Question

What are the specific requirements for forming a Series LLC in Texas, including any necessary paperwork, fees, and ongoing compliance requirements?

Answer 1

Forming a Series LLC in Texas involves several specific requirements, paperwork, fees, and ongoing compliance considerations. Here’s a detailed breakdown:

### Specific Requirements

1. **Eligibility:**
- You must be at least 18 years old and have the legal capacity to enter into contracts.
- A Series LLC must have a designated name that complies with Texas naming laws.

2. **Name Requirements:**
- The name must include "Limited Liability Company," "LLC," or the abbreviations "L.L.C." or "LLC."
- It cannot be the same as or similar to an existing business entity registered in Texas.

3. **Registered Agent:**
- Designate a registered agent (individual or business entity) with a physical address in Texas who will accept legal documents on behalf of the LLC.

### Necessary Paperwork

1. **Certificate of Formation:**
- File Form 205 (Certificate of Formation) with the Texas Secretary of State, including:
- The name of the LLC.
- The duration of the LLC (perpetual or for a specified term).
- The address of the LLC's principal office.
- Information regarding the registered agent.
- A statement that the LLC is a series LLC.

2. **Optionally Add a Series Provision:**
- You can specify the manner in which series will be established and their powers. This can also be detailed in the operating agreement.

### Fees

1. **Filing Fees:**
- The fee for filing the Certificate of Formation is typically around $300. This may vary based on the type of filing and any additional services requested.

2. **Additional Fees:**
- If you choose to expedite the filing or use additional services, there may be extra fees.

### Ongoing Compliance Requirements

1. **Annual Franchise Tax:**
- All LLCs in Texas, including Series LLCs, must file an annual franchise tax report and pay any associated taxes.

2. **Operating Agreement:**
- While not required to be filed with the state, it is advisable to create an operating agreement that outlines the management structure and operations of the LLC and its series.

3. **Record Keeping:**
- Maintain proper records for each series, including financial transactions, contracts, and meetings, demonstrating the separateness of each series.

4. **Compliance with Local Regulations:**
- Ensure you comply with any local business licenses or permits required for your business activities.

5. **Tax Considerations:**
- It’s essential to consult a tax advisor to understand how operating as a Series LLC may impact your tax filings.

6. **Amendments:**
- If any changes occur (e.g., changing the registered agent or address), you must file the appropriate amendment forms with the Texas Secretary of State.

### Additional Considerations

- **Consult Professionals:**
- It is recommended to consult with a legal professional or accountant familiar with Series LLCs to ensure compliance with all regulations and to understand the implications of operating with a Series LLC structure.

- **Difference in Series:**
- Each series under a Series LLC can have different assets, members, and management structures and be treated as a separate entity for liability purposes.

By following these steps and maintaining compliance, you can successfully form and operate a Series LLC in Texas.