Texas Limited Liability Company - 4 Kinds are Available

Texas has one of the most comprehensive laws when it comes to business organizations. The Texas Limited Liability Company is the state's most popular legal entity and it formed close to 70,000 of them in 2007.

Within the State of Texas, there are 4 distinct types of LLCs that can be established.

CREATING A DOMESTIC TEXAS LLC

A Domestic Limited Liability Company is used by small businesses and joint ventures. Provided the LLC is formed for a legal purpose, it has very few legal restrictions on what the business must be. This flexibility makes it the most popular LLC in Texas.

It is crucial when forming this type of LLC that the business meets all Texas Limited Liability Company requirements. A LLC service provider of good standing can help business owners ensure all these requirements are met.

CREATING A PROFESSIONAL TEXAS LLC

The Texas LLC Act has specific provisions enabling the creation of a professional LLC entity to provide licensed professional services. This kind of entity has more limitations in that the business purpose is limited to providing specific types of licensed services and owners of the business entity usually have to be professionals licensed to provide the relevant service.

3. Non-Profit Texas Limited Liability Company

If a Texas charity or other non-profit organization wishes, it can create a non-profit Texas limited liability company. A non-profit LLC has many of the same advantages of a non-profit corporation, but it is easier to create.

Non-profit LLC entities are also used for groups like fraternities and trade associations. Just remember that getting formed as a nonprofit under Texas state law does not automatically qualify the entity for tax exempt status. Consult with your accountant to ensure you make the right tax elections.

FOREIGN LLC IN TEXAS

The most complex LLC creation is the "Foreign LLC. This allows an LLC that was created in any of the other 49 states to expand their business to Texas. The foreign LLC must begin by filing for a certificate of authority with the Texas Secretary of State, then follow the appropriate Texas LLC laws.

A foreign LLC is subject to certain LLC laws in Texas but the formation and governance rules of the formation state still apply.

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