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Importance of Operating Agreement
- An operating agreement details LLC’s organizational structure and operational procedures. Topics covered include ownership and management structure. While these provisions might not influence day-to-day operations, they must be included for legal reasons.
- Ownership: The operating agreement details who the members are and how ownership is divided, be it a sole proprietorship or LLC. Sole proprietorship refers to a single person with total control over a business, also known as a single-member LLC. Multi-member LLC members can have either equal or varying ownership interests.
Requirements for Texas LLC Operating Agreement
- Texas does not require you to create an operating agreement when you have an LLC. The majority of states require that all businesses be incorporated in order for them to verify the business structure. You can skip this step in Texas, and the LLC is not subject to any legal penalties.
- An operating agreement is a legally binding document that outlines a limited liability company‘s ownership structure, management, and operational procedures (LLC). It governs the internal workings of the LLC and establishes the rights, responsibilities, and obligations of its members (owners) and managers.
Key Elements of Texas LLC Operating Agreement
- In Texas, an LLC operating agreement should include the following key elements: Formation details of the LLC. The name and Texas address of a registered agent, who is designated to receive legal documents on behalf of the business. The term of the LLC. The purpose of the business. The business location.
Filing Requirements for Texas LLC
- Filing a certificate of formation with the Texas Secretary of State is the first step to creating an LLC. A certificate of formation generally only provides basic information. An operating agreement outlines key structures and procedures of the business.
- If you file your LLC by mail, it will be approved in 4-8 weeks (plus mail time). But if you file online using SOSDirect, your LLC will be approved in 10-12 business days. Texas law offers robust asset protection to LLCs, making it an attractive option for business owners.
