Many would-be entrepreneurs have asked the question over again: How to start a LLC? With all the hullabaloo regarding the intricacies of incorporating a business in Texas, many new business owners are feeling overwhelmed and discouraged. But why is all the attention on the topic? And how can you truly make the jump from an employee or a contract employee to an LLC?
LLCs are extremely popular in the United States today. The Limited Liability Company Act of 2021, better known as the LLLA, was passed by the Texas legislature in response to the growing number of LLCs being registered in the state. The new law allows for an unlimited number of LLCs, which can be operated and owned by anyone. Also, unlike corporations, there is no limit on the memberships of a LLC. Unlike partnerships, an LLC is not required to provide shareholders' meetings and no need to file annual reports.
If you're considering incorporating, the first step is to determine the scope of your business and choose the name. Your name should reflect the essence of what your business sells or offers to others. If you have a product that can be used in several places, you'll want to pick a name that's easy to spell and difficult to confuse with a competitor's product. Think about names that are a dead giveaway as to what the business is selling. For example, if you're a dog grooming company, you could choose to name your business "Dogs Gentleman's Dogs Grooming and Kitten grooming."
How to Start an LLC - Steps to Take
To open your LLC, you'll need to register it at the county clerk's office and pay a simple $100 filing fee. (If the county office has a website, it will help you download and fill out the paperwork.) After paying the fee and registering your business, you'll need to obtain a state business license. In Texas, this can be done by attending a one-day training class.
To further protect yourself from liability, you'll also want to get a registered agent who can act on your behalf in most transactions. You can hire a general contractor, but in this case, you'll have the responsibility for paying the contractor. In addition, you'll need to keep careful records of your meetings with clients and contractors, such as invoices and purchase orders. If a contractor doesn't follow through with scheduled work, you'll need to pay him or her.
While you're learning get an llc, you'll also need to learn about corporation requirements and limited liability. Both of these are required if you want to open a limited liability company. A corporation requires two individuals, each of which is individually qualified to control and manage the business. Each of the corporations must register with the state as a separate business entity. This is because only the corporation is permitted to do business in a particular geographic area.
When you're learning how to start an llc, it's important to remember that some members of the LLC may be considered partners. For instance, if you have five other people who are equally owners of the business, all of whom have valid licenses to operate a business, then they can all open an LLC together. This opens up the possibility for them to fight over control of the business if things don't go their way. If this happens, it could mean you'll have to open a new corporation all over again. However, if the partners can come to an agreement to share control of the business, this can save you time and money by making sure that the partners work together.
You'll find that learning how to start an LLC is relatively easy and simple if you take the time to educate yourself. Just be sure to choose a good course so that you won't have to spend money on courses that are essentially paid for by the government or some outside entity. Look around online to see what you can find. There are plenty of good books you can read that will show you everything you need to know about starting up your own open business. You can also try online courses, like the one in our resource box below, which will help you learn how to open an LLC in no time.
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