The Common Law

I'm starting my own event-planning company and need to form an LLC. How do I do it? Do I need to hire a lawyer?

It sounds like you have researched the different options for the structure of your new business – if not, read the "Common Law" columns from the previous two weeks for discussions on the basic differences between a general partnership, corporation, and limited liability company – and decided on an LLC. There are several basic steps to forming an LLC in Texas.

The first step is to decide on the LLC's business name. The name of the LLC cannot be the same as the name of another business entity already on file with the Texas secretary of state. You can verify that your proposed business name is available by calling the Texas secretary of state (463-5555) or by e-mailing [email protected]. Do not start investing in your company's new name (letterhead, business cards, domain name, etc.) until you verify that the preferred name is actually available. If your preferred business name is already taken, you could still be able to use the name if the other entity consents in writing, which may be unlikely, so in order to avoid confusion and additional hassle, it is often better to avoid using the name of an already existing company. The last words of the company name must reference the limited liability nature of the company ("limited company," "LLC," etc.).

The next step is to file articles of organization with the Texas secretary of state's office. The standard fee for filing the AO and creating the LLC is $300. Texas law requires very specific information in the AO, including the company name and name and street address of the registered agent (check www.sos.state.tx.us and the Texas Business Organizations Code Chapters 3 and 101 for AO requirements and general LLC information).

You can form the LLC yourself. Texas law allows anyone 18 years or older to form an LLC by signing the AO and delivering an original and a copy to the Texas secretary of state (just be sure the AO contains all the necessary information). Alternatively, you can hire a lawyer to create the LLC for you. Another option is to use an online service that provides forms to help guide you through the process of creating the LLC. Read next week's "Common Law" to learn more about issues concerning operation of your LLC.