There are six main types of business structures. They are Limited Liability Company (LLC), Limited Liability Partnership (LLP), Sub-Chapter S Corporation, general partnership, and sole proprietorship. Each type has its own benefits and drawbacks. An entrepreneur can start off by using a particular business formation and change to a different form in future. The founders of a startup can opt for a Limited Liability Company. They will also need to make a decision on the state of incorporation. They can settle on Texas. There are a number of steps that are associated with Texas LLC formation Houston TX.
Finding a common mission and vision is a core step in LLC formation. Most startup founders normally ignore this step and they end up regretting. If shareholders do not have a common vision, the chances of failure will be high. With a common vision, there will be laser light focus on the goals of the company. This is the kind of focus required for success.
Another step is creating a company name. Shareholders will need to be creative on this. They should create a name that will stand out. The business name will be the first point of contact with a brand. Before a customer notices anything about a brand, he will first notice the name. The business name will play an important role in marketing and branding.
A name search process must be done. This will be done online. A small fee must be paid to do the name search. After a suitable name has been identified, it should be booked. This will prevent another person from taking that name. A business does not need to be incorporated after the name has been registered. Incorporation can even happen months later.
The step of finding a registered agent is not mandatory. However, many LLCs that have been incorporated in Houston have registered agents. That is because the shareholders are not physically present in Texas. The registered agent will receive all the company's correspondence. Thus, he should be physically based in Texas. Having a P. O. Box address is not enough for registered agents.
Articles of Organization have to be created. Every shareholder must be involved in this step. The Articles of Organization is a simple document. It has all the basic information about an LLC. The name of the company will be indicated. Mission and vision statements will also be listed. This document will also contain physical address and shareholder names.
An operating agreement can be drafted. Not every company has this. However, it is highly recommended to have an operating agreement for future dispute resolution. Even if shareholders have a shared and common vision, they can easily disagree in future. After all, they are just human beings. The ratio of profit/loss division should be stated by this document.
It is not easy to form a Limited Liability Company. There are a number of steps involved. Some documents also have to be drafted. Starting an LLC also requires shareholders to raise a significant amount of capital and to pay an incorporation fee. However, there will be limited liability protection. This will protect the personal assets of shareholders from creditor claims and lawsuits.
Finding a common mission and vision is a core step in LLC formation. Most startup founders normally ignore this step and they end up regretting. If shareholders do not have a common vision, the chances of failure will be high. With a common vision, there will be laser light focus on the goals of the company. This is the kind of focus required for success.
Another step is creating a company name. Shareholders will need to be creative on this. They should create a name that will stand out. The business name will be the first point of contact with a brand. Before a customer notices anything about a brand, he will first notice the name. The business name will play an important role in marketing and branding.
A name search process must be done. This will be done online. A small fee must be paid to do the name search. After a suitable name has been identified, it should be booked. This will prevent another person from taking that name. A business does not need to be incorporated after the name has been registered. Incorporation can even happen months later.
The step of finding a registered agent is not mandatory. However, many LLCs that have been incorporated in Houston have registered agents. That is because the shareholders are not physically present in Texas. The registered agent will receive all the company's correspondence. Thus, he should be physically based in Texas. Having a P. O. Box address is not enough for registered agents.
Articles of Organization have to be created. Every shareholder must be involved in this step. The Articles of Organization is a simple document. It has all the basic information about an LLC. The name of the company will be indicated. Mission and vision statements will also be listed. This document will also contain physical address and shareholder names.
An operating agreement can be drafted. Not every company has this. However, it is highly recommended to have an operating agreement for future dispute resolution. Even if shareholders have a shared and common vision, they can easily disagree in future. After all, they are just human beings. The ratio of profit/loss division should be stated by this document.
It is not easy to form a Limited Liability Company. There are a number of steps involved. Some documents also have to be drafted. Starting an LLC also requires shareholders to raise a significant amount of capital and to pay an incorporation fee. However, there will be limited liability protection. This will protect the personal assets of shareholders from creditor claims and lawsuits.
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