I received a call from a local broker who I’ve known for years. I’ve been pushing her to change her business entity from a Sole Proprietorship to a Limited Liability Company. She finally got around to thinking about it. She spoke to her attorney who quoted her $750 plus filing fees of about $310 and an annual fee of $150 to serve as the Registered Agent.
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I told her she could file the documents herself and not only save the $750 but the $150 annual Registered Agent fee as well.
Note the following does not constitute legal advice. Always seek legal advice prior to setting up any entity as there are pros and cons to each of them.
Since she had decided to file as a single member Limited Liability Company, she needed to gather some basic information. We would need the following:
- Company Name and Address
- Name and Address of the Registered Agent (her in this case)
- Names and Addresses for all Members (her in this case!)
- Credit Card for the $300 Filing Fee
The hardest part in Texas is making sure you can use a company name. You can pay to search but I search them at no cost on the Texas Comptroller’s Website.
Let me explain what makes this interesting. I own Realty Revolution LLC. If someone wants to form a company called Realty Revolution REO Services LLC, their application will be rejected because the name is similar to one already in use. What I usually do is search on the first two words to see what comes up. If other companies are using the name, you can check to make sure they are in Good Standing. If not, you can usually get the name.
The lesson in this is to stay in Good Standing by filing the annual Franchise Tax Return and the Company Information Report!
Once you’re certain the name is available. Visit the Texas Secretary of State’s Website. On your first visit, you’ll need to file a request to set yourself up as a user. Once you have a User ID and Password you can log onto SOS-Direct and file your application online.
She needs to file for an EIN with the IRS. This can be done online at the IRS Website. Since this is a real estate brokerage, she also needs to apply for an LLC Broker License. Visit the Texas Real Estate Commission Website for details.
Going through a web filing step-by-step is beyond the scope of this blog. If you have real problems, contact me and I will assist you.
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