INSTRUCTIONS FOR FILING A

CERTIFICATE OF FORMATION FOR A LIMITED LIABILITY COMPANY

(Forms 205/206)

• Commentary: The limited liability company [hereinafter LLC] is neither a corporation nor a partnership; rather, it is a distinct type of entity that shares the characteristics and powers of a corporation and a partnership. The owners of a LLC are called "members"; the provisions relating to the management of the affairs of the LLC are contained in the "company agreement." Members may be individuals, partnerships, corporations, and any other type of legal entity.
• A LLC may be created with the general purpose of conducting any lawful business or to provide a professional service. If the LLC is to render a professional service that requires the issuance of a license, such as nursing, legal services, or other professional services that require as a condition precedent to the rendering of the service the obtaining of a license, it would be formed as a professional limited liability company [hereinafter PLLC]. This electronic form may be used to file a certificate of formation to create either a LLC or PLLC under the provisions of the Texas Business Organizations Code (BOC).

�         Series LLCs: This web form is not specifically designed to authorize the formation of the LLC as a series LLC. A series LLC, formed under Texas law, is a LLC that provides in its governing documents for the establishment of a series of members, managers, membership interests, or assets that have separate rights, obligations and liabilities and business purposes from the general LLC. Each individual series has the ability to sue and be sued, enter into contracts, hold title to assets, and grant liens or security interests in its assets.

• Web Form and Content: The web form promulgated by the secretary of state is designed to meet minimum statutory filing requirements and no warranty is made regarding the suitability of this form for any particular purpose. This form and the information provided are not substitutes for the advice of an attorney and it is recommended that the services of an attorney be obtained before preparation of the certificate of formation.

Certain statutorily required provisions have been drafted with standard pre-printed statements. For example, a general purpose LLC formed by using this form would have a general purpose as a pre-printed statement of purpose. If a more specific purpose is required under other law, including the Internal Revenue Code, use the additional space provided in the �Supplemental Provisions and Attachment Screen� to set forth a more specific purpose.

During the web filing process, you will be directed from screen to screen to provide certain variable information with which to populate the form. After entry of the information, a document image will be displayed for your review. Please review the document carefully for accuracy before submission.

• Fee: The statutory fee of $300 must be provided before the filing is submitted (BOC � 4.154). Payments for web filings may be made by credit card or client account. Selection of the payment method is performed during the subscriber login process. Fees paid by credit card are subject to a statutorily authorized convenience fee of 2.7% of the total fees. To view the available balance in your client account, select the Account tab from the navigation bar and select "Client Account Statements" from the Account Maintenance Menu.
• Entity Name and Type Screen: Before entering your proposed company name, you must first select the type of LLC you intend to form. Selection of the organization type will determine the content of the electronic form as well as the variable information you will be asked to provide. If the LLC is to provide a licensed professional service, then you must select option 2, Professional Limited Liability Company as the organization type. You may wish to contact the licensing agency or regulatory board to determine any other requirements relating to licensing the business entity/individual providing the professional service. If the company will not be engaged in providing a licensed professional service, you may proceed to entry of the name of the entity since a general-purpose limited liability company [LLC] is set as the default selection.
• Company Name- Option 1 (Limited Liability Company): If option 1 is selected, the name must include the words �Limited Liability Company� or �Limited Company� or an acceptable abbreviation of such terms. The words �Company� or �Limited� or the abbreviations �Co.� or �Ltd.� alone are unacceptable to satisfy the requirement that the name contain an organizational designator.
• Company Name- Option 2 (Professional Limited Liability Company): If option 2 is selected, the name must include the words �Professional Limited Liability Company� or an accepted abbreviation of such terms. The PLLC may not adopt any name contrary to the ethics of the profession being organized. Many professions require that the name of the professional be included in the entity name. Consult the regulatory board and the rules of ethics governing the profession prior to filing the certificate of formation.

After entering a name, you may wish to conduct a preliminary search of the name by clicking on the "Name Availability Search" button.

• Name Availability Search Option: Under section 5.053 of the BOC and the administrative rules adopted by the secretary of state, if the name chosen is the same as, deceptively similar to, or similar to the name of any existing domestic or foreign filing entity, or any name reservation or registration filed with the secretary of state, the document cannot be filed. The administrative rules adopted for determining entity name availability (Texas Administrative Code, title 1, part 4, chapter 79, subchapter C) may be viewed at the secretary of state web site by clicking on the Texas Register icon.

Do not presume that the name searched is "available" and will be approved for filing. Even if you believe the results do not reveal the same or deceptively similar name in use, the Office of the Secretary of State must still perform its own search after receipt of the document. A final determination regarding the entity name is not made until an examiner's review and filing of the document. You are strongly urged not to make financial expenditures or regulatory filings based upon the results of your search.

If you wish our office to provide a preliminary determination on the availability of the proposed name before submission, you may do so by telephone at (512) 463-5555, by dialing 7-1-1 for relay services, or by e-mail to [email protected]. This is only a preliminary clearance. Also note that the preclearance of a name or the issuance of a certificate under a name does not authorize the use of a name in violation of another person's rights to the name.

�         Registered Agent And Registered Office Screen: The registered agent can be either: (1) a Texas corporation or other entity such as a limited liability company, limited partnership, partnership, or other legal entity organized under the laws of this state, or a foreign corporation or other foreign entity authorized to transact business in this state; or (2) an individual resident of the state. The LLC cannot act as its own registered agent; do not enter the LLC name as the name of the registered agent.

Registered Office Address Requirements: The registered office address must be located at a street address where service of process may be personally served on the entity�s registered agent during normal business hours. Although the registered office is not required to be the entity�s principal place of business in Texas, the registered office may not be solely a mailbox service or telephone answering service (BOC � 5.201). The registered office address must be an address that is generally open during normal business hours so that the registered agent may accept service of process.

�         Consent of Registered Agent Option: Effective January 1, 2010, a person designated as the registered agent of an entity must have consented, either in a written or electronic form, to serve as the registered agent of the entity. The designation or appointment of a person as the registered agent by an organizer is an affirmation by that official that the person named in the instrument has consented to serve as registered agent. (BOC � 5.2011, effective January 1, 2010)

A copy of the agent�s written or electronic consent does not need to be submitted with the certificate of formation; however, the organizer is provided with the option of including a copy of the agent�s written or electronic consent as part of the certificate of formation filing.

• The radio button on the screen is preset to an option that permits the user to continue with the filing without attaching a copy of the registered agent�s consent. When this option is marked, the certificate of formation will show selection of a pre-printed statement that indicates that the entity has retained a copy of the consent of registered agent.
• Select the radio button �Consent Attached� to include a copy of the person�s consent to serve as the entity�s registered agent.
• If you selected the option �Consent Attached,� the next screen will be the Consent attachment screen. The copy of the agent�s consent would be attached as an electronic file; the attachment must be in TIF, TXT, or PDF file format to be accepted.
• If you decide not to include the consent of the registered agent and do not wish to provide an attachment, click Continue to proceed to the next screen. If you proceed to the next screen without providing an attachment, the certificate of formation will show selection of a pre-printed statement that indicates that the entity has retained a copy of the consent of registered agent.

• Governing Authority Screen: A limited liability company may be governed or managed by managers or management of the limited liability company may be reserved to the members of the company. The default management type is set as manager-managed. If the LLC will not have managers and is to be managed by its members, then you must select the alternative management type on the management screen.

If the company is to be managed by managers, provide the name and address of each manager. Managers of a manager-managed LLC need not be residents of the state or members of the LLC, unless required by the LLC's company agreement. If the LLC is to be managed by its members, provide the name and address of each member. If a member or manager is not an individual, provide the full name of the legal entity in the space provided for a legal entity name.

Only one manager or member is required. Press the "Add Manager/Member" button to initiate the entry of management name and address information. After entering the information, click on "Update" to return to the Governing Authority Screen to continue. You may edit or delete the manager/member information displayed in the grid by clicking on the appropriate button.

• PLLC [Option 2 Selected] Restrictions: Title 7, chapter 301 of the BOC establishes certain restrictions and requirements regarding ownership and management of a PLLC. Only a professional individual or professional organization may be an owner or manager of a PLLC. Only a professional individual may be an officer of a PLLC. A professional individual is an individual who is licensed to practice the same professional service as the PLLC. A professional organization is a person other than an individual that renders the same professional service as the PLLC only through owners, members, managerial officials, employees, or agents, each of whom is a professional individual or professional organization.

• Purpose Screen-PLLC [Option 2 Selected]: A "professional service" is defined as any type of personal service that requires that the person providing the service obtain a license prior to rendering that service. This includes the personal services of an attorney, architect, certified public accountant, dentist, doctor, podiatrist, nurse, psychologist, family therapist, or insurance agent. The statement of purpose should be specific. Do not state that the PLLC is organized for all lawful purposes for which a professional limited liability company may be formed.
• Single Purpose: Pursuant to section 2.004 of the BOC, a professional entity may engage in only one type of professional service, unless the entity is expressly authorized to provide more than one type of professional service under state law regulating the professional services.

• Joint Practice by Certain Professionals: Pursuant to section 301.012 of the BOC, the following professionals are permitted to jointly form and own a PLLC to perform a professional service that falls within the scope of practice of those practitioners.

• Doctors of medicine and doctors of osteopathy may jointly form and own a PLLC with persons licensed as podiatrists by the Texas State Board of Podiatric Medical Examiners to perform professional services that fall within the scope of practice of those practitioners.
• Persons licensed as physicians under Subtitle B, Title 3, Occupations Code, and persons licensed as physician assistants under Chapter 204, Occupations Code, may form and own a PLLC to perform professional services that fall within the scope of practice of those practitioners
• Professionals, other than physicians, engaged in related mental health fields such as psychology, clinical social work, licensed professional counseling, and licensed marriage and family therapy may form a PLLC that is jointly owned by those practitioners to perform professional services that fall within the scope of practice of those practitioners.
• Doctors of medicine and doctors of osteopathy may jointly form and own a PLLC with persons licensed as optometrists or therapeutic optometrists by the Texas Optometry Board to perform professional services that fall within the scope of practice of those practitioners. Only a physician, optometrist, or therapeutic optometrist may hold an ownership interest in a PLLC formed for the joint practice of medicine or osteopathy and optometry or therapeutic optometry.

Please note that a professional listed in paragraph (1) may not jointly form and own a PLLC with a professional described in paragraphs (2) or (3).

The state agencies exercising regulatory control over professions to which these joint practice provisions apply continue to exercise regulatory authority over their respective licenses.

�         Supplemental Provisions and Attachments Screen: Additional space has been provided for the entry of additional text to an article within this form or to provide for additional articles to contain optional provisions. You may enter the additional text in the space provided for "Supplemental Provisions/Information" or you may attach the additional provisions by following the instructions for attaching an electronic file or files as part of the submitted document. If a letter of consent for the use of a similar name has been required, then the letter of consent must be sent as an attachment to the document being submitted. Attachments must be in TIF, TXT, or PDF file format to be accepted.

• Duration: Pursuant to section 3.003 of the BOC, a Texas LLC exists perpetually unless provided otherwise in the certificate of formation. The duration of a LLC created through the use of this web form is perpetual. If formation of a LLC with a stated period of duration is desired, do not use this form. Please complete form 205 (LLC) or form 206 (PLLC), as applicable, which can be found on the SOS web site index of forms page and submit by mail, fax or personal delivery.
• Organizer Screen: As only one organizer is required for the formation of a LLC or PLLC, the web filing is designed to accommodate only one organizer name, address, and signature. An organizer may be a natural person 18 years of age or older, or any corporation, partnership, or other entity; there are no residency requirements for an organizer. In the case of a PLLC, an organizer need not be licensed to render the professional service to be rendered by the PLLC. Provide the full name and street or mailing address of the organizer in the space provided.

   

  If the PLLC is formed and owned jointly by a physician and physician assistant, the organizer must be a physician and must ensure that a physician or physicians control and manage the PLLC.
• Execution Screen: The organizer must sign the certificate of formation. An organizer signs the electronic document by typing the organizer�s name in the field provided. If the organizer is a legal entity such as a corporation, a person authorized to execute documents on behalf of such entity must sign the certificate of formation. In this case, type the name and representative capacity of the person signing on behalf of the entity. For example, Jane Esquire, President of ABC Business Organizers, Inc.
• Delayed Effective Date: A certificate of formation becomes effective when filed by the secretary of state. However, pursuant to sections 4.052 and 4.053 of the BOC the effectiveness of the instrument may be delayed to a date not more than ninety (90) days from the date the instrument is signed. Please note that on the filing of a document with a delayed effective date, the computer records of the secretary of state will be changed to show the filing of the document, the date of the filing, and the future date on which the document will be effective. In addition, at the time of such filing, the status of the entity will be shown as �in existence� on the records of the secretary of state.
• Document Display Screen: After completing the entry screens, the system will display an image of the document for purposes of your review. Please review the document carefully for accuracy. Please note that a person commits an offense under section 4.008 of the BOC if the person signs or directs the filing of a filing instrument the person knows is materially false with the intent that the instrument be delivered to the secretary of state for filing. The offense is a Class A misdemeanor unless the person�s intent is to harm or defraud another, in which case the offense is a state jail felony.

�         Edit Filing: If the document must be corrected, click on the "Edit Filing" button to return to the entry screens. Do not use the back button to return to prior screens, as this will not update or revise the information contained in the filing. If you wish to retain a copy of the document you are submitting, use the printer function of your browser to print the screen.

�         Cancel Filing: Click on the "Cancel Filing" button to terminate the electronic filing process.

�         Submit Filing: You must click on the "Submit Filing" button to transmit the document. You will receive a message confirming receipt of the filing that contains the session ID and the document tracking number of the document transmitted. You may wish to attach this receipt notice to your retained copy.

• Franchise Taxes: State franchise tax information may be obtained from the Comptroller of Public Accounts, Tax Assistance Section, Austin, Texas, 78774-0100, (512) 463-4600 or (800) 252-1381. The Corporations Section home page provides links to the IRS and Texas Comptroller web sites.