name; and
- Future growth – consider how the name will accommodate your business’s growth and potential expansion into new markets or services.
By considering these factors, you can choose a name that resonates with your target audience and sets your LLC up for success.
Texas LLC Naming Requirements
In the Lone Star State, prospective business owners must abide by the Texas Business Organizations Code’s LLC naming requirements. First, the name must include the words “Limited Liability Company” or one of its abbreviations, such as “LLC” or “L.L.C.”
This requirement helps clarify the legal structure of the business to the public. Second, the name must be distinguishable from other LLC names already on file with the Texas Secretary of State.
This means that your LLC’s name must not be too similar to the names of existing businesses in Texas, which helps prevent confusion among consumers and businesses alike. It’s this second requirement that often confuses business owners.
With tens of thousands of registered companies in Texas every year, how can you know if the name you chose hasn’t already been taken by someone else?
A Step-by-Step Guide to a Texas LLC Name Search
Once you have a name in mind for your LLC, the next step is to make sure no one else is using the same one.
1. Go to the Texas Secretary of State’s Website
To search through the Texas Secretary of State’s database, you must first create an SOSDirect account or use a temporary login, both of which require a credit card to begin searching.
Alternatively, some people opt for a less thorough search using the Texas Comptroller’s taxable entity search, which is free but not as exhaustive.
2. Check for Similar Names in the State’s Business Database
Next, check for similar names to ensure yours is unique and not currently in use by another business. Access the business entity search tool and select “Name Availability Search.”
Each search is $1, but the fee is waived if you order any filings. The search will let you know if your name is used by any business on file with the Secretary of State.
3. Reserve Your Texas LLC Name
Like other states, Texas allows you to reserve a business name if you’ve found one you like but aren’t quite ready to officially form your LLC. You can file a name reservation through SOSDirect 24 hours a day, seven days a week. A reservation is good for 120 days, and there is no limit on the number of names you can reserve.
3. Perform a Trademark Search
Although not required, it is still a good idea for potential business owners to do a trademark search and make sure that no existing trademarks conflict with your chosen name.
To search for trademarks similar to your desired LLC name, go to the United States Patent and Trademark Office’s website and use their Trademark Electronic Search System (TESS).
How to Register an LLC in Texas
The first step in forming your LLC is picking a name. Then, it’s time to register it with the state officially.
- File Certificate of Formation. Prepare and file the Certificate of Formation with the Texas Secretary of State. This form requires basic information about the LLC, such as name, address, and registered agent.
- Appoint a Registered Agent. Designate an individual or entity to receive legal documents on behalf of the LLC. Having a registered agent is required by the state.
- Create an Operating Agreement. Although not required by the state, it’s advisable to create an operating agreement outlining the management and operation of the LLC. Having one can help you avoid and solve issues concerning business management and other conflicts.
- Obtain an Employer Identification Number (EIN). Apply for an EIN from the IRS, which is necessary for tax purposes and opening a business bank account. Your EIN serves as the business’s social security number.
- Comply with Other Regulatory Requirements. Depending on the nature of your business, you may need to obtain licenses or permits at the state or local level. Be sure to talk with a local business law attorney to see what licenses and permits might be required for your business.
- File Annual Reports. LLCs in Texas must file an annual report with the Secretary of State to maintain good standing. In addition to basic information about the business, filers must also pay a yearly fee or risk falling out of compliance.
- Maintain Records. Keep accurate and up-to-date records of meetings, resolutions, and financial transactions.
Once your LLC is set up, you’re ready to start pursuing your goals.
Contact a Waco Business Formation Lawyer
Ready to form your own business? Starting your venture is an exciting time, but it can be overwhelming if you’re unfamiliar with the process.
At the Zimmerman Law Firm, we have decades of combined legal experience and can walk you through the business formation process from start to finish. Give us a call today to discuss your situation, or fill out our online contact form.
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Michael Zimmerman
Michael was born in Houston, Texas. His education at Baylor and Texas State Universities earned him a Bachelor of Science degree in 1987. His major was in Biology with a Minor in Chemistry. He finished his legal education at Texas Southern University in 1990, earning a Juris Doctorate from Thurgood Marshall School of Law. He was admitted to the State Bar of Texas in 1990.
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