A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, so you should read the relevant state statutes if you are interested in forming an LLC.
Owners of an LLC are called members. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit single-member LLCs—those having only one owner.
A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for additional information. There are special rules for foreign LLCs.
In Texas, a Limited Liability Company (LLC) is a popular business structure due to its flexibility and protection for its owners, known as members, from personal liability. The Texas Business Organizations Code governs the formation and operation of LLCs in the state. Texas does not restrict ownership, so members can include individuals, corporations, other LLCs, and foreign entities, with no limit on the number of members. Single-member LLCs are also permitted in Texas. Certain businesses, such as banks and insurance companies, may not be structured as LLCs in Texas. Those interested in forming an LLC in Texas should file a Certificate of Formation with the Texas Secretary of State and comply with any other state-specific requirements, such as creating an operating agreement and obtaining necessary business licenses or permits. Additionally, LLCs must consider federal tax regulations, as they can choose to be taxed as a sole proprietorship, partnership, or corporation. Foreign LLCs that wish to do business in Texas must register with the state and adhere to specific rules applicable to them.
