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Almost 70,000 Limited Liability Companies were created in Texas during 2007. This kind of business entity is the most popular legal entity in the state.

A Texas Limited Liability Company can provide tax benefits and legal protection for the owners of the LLC. The most common Texas LLC is formed by small businesses, but Texas law allows four LLC types: domestic, professional, non-profit, and foreign.

DOMESTIC TEXAS LLC

A Domestic Limited Liability Company is used by small businesses and joint ventures. Provided the LLC is formed for a legal purpose, it has very few legal restrictions on what the business must be. This flexibility makes it the most popular LLS in Texas.

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.

2. Professional Texas Limited Liability Company

Licensed professionals, such as physicians, lawyers, and architects can create a Professional Limited Liability Company to be the business entity under which they provide their licensed services. Like the domestic LLC, there are tax and legal advantages to creating the LLC. However, a professional LLC is limited to only providing those services for which the owners have professional licenses.

NON-PROFIT TEXAS LLC

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.

Non-profit LLC entities are also used for groups like fraternities and trade associations. Just remember that getting formed as a nonprofit under Texas state law does not automatically qualify the entity for tax exempt status. Consult with your accountant to ensure you make the right tax elections.

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.