The limited liability company, or LLC, is a type of legal structure that is popular among small businesses. Compared to a sole proprietorship or simple partnership, an LLC provides some important protections for the individuals involved, so that the owners of the company can’t be held personally liable for all the company’s debts. However, forming an LLC does require some formalities. The process is not as complicated as the one involved in starting a corporation, but forming an LLC takes careful preparation.
Choosing a registered agent
One of the requirements for forming an LLC under Texas law is to choose a registered agent. This means appointing one person or company who will receive tax notifications, legal notices and any other legal documents on behalf of the LLC. This registered agent must have a street address in Texas where they are available during regular business hours so that they can receive certified mail or accept physical service of any legal document that requires that formality.
If you have just recently decided to go from having a sole proprietorship to forming an LLC, you may wonder what this is all about. After all, one of the advantages of an LLC over a sole proprietorship is that the LLC shields you from some of the company’s liability. However, Texas law recognizes that there are times when others need to contact a human being and not just a business entity. The registered agent serves the role of this necessary human being.
If you are starting an LLC, you can list yourself or one of your business partners as registered agent, or you can hire another person or entity to act as registered agent. If your agent is an individual, they must be 18 or older and a resident of Texas. They must formally accept and consent to the appointment in writing, and the business must keep this document in its records. Some attorneys act as registered agents for their clients’ LLCs. Some companies offer a service in which they act as registered agents for customers.
