How Long Does it Take to Form a Texas LLC?
Deciding to start your own Limited Liability Company (LLC) in Texas is a major step towards achieving your entrepreneurial dreams. But understanding the process and timeline can be a bit overwhelming. This guide will break down the steps, help you understand the timeline, and get your Texas LLC up and running.
Step 1: Getting Things Ready - Timeframe: Depends on You
Before diving into paperwork, there's some legwork to do. First, you'll need to pick a unique business name that meets Texas's business naming laws. Then, you'll need to decide on a Registered Agent and set up your management structure. How long this takes depends entirely on you, but it shouldn’t be an exhaustive process.
Step 2: Submitting Your Certificate of Formation - Timeframe: 5 Business Days to 72 Business Days
After you've got everything ready, it's time to submit your Certificate of Formation to the Texas Secretary of State. There are four ways to do this, and each has a different processing time:
SOS Direct: The quickest option, with processing taking about 5 business days.
SOS Upload: A little slower, with processing times between 7 and 12 business days.
Expedited Filing via Fax or Mail: For an extra $25, you can have your mailed filing processed in 12 to 14 business days.
Non-Expedited Filing via Fax or Mail: The slowest option, with processing times between 70 and 72 business days.
The method you choose will significantly affect how long it takes to get your LLC formed.
Step 3: Drafting an Operating Agreement - Timeframe: Variable
Even though Texas doesn't require an Operating Agreement, it's good practice to have one to avoid personal liability in the event of a lawsuit. Your operating agreement outlines the rules for how your LLC will operate. How long it takes to draft this agreement depends on the complexity of your LLC.
Step 4: Securing an EIN - Timeframe: Instant to 4 Weeks
The final step is getting an Employer Identification Number (EIN) from the IRS. Though this step technically comes after the official formation of your LLC, your LLC won’t go very far without a business bank account, which requires an EIN to be opened. If submit your EIN application online, you'll get your EIN instantly. However, if you mail in a Form SS-4 application instead, it can take up to 4 weeks. For this reason, we always recommend using the online application method when possible.
In Conclusion
The process of setting up an LLC in Texas can take anywhere from just five business days to over two months, depending on a variety of factors. By understanding the steps and what each involves, you can make the process go as smoothly as possible, and before you know it, your Texas LLC will be ready to roll.
