Texas has one of the most comprehensive laws when it comes to business organizations. The Texas Limited Liability Company is the state's most popular legal entity and it formed close to 70,000 of them in 2007.

This is because the TX lawmakers know that this kind of legal entity can be used for many purposes to offer serious benefits and advantages to its owners. While the LLC is used most often for small business operations, there are 4 distinct LLC types that can be formed in Texas.

1. Domestic Texas Limited Liability Company

The Domestic Texas LLC is the most prevalent type of LLC in the state. Small businesses and joint ventures are typically classified as this type of LLC in the state. Business owners prefer this type of LLC because of its flexibility it offers and because of the few limitations it imposes on the business entity. As long as the operations are conducted in a lawful manner and for lawful purpose, there are few restrictions placed on business operations.
LLCs can outlast their founders and be used for many purposes. The documents that form the LLC must be carefully written to comply with all of the Texas requirements and to ensure that the LLC will do what the creators intended it to do for as long as it lasts.

PROFESSIONAL TEXAS LLC

The Texas LLC Act has specific provisions enabling the creation of a professional LLC entity to provide licensed professional services. This kind of entity has more limitations in that the business purpose is limited to providing specific types of licensed services and owners of the business entity usually have to be professionals licensed to provide the relevant service.

3. Non-Profit Texas Limited Liability Company

If a Texas charity or other non-profit organization wishes, it can create a non-profit Texas limited liability company. A non-profit LLC has many of the same advantages of a non-profit corporation, but it is easier to create.
It should be noted that tax exempt status is not implied by the formation of a non-profit LLC in the State of Texas. An accountant can help non-profit organizations choose the correct tax elections in regard to tax exempt status.

CREATING A FOREIGN LLC IN TEXAS

Businesses that are formed in another state but conduct business in the State of Texas are referred to as Foreign LLCs. There are Texas LLC laws that address how Foreign LLCs are to be regulated. The Texas Secretary of State is in charge of issuing certificates of authority for out-of-state operations to conduct business within the State of Texas.

Creating a foreign LLC in Texas does not change the terms and conditions of the LLC. It remains subject to the laws of the state where the original LLC was created. The foreign LLC must also obey the Texas laws that apply to it.

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