How to Form a Texas LLP — Step-by-Step

Your LLP's name has to do two things: signal that it's a limited liability partnership and be distinguishable from the names already on file with the state.

The designator requirement

A Texas LLP's legal name must include a phrase or abbreviation identifying it as a limited liability partnership — "limited liability partnership," "L.L.P.," or "LLP." This tells the world, and anyone extending credit or signing a contract, that they're dealing with a registered partnership carrying the liability shield.

Checking availability

Search the state's records through SOSDirect before you file. The Secretary of State charges a small per-search fee for name availability checks. Search your exact proposed name and near variations. Names that differ only by punctuation, spacing, or filler words like "the" or "and" may not be treated as distinguishable, and a conflict means the state can reject your registration and cost you time.

Naming rules to watch

• The name must be distinguishable in the records from other registered entity names.
• Certain words — those implying banking, trust, insurance, or a government agency — may require additional approval or be off-limits.
• Names for professional partnerships may be subject to the naming conventions of the relevant licensing board.

Assumed names (DBAs)

If the firm will operate under a name different from its registered legal name, you'll file an assumed name certificate (Form 503) with the Secretary of State. In Texas an assumed name registration for an entity can run for up to ten years. This is separate from the LLP registration itself.

Before you file, decide who will serve as the partnership's registered agent, because the agent is named in the registration and has to consent to the role.

Texas requires every LLP to continuously maintain a registered agent with a physical Texas street address — the registered office — where legal process and state notices can be delivered. The agent must be available during normal business hours.

Who can serve

• A partner or employee: Anyone with a Texas street address who is reliably available during business hours. The tradeoff is that the address becomes part of the public record and compliance depends on that person being reachable.
• A commercial registered agent service: A firm licensed by Texas to serve in the registered agent role. This keeps partners' personal addresses off the public filing, guarantees continuous availability, and consolidates state and legal mail so nothing is missed.

Texas requires the designated agent to have consented to serve. When we handle your filing and provide agent service, that consent is handled as part of the process.

The filing that actually creates your limited liability partnership status is the Application for Registration of a Limited Liability Partnership, filed with the Texas Secretary of State. You can submit it online through SOSDirect, through the SOSUpload portal, or by mail.

What the application includes

• Partnership name, including the required LLP designator.
• A statement that the partnership is registering as a limited liability partnership.
• The registered agent's name and Texas registered office address.
• The number of partners as of the date of filing.
• A brief description of the partnership's business or the activity it engages in.
• The address of the partnership's principal office.

Notice what's not there: you don't file the partnership agreement, disclose each partner's ownership percentage, or attach financial statements. The registration is a short document whose job is to put your LLP status on the public record and switch on the shield.

Timing

Standard processing takes the state's usual turnaround; expedited handling is available for an additional fee if you're on a deadline. The partnership does not have LLP liability protection until the registration is effective, so file before you take on major obligations if the shield is the reason you're registering.

The partnership agreement is the internal governing document of your LLP — the equivalent of an LLC's operating agreement, but for a partnership. Texas doesn't require you to file it with the state, and it stays private, but you should have a written one before you're deep into doing business.

Why it matters even more in a partnership

When two or more people share ownership, the questions that cause disputes are inevitable: how profits and losses split, who can bind the firm to a contract, what happens when a partner wants out or dies, how new partners are admitted, and how disagreements get resolved. If you don't answer them in writing, the default provisions of the Texas Business Organizations Code answer them for you — and the defaults, such as equal profit sharing regardless of contribution, often aren't what the partners actually intended.

What a solid partnership agreement covers

• Ownership and capital: each partner's contribution and ownership interest.
• Profit and loss allocation and how and when distributions are made.
• Management and authority: which partners can bind the firm and what decisions require a full vote.
• Admission and withdrawal of partners, and buy-out terms.
• Dissolution: how the firm winds up and how assets are divided.
• Dispute resolution and succession on a partner's death or disability.

This is the document your attorney should help you get right; the economic and control terms are too important to improvise.

An Employer Identification Number is a nine-digit federal tax ID issued free by the IRS. A partnership needs one regardless of size — because a multi-owner partnership files its own federal return, you can't run an LLP on a single person's Social Security number.

Why the LLP needs an EIN

• A partnership files an information return (Form 1065) and issues Schedule K-1s to the partners, all of which require an EIN.
• Banks require an EIN to open a partnership account.
• You'll need it to hire employees and to handle payroll and state tax accounts.

How to apply

Submit your request online using the IRS EIN Assistant, found at IRS.gov. Expect the form to take roughly ten minutes; the EIN is granted on the spot, ready to use that same day. The online process requires a responsible party with a US Social Security number or ITIN; applicants without one apply by fax or mail using Form SS-4.

Keeping the LLP's money separate from the partners' personal money isn't optional — it's part of what keeps the liability shield credible. Mixing personal and partnership funds gives a court a reason to disregard the structure.

What banks typically ask for

• The filed Application for Registration (your confirmation from the Secretary of State).
• The IRS EIN confirmation.
• The partnership agreement — many banks want to see who has authority to act for the firm.
• Government-issued ID for each authorized signer.

Community banks and credit unions are often more flexible with new partnerships than large national chains. Compare monthly fees, transaction limits, and minimum balances before choosing, and set up the account before money starts flowing so every dollar runs through the firm from day one.

Most of the work is front-loaded in registration. After that, the recurring duties are lighter than in many states — but they're different from what people expect, because Texas splits them between two agencies.

Franchise tax and information report — through the Comptroller

Texas does not require a Secretary of State annual report. Instead, your LLP is subject to the state franchise tax, administered by the Texas Comptroller of Public Accounts. Each year you file a franchise tax report and the associated information report, generally due May 15. Many small partnerships fall under the no-tax-due threshold and owe no franchise tax, but the report still has to be filed to stay in good standing. Missing it can lead to loss of the right to transact business and eventual forfeiture.

Keep the registration and agent current — through the Secretary of State

Maintain your registered agent and registered office at all times. If the agent changes, resigns, or moves, file a change with the Secretary of State promptly. An out-of-date agent leaves the LLP technically non-compliant even when the franchise tax report is filed.

Federal taxes and licenses

Federally, the LLP files Form 1065 and issues K-1s; each partner reports their share on their personal return. Texas has no personal income tax. If you sell taxable goods or services, register for sales tax with the Comptroller. Professional partnerships must keep the underlying professional licenses current, and local governments may require their own permits.