It is essential that you comprehend the method and prerequisites for submitting Articles of Organization if you are thinking about launching a corporation in the Lone Star State. In Texas, creating a corporate corporation requires completing the Articles of Organization. This article will walk you through the process of creating a company entity, such as an LLC (Limited Liability Company), and outline the essential prerequisites for a successful filing.

Articles of Organization: What Are They?

The legal papers known as Articles of Organization, or Certificate of Formation in some states, are what formally establish a company, LLC, or partnership. Important data regarding the organization, such as its name, registration agent, purpose, and management structure, are included in these papers. In Texas, submitting the Articles of Organization is a requirement for forming a company. Upon approval, this paperwork, which is filed with the Texas Secretary of State's office, officially establish your company.

The Importance of Choosing the Right Business Entity

Understanding the several Texas business entity possibilities is essential before getting into the specifics of filing articles of organization. The legal structure, tax liabilities, and operational flexibility of your firm will all be greatly impacted by the entity type you choose. In Texas, the most prevalent forms of business entities are:

Limited Liability Company (LLC)

Because of its flexibility and limited liability protection, an LLC is a popular option for small and medium-sized enterprises. An LLC's owners are called "members."

Corporation

A corporation and its owners (shareholders) are two different legal entities. Although it provides excellent liability protection, managing it might be more difficult.

Partnership

To run a company jointly, two or more people or organizations form a partnership. There are several categories of partnerships, such as limited and general partnerships.

Sole Proprietorship

This simplest kind of business structure is one in which a single person owns and runs the company. It does not, however, provide protection against personal culpability.

Nonprofit Organization

Religious, educational, or benevolent organizations are the reasons for their formation. They are specifically excused from paying taxes.

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A number of important elements should be taken into account when selecting a company form, including liability protection, tax implications, and management structure. Getting legal or commercial advice before making this choice might be helpful.

Filing Articles of Organization in Texas

There are many procedures and regulations involved in filing articles of organization in Texas. To guarantee that your file is accepted, abide by the following rules:

Select a Company Name

The first step is to choose a name for your company that is distinctive and easy to remember. Make sure the name you choose conforms to the naming laws of the state. It is necessary for the name to have a suitable business designation, such as "LLC" or "Limited Liability Company." On the website of the Texas Secretary of State, you may verify if the name you have selected is available.

Name a Registered Representative

A registered agent is a person or organization that is in charge of accepting legal paperwork on behalf of your company, such as lawsuits and tax notifications. They are often referred to as statutory agents or resident agents. The registered agent has to be accessible during normal business hours and have an actual street address in Texas. Although many company owners choose to employ a professional registered agent service, you are welcome to identify yourself as the registered agent. This helps guarantee that you keep your privacy and that legal papers arrive on time since the agent's address will be visible to the public.

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Articles of Organization

You must submit the Articles of Organization with the Texas Secretary of State in order to formally establish your company. You may get the Articles of Organization form from the Secretary of State's website or by getting in touch with their office. The form may be submitted in person, by mail, or online

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The following details must be included while filling up the Articles of Organization:

  • Name and kind of business
  • Name and location of the registered agent
  • Address for business
  • The kind of management structure (managerial or member-managed).
  • The business's purpose, which is often a broad statement
  • The organizers' names and contact information

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Pay the Documentation Fee

When submitting the Articles of Organization, a filing fee is needed. Depending on the filing method and the kind of business company, the charge may change. The website of the Texas Secretary of State has the most recent fee schedule available.

Draft an LLC operating agreement

Even though it's not mandated by the state, it's a good idea to draft an LLC operating agreement. This internal document describes the ownership interests, operational methods, and management structure of the company. An operating agreement is advantageous even if your LLC only has one member as it helps create a clear division between personal and business matters.

Get your EIN

For taxation reasons, an Employer Identification Number (EIN), sometimes referred to as a Federal Tax Identification Number, is required. The IRS accepts applications by mail, fax, or internet for an EIN. An EIN is required if your company employs more than one individual.

Adhere to Extra State Requirements

You could have other state-specific criteria to meet, depending on your sector and kind of company. For instance, licenses or permissions may be needed for certain sectors or professions. Make sure you look up and abide by any extra laws that could be relevant to your company.

Advice for an Easy Filing Procedure

The following advice may be used to guarantee a successful and efficient filing process:

Verify Name Availability

Use the Texas Secretary of State's website to verify the availability of potential company names before deciding on one. Make sure it is distinct from other existing entities.

Use a Professional Registered Agent

To guarantee that you obtain crucial legal papers on time and that your privacy is maintained, think about using a professional registered agent service.

Accurate Information

Give full, correct information on the organization's articles. Delays and problems may result from mistakes or omissions.

Consult an Attorney 

It is essential to speak with a business adviser or an attorney if you have any doubts or queries about any part of the filing procedure.

Maintain Records

Save copies of every document you file and every email you exchange with the Texas Secretary of State.

Remain Up to Date with Filings

After your company is formed, don't forget to fulfill continuing compliance obligations, such as submitting yearly reports and reapplying for registered agent status.

What Takes Place Following Filing?

Your company organization is formally established after the Articles of Organization are properly filed and approved by the Texas Secretary of State. A copy of the document that was submitted, stamped and approved, will be sent to you.

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You may now go ahead and run your company. But there are a few post-filing responsibilities to think about:

Business Licenses and permissions

To operate lawfully, you could need a few different licenses or permissions, depending on your business and area. Examine the federal, state, and municipal regulations.

Operating Agreement (for LLCs)

As previously said, if you are founding an LLC, it is imperative that you draft an operating agreement. This paper describes your LLC's internal operations.

Tax Identification Number

In order to be in compliance with federal tax laws, you must get an EIN if you haven't already. For tax reporting and other business-related purposes, this number is used.

Bank Account

To keep your personal finances separate, open a corporate bank account. and keep company funds apart. For some company organizations, this is not just a legal need but also a sound commercial practice.

Annual Reporting

The Texas Secretary of State must receive yearly reports from a few types of business organizations, including LLCs. These reports guarantee that the state is up to date on your company's details.

Final Thoughts

One of the most important steps in starting a company in Texas is filing the articles of organization. Your company entity will be legally recognized if you comprehend the procedure and fulfill the criteria, which will shield you from responsibility and provide legal certainty. Even though the procedure could appear difficult at first, it gets easier to handle with the right planning, information, and perhaps expert help. After your company has started operating, it is crucial to continue adhering to state laws and paying your taxes. Establishing a business is a big undertaking, and making sure your company is properly formed lays the groundwork for a profitable and compliant operation. Following the Articles of Organization filing procedures is an essential element of creating a company in the wonderful state of Texas, regardless of the size of the organization.

Resource 

https://llcbuddy.com/texas-llc/texas-articles-of-organizatio

https://www.legalzoom.com/articles/how-to-start-an-llc-in-texas

https://www.wolterskluwer.com/en/solutions/bizfilings/state-guides/texas-llc-requirements‍