Choose a Business Structure and Unique Business Name For LLC in Texas

Decide on a Business Structure

While it might not seem like an integral part to starting a business, you have to decide on the organization of your business beforehand. Your chosen structure will affect the following:

  • How much you pay to the government in taxes and whether you have avenues through which you can reduce the amounts payable. Some structures offer more flexibility than others and are thus preferred for this reason.
  • How liable you are in case something happens during the carrying out of business activities. For example, if you do not pay your suppliers on time for some reason, how much can they take from you? Can they come after your personal assets?
  • How long your business remains in operation. Some structures are only operational for as long as their owners are alive. In the case where the owner dies, the business also comes to an end. If you would rather ensure that the operations continue even after you’re gone, you need to consider this outcome.
  • How much you own in the business. Some people would rather own the whole business while others would prefer to share. Sharing comes with the benefits of shared risks such that you do not have to take on financial burdens on your own. However, it also means that you get to have less of the profits made. There are pros and cons to having people own a business with you and you need to consider all these.
  • How you manage the operations. Some structures operate under strict guidelines provided by the law. A good example would be a corporation where you need to hold meetings and write minutes to abide by the law. Other structures are more freestyle in the dispensing of their duties and have more flexibility in operations. When choosing an entity, you have to understand just how much work goes into keeping it afloat and if you can manage the laid-out tasks.
  • How you can bring others into the operation. Suppose you would want to bring more people to work with you, the entity choice determines the possibility of this. For example, some operate under guidelines of restricted membership. That means that after you get to a certain number of people, you cannot admit more people into the venture. Also, note the rules that pertain to the transferring of interests. If you want to give someone a share in the business, how hard would this be?

What structure of companies can I register in Texas?

Below are the applicable options in the state:

  • Sole Proprietorship – most people choose this option as it operates under the fewest guidelines. You can start a business under this structure as you and the business would be one entity, thus reducing the load of paperwork. Your processes do not have to be formal and you can do as you please as long as you are within the bounds of the law. On the downside, if anything goes wrong, the court can come after what belongs to you. After all, there is no distinction between you and the business, which can be quite risky.
  • Partnership – people also choose to come together when carrying out business operations. Where two or more people come together for such a purpose, they need to draft an agreement that clearly states their roles and responsibilities. However, it is important to note that the state does not require this in writing. People draft it, though, to be on the safe side in case things do not work out as expected. Members of these setups can either be fully or partially liable for expenses accruing from their business operations. It is important to look at the kind of membership in play and what this means for you.
  • A Corporation – unlike the first two setups, in this case, you create a separate legal person whose activities do not tie to you. This structure can continue in perpetuity fueled by the operations of its owners who get to enjoy limited liability. Members of such organizations own shares which they can transfer to other people. The management of such an entity takes place under directors who steer the organization in a direction that pleases the members.
  • Limited Liability Company (LLC) – this option has also become common in recent years, with people having seen the many ways it can benefit its owners. It is quite similar to a corporation only that it has fewer guidelines regarding management of the business. In this case, people who own shares are known as members and they enjoy limited liability as the entity is a separate legal person.

For all of these businesses, you can choose to work under an assumed name, known as a DBA or “Doing Business As” name. Ensure that you get the right paperwork for this by filing this name with the state.

Given the complexities surrounding all these entities, it is helpful to engage a professional who can help you in making the right choice, all implications considered.

How an LLC and a Corporation are Different?

When choosing between these structures, you will notice that they have more in common than they share in differences. Even so, it helps to note that their disparities are their selling points as follows:

LLC vs. Corporation

For an LLC, owners have limited work regarding the maintenance of the entity as the annual requirements tend to be quite few. Additionally, they can choose how they would like to get taxed, enabling them to choose the entity with the most benefits.

A corporation, on the other hand, has a lot of work meted out on its owners who have to hold meetings and draft minutes to keep up with regulations. Also, they are subject to taxes on corporate profits.

Why is LLC the best option for fast company formation?

Going for this entity is one of the best decisions you can make for your business due to the following reasons:

  • You can avoid double taxation by embracing the pass-through taxation option available to people operating under this structure. There is no reason why you should pay more than is necessary.
  • The structure also has less formality and you can decide how to run your operations as long as you do so legally. Nobody requires you to come up with records of your meetings or even hold any as long as you agree with other members on this.
  • It helps that LLC owners write the rules of their operations and thus have a major say in what goes on in their companies. Not having someone looking over your shoulder is quite a relief to many entrepreneurs.
  • Finally, there is the added benefit of protecting personal assets from litigation in the event that someone sues your business. Even if the lawsuit is successful, you have a high chance of holding onto what personally belongs to you.

Unique name for business

Your Texas entity name must be distinguishable from others as this allows the state to keep track of your records. Without a unique identifier, your registration process will stall and you will be back to the drawing board. Here is how you can ensure that you get it right from the start:

How to create a unique business name for LLC in Texas?

You should have about five unique business name ideas in mind when starting this process. All these should relate to the brand you want to present to your target audience and you can generate them through brainstorming or using a unique business name generator.

Next, you need to do a name search on the state company name search database to ensure that what you have in mind is available. It also helps to check if the associated domain is in use; in case you would like to start a website with the chosen name.

What does LLC mean after a company name?

It stands for Limited Liability Company and you must include this in your name’s suffix. If you would rather skip the long name or use another abbreviation, you can use the following alternative LLC after name company:

  • Limited Company
  • L.L.C.
  • L.C.
  • LC

What words cannot be used in a company name?

The state is clear about the words you cannot use in your name and these are presented in this document. Additionally, the naming should adhere to the following guidelines:

  • It should include LLC or the aforementioned alternatives as part of its suffix
  • It should not include wordings that make it relatable to a lottery, or indicate that it could have dealings with such practices
  • It should not imply that your operations are illegal
  • It should not make people think that your operations gear towards helping people who have fought in wars and should thus not include wordings that imply the same
  • It should not mislead the general public into thinking they can get government services from you
  • It should not be similar to other LLC names in the state, including those that have been reserved
Best LLC Service in Texas
Zen Business has the best bang for your buck out of all LLC services online.
There are dozens of services that form an LLC, but ZenBusiness has proven themselves as the best LLC services available.

Business Name Reservations

What is a Business Name Reservations In Texas?

Once you ensure that your name can go through the registration process (i.e. is unique and follows the stipulated guidelines), you can reserve it. This revelation online name reservation ensures that nobody else can use it and enables you to prep your registration documents with peace of mind. It remains in place for 120 days and you can renew it as needed.

Need or not to reserve a name for the company in Texas?

The state does not require you to do a name reservation. However, doing so comes with a hoard of benefits. For one, you can keep it safe until you are ready to start the registration process. For example, if you want to start a business but are yet to make some major decisions, draft the paperwork or come up with the funds, you can start with reserving the name. It ensures that if someone else comes up with the same idea, they cannot use it, thus reducing your haste in the processes. Additionally, this process is simple and you do not have to jump through hurdles to get it done.

How do I reserve a business name in Texas?

You have two options here. If you are doing it the first time, you choose the ‘New Application’ option. Where you are renewing the service, you use the ‘Renewal’ link. After this, all you do is show the type of business you would like to form and fill your name and address before indicating the date of filing.

How long can I reserve a business name in Texas?

The reservation processing time is 5-7 business days, after which you can either get approval or rejection. If it goes through, the reservation will remain in effect for 120 days. You can renew the service for 30 days when the deadline gets close and you are not ready to go through with the subsequent processes.

How much does it cost to reserve a business name in Texas?

The state requires you to pay a $40 filing fee which is not refundable. It is thus important that you ensure that the process will go through by adhering to the aforementioned guidelines. Else, you will end up paying for the service more than once. Please note that you also have the right to withdraw the name if need be. For this, no fees are applicable. All you have to do is file a notice of withdrawal with the state. Alternatively, you can wait for the time to lapse and the name will be available to other people who may wish to use it.

You can also transfer the name by filing a notice of transfer with the state, which will cost you $15. Please note that this cannot take place online and you must submit a physical form.

Where do I apply for a company reservation in Texas?

You can do so via the following means:


You can file the Application for Reservation or Renewal online at Texas SOSDirect.


Send the complete form to:

Secretary of State
P.O. Box 13697
Austin, TX 78711