Form 205 – Certificate of Formation – Limited Liability Company

Jurisdiction: Country: United States | Province/State: Texas

What is a Form 205 – Certificate of Formation – Limited Liability Company?

Form 205 is the Texas filing that creates a new domestic LLC. It is your entity’s birth certificate. You file it with the state to bring your LLC into legal existence. Before filing, you may have a plan or a name. After filing, you have a real company with limited liability protections.

You typically use this form if you are starting a business in Texas. That includes one owner or many owners. It also includes a holding company for assets. Many real estate investors use it for rental properties. Consultants and freelancers use it to separate personal and business risk. Startups choose it to organize ownership and seek investment. You also use it for a Texas series LLC. A series LLC is an umbrella LLC with separate series inside it.

You need this form to get the legal benefits an LLC offers. An LLC protects owners from most business debts. It offers flexible tax options. It gives your business a formal name and structure. Banks, vendors, and clients expect that formality. Many contracts and licenses require it. You cannot get most state permits without it. You also need it to open a business bank account.

Form 205 covers the core facts about your LLC. It sets the name and legal type. It appoints a registered agent and office in Texas. It states who manages the company. It states your business purpose. It lists the organizer who signs the form. You can add extra terms if needed. Those terms live in a “Supplemental Provisions” section.

Here is how it works in practice. You choose a name that ends with “LLC” or “L.L.C.” You confirm the registered agent has agreed to serve. You decide if members or managers will run the company. You add names and addresses for those managers or members. You can use a general business purpose. You sign as organizer. You can set a delayed effective date if needed. Then you file the form and pay the fee.

If your business is a licensed profession, this form may not fit. Licensed professionals may need a professional LLC. You would use a professional certificate of formation for that. If your company will operate outside Texas only, this is also not the right path. Out‑of‑state companies instead make a different filing to register in Texas. Form 205 is for a new Texas LLC formed in Texas.

When Would You Use a Form 205 – Certificate of Formation – Limited Liability Company?

Use Form 205 when you want to start a new Texas LLC. That includes a single‑member LLC for a side business. It includes a multi‑member LLC for a small firm. It also includes a holding company for property or equipment. You file it before you sign leases or take on clients. You want the liability shield in place first.

You also use it when moving from a sole proprietorship to an LLC. In that case, you file Form 205 to form the LLC. Then you move your contracts and accounts to the new entity. If you are converting an existing Texas entity, you may pair this with a conversion filing. The conversion moves assets and liabilities into the new LLC. The Certificate of Formation is still required to create the LLC.

You may choose a series LLC if you need internal asset silos. Real estate owners use separate series for each property. E‑commerce operators use series for different brands. In that case, you add special series language in the form. You can create discrete series later by company action and records.

You file Form 205 if you want to raise funds into an LLC. Investors often prefer an LLC for pass‑through tax treatment. The form lets you set manager control. That can help with decision‑making. You can keep day‑to‑day control as the manager. Investors become members with defined rights.

You do not use Form 205 to change an existing LLC’s name. You would amend the certificate of formation for a name change. You also do not use it to register a non‑Texas LLC to do business in Texas. That requires a foreign registration. If you need a professional entity, you do not use Form 205. You would use the professional version for licensed practices.

Legal Characteristics of the Form 205 – Certificate of Formation – Limited Liability Company

Form 205 is a legal filing. It creates a new legal person separate from you. It becomes binding when the state accepts it. The filing fixes your entity details in the public record. Once filed, the LLC exists under Texas law. The liability shield then applies to new company acts.

Enforceability rests on compliance with Texas rules. The LLC name must meet naming rules. It must be distinguishable on state records. It must include “Limited Liability Company” or “LLC” or “L.L.C.” It cannot mislead the public. It cannot suggest government status. It cannot imply a licensed activity without approval.

Your registered agent and office anchor legal notice. The registered office must be a Texas street address. A P.O. Box alone is not allowed. The agent must consent to serve. You confirm this in the form. You must maintain this agent. If you fail to do so, you risk default notices. You also risk loss of good standing. Service of lawsuits relies on this agent.

Governance disclosures support clarity and reliance. You must choose member‑managed or manager‑managed. Then you list each initial governing person. You include names and addresses. This tells the public who has authority. It helps banks and counterparties confirm who can bind the company.

The purpose statement frames lawful activities. Most filers choose a general lawful purpose. That covers any legal business. Some activities are restricted or regulated. If you operate in a regulated field, add precise purpose limits. You may also need extra approvals outside of this filing.

A series LLC requires special notice. The certificate must state it is a series LLC. It must warn that liabilities can be kept in each series. This notice supports liability separation among series. The company must also maintain separate records for each series. Without records and notice, series protections may fail.

The organizer signs the form. The organizer does not have to be a member. The signature affirms truth and authority. Knowingly false statements can carry penalties. The filing fee must accompany the form. The state will not file without full payment.

The certificate of formation is public. Do not include private terms you want to keep confidential. Your internal company agreement governs ownership rights. It sets distributions and voting rights. It sets buyouts and restrictions on transfer. Do not rely on the certificate to manage those terms. Use a separate company agreement.

After filing, you must follow ongoing rules. Keep a registered agent. Make required tax filings. Keep business and personal funds separate. Sign contracts in the LLC name. These steps help preserve the liability shield. Courts can pierce the veil if you misuse the entity. Proper records and conduct reduce that risk.

How to Fill Out a Form 205 – Certificate of Formation – Limited Liability Company

Follow these steps to complete the form correctly. Keep your sentences and entries clear. Use legal names and full addresses. Check every detail twice before filing.

1) Gather core information

• Choose your LLC name with an approved ending.
• Decide who will manage the LLC.
• Select a registered agent and office in Texas.
• Draft your purpose statement.
• Decide on any special provisions.
• Pick an effective date, if delayed.
• Choose the organizer who will sign.

2) Complete Item 1: Entity name and type

• Enter the exact LLC name.
• Include “Limited Liability Company,” “LLC,” or “L.L.C.”
• Do not use banned words or phrases.
• Avoid implying you are a bank, insurer, or agency.
• The name must be distinguishable from other records.
• Example: “Mesa Canyon Holdings, LLC.”
• If the name uses symbols or punctuation, enter them exactly.

3) Complete Item 2: Registered agent and registered office

• Choose an agent type: individual or organization.
• An individual agent must be a Texas resident.
• An organization agent must be authorized to do business in Texas.
• Obtain written consent from the agent.
• You do not file the consent, but you must keep it.
• Enter the agent’s full legal name.
• Enter the registered office street address in Texas.
• A P.O. Box is not enough for the registered office.
• Confirm the agent’s consent by checking the consent statement.
• Do not use a virtual mailbox for the registered office.

4) Complete Item 3: Governing authority

• Choose member‑managed or manager‑managed.
• Member‑managed means owners run the company.
• Manager‑managed means appointed managers run the company.
• Banks often prefer manager names listed for authority checks.
• If member‑managed, list each initial member.
• If manager‑managed, list each initial manager.
• Include full names and street addresses.
• You must list at least one governing person.
• Use a physical or mailing street address. Avoid only P.O. Boxes.
• Add more names on an attached page if needed.
• Keep this list current in internal records.
• Public updates later require an amendment if the structure changes.

5) Complete Item 4: Purpose

• Use a general lawful purpose if appropriate.
• Sample: “The company may engage in any lawful business.”
• If you operate in a regulated field, state the limited purpose.
• Add licensing details only if required by law.
• Do not over‑narrow the purpose unless needed.
• A broad purpose gives you operating flexibility.
• If forming a series LLC, include the required series notice here.
• State that the company is a series limited liability company.
• State that liabilities of a series are limited to its assets.
• Confirm you will maintain separate records for each series.

6) Add Supplemental Provisions/Information (if needed)

• Use this area for optional clauses.
• Include liability limits for managers and members as allowed by law.
• Add indemnification provisions for governing persons.
• Add duration if you want a limited term. The default is perpetual.
• Add limitations on manager authority if needed.
• Add special voting or approval requirements for major actions.
• Add series LLC framework details if using a series structure.
• Attach extra pages if the section is lengthy.
• Use clear, plain language. Avoid vague terms.

7) Complete Item 5: Organizer

• Enter the organizer’s name and address.
• The organizer signs the form.
• The organizer can be you, your lawyer, or a service.
• The organizer does not have to be a member or manager.
• You can list more than one organizer if desired.

8) Choose the effective date and time

• The default is effective when filed by the state.
• You can set a delayed effective date.
• The delayed date can be up to 90 days after filing.
• You can also set a delayed time on that date.
• Use a delayed date if you need time to prepare.
• For example, align with a new quarter or lease start.

9) Execution: Sign and date

• The organizer signs the certificate.
• Use ink if filing on paper.
• Electronic filing will capture an electronic signature.
• The signature certifies the facts in the form.
• False statements can lead to penalties.

10) Include required attachments (if any)

• Attach a separate page for additional managers or members.
• Label each attachment with the LLC name.
• Include the series LLC notice in full if using a series.
• Attach any extra supplemental provisions.
• Keep attachments organized and legible.

11) Final review checklist

• Confirm the name includes an LLC ending.
• Confirm the registered agent consent is on file.
• Confirm the registered office is a Texas street address.
• Confirm governance choice and names are accurate.
• Confirm the purpose is correct and broad enough.
• Confirm any series language is complete and clear.
• Confirm the organizer’s name and signature are present.
• Confirm the effective date choice is correct.
• Confirm all pages are complete and consistent.

12) File and pay the fee

• File the certificate with the state filing office.
• You can file online or by mail or in person.
• Include the required state filing fee.
• The standard fee for a Texas LLC is $300.
• Processing times vary by method and volume.
• You may request expedited processing for an added fee.
• Keep your filed copy with your company records.

13) After filing: set up your LLC

• Prepare and sign a company agreement.
• Issue membership interests to owners.
• Apply for an EIN with the IRS.
• Open a business bank account.
• Register for state taxes if required.
• Obtain any needed licenses or permits.
• Keep the registered agent and office current.
• Calendar annual franchise tax and reporting deadlines.

Practical tips while completing the form:

• Keep owner names out of public records if privacy matters. Use manager‑managed and list managers instead. Your company agreement can show ownership.
• Confirm the registered agent’s availability during business hours. Missed service can hurt your defense in a lawsuit.
• If you plan to add investors, choose manager‑managed now. This reduces amendments later.
• Consider a series LLC only if you will maintain strict records. Without records, series protections are at risk.
• Use a delayed effective date to avoid mid‑period tax complexity. Alignment can simplify accounting.

Common mistakes to avoid

• Using a name that is too similar to an existing entity.
• Listing a P.O. Box as the registered office.
• Forgetting to confirm registered agent consent.
• Mixing member and manager structures in the same filing.
• Over‑limiting the purpose and blocking future pivots.
• Leaving out the series notice when forming a series LLC.
• Omitting a governing person’s address.
• Failing to sign as organizer.

How the sections fit together

• The name defines your public identity.
• The agent ensures you get legal notices.
• The governance box signals who can act for the LLC.
• The purpose sets the scope of lawful activity.
• Supplemental provisions tailor your protections.
• The organizer’s signature brings it all to life.

If you prepare the details before you draft, the form is straightforward. Keep the entries short and accurate. Use the company agreement for the nuanced terms. File, then run your business as a real LLC from day one.

Legal Terms You Might Encounter

• Organizer means the person who prepares and signs the certificate of formation. On this form, the organizer’s name and address appear, and the organizer must sign. The organizer does not have to be an owner of the LLC.
• Governing authority refers to who runs the LLC: members (member‑managed) or managers (manager‑managed). Form 205 asks you to choose the structure and list each initial governing person with a name and address.
• Member is an owner of the LLC. If you select member‑managed, you list each initial member as a governing person on the form. If you select manager‑managed, you usually do not list all members.
• Manager is a non‑owner or owner appointed to manage the LLC in a manager‑managed structure. If you select manager‑managed, you list each initial manager on the form as a governing person.
• Registered agent is the person or company authorized to receive legal papers for the LLC. Form 205 asks for the registered agent’s name. You must obtain the agent’s consent and keep it with your records, even though you do not file the consent with the form.
• Registered office is the street address in Texas where the registered agent can be reached during normal business hours. Form 205 requires a physical Texas address. A P.O. box does not meet this requirement.
• Purpose describes what your LLC will do. Form 205 allows a general purpose statement, such as engaging in any lawful business. If your activities require a professional license, you may need to adjust the purpose or use a different entity type.
• Effectiveness means when your LLC legally exists. On Form 205, you can make it effective on filing or choose a delayed effective date up to 90 days after filing. Your compliance and tax clocks start on that date.
• Assumed name (often called a “DBA”) is any name you use that is not the exact legal name of the LLC on Form 205. You do not register an assumed name with this form. If you will use one, you register it separately after formation.
• Series LLC is an LLC that can establish internal “series” with separate assets and liabilities. If you want a series structure, Form 205 must include the required series notice language in the supplemental provisions. Without that notice, you have a standard LLC.
• Supplemental provisions are any optional clauses you add to the certificate. On Form 205, you can add limits on authority, series language, or other governance terms. If you include restrictions here, they bind the LLC publicly and are hard to undo without an amendment.

FAQs

Do you need to reserve a name before filing Form 205?

No. Name reservation is optional. You can file Form 205 directly if the name is available. A reservation only holds the name for a limited time; it does not form the LLC.

Do you need a Texas address to form an LLC?

You need a Texas-registered office for the registered agent. It must be a physical street address where the agent is available during business hours. Your principal business address can be outside Texas.

Do you need the registered agent’s signature on the form?

No. You do not file the agent’s signature with Form 205. You must obtain the agent’s written or electronic consent and keep it with your company records. Failure to obtain consent can cause service‑of‑process issues.

Do you list all owners on Form 205?

Only if the LLC is member‑managed. In that case, you list each initial member as a governing person. If the LLC is manager‑managed, you list each initial manager, not every member.

Do you need to describe your business purpose in detail?

Not usually. A general-purpose statement works for most businesses. If your business involves licensed professional services, confirm the correct entity type and purpose language for your situation before filing.

Do you need to notarize Form 205?

No. The organizer signs the form, but notarization is not required.

Do you need an operating agreement to file Form 205?

No. An operating agreement is not filed with the formation. It is an internal contract among members and managers. Create it right after filing to define ownership, management, profits, and dispute procedures.

Do you need to start operations on the day you file?

No. You can choose a delayed effective date up to 90 days after filing. Pick a date that aligns with your launch, insurance, and accounting plans. Your reporting and tax obligations follow that effective date.

Checklist: Before, During, and After the Form 205 – Certificate of Formation – Limited Liability Company

Before signing

• Confirm name availability. Include “LLC” or another approved ending. Avoid restricted words.
• Identify the registered agent. Obtain written consent. Confirm the agent’s Texas street address.
• Decide management: member‑managed or manager‑managed.
• Gather the governing person’s details. Have legal names and mailing addresses for each manager or each member, depending on your structure.
• Draft your purpose. Use a general purpose unless a license or special approval is needed.
• Choose effective date. Decide on immediate effectiveness or a delayed date within 90 days.
• Prepare supplemental provisions. Add series language only if you truly want a series LLC and understand the implications.
• Verify organizer information. Confirm the organizer’s name, address, and authority to sign.
• Plan your internal governance. Outline ownership percentages and draft your operating agreement for post‑filing execution.
• Plan tax steps. Note when you will apply for a federal tax ID and any state tax registrations.

During signing

• Check the entity name exactly as you want it legally recorded.
• Verify the registered agent’s full name and the registered office street address in Texas (no P.O. boxes).
• Confirm the management selection box: member‑managed vs manager‑managed.
• Confirm every governing person’s name and address is complete and spelled correctly.
• Review the purpose statement for accuracy and clarity.
• Review any supplemental provisions. If using a series LLC, confirm the required notice language appears.
• Confirm the effective date choice (immediate or delayed).
• Ensure the organizer’s name and address are correct, and the signature is clear and dated if the form provides a date line.
• Double‑check you have the registered agent’s consent on file (not filed with the form).
• Confirm the filing fee amount and payment method to avoid rejection.

After signing

• File the completed form with the state filing office and pay the fee.
• If you used a delayed effective date, calendar it and avoid pre‑date transactions in the LLC’s name.
• Request a file‑stamped copy or certified copy for your records.
• Store the filed certificate, agent consent, and organizer records in your company minute book (physical or digital).
• Execute the operating agreement. Obtain signatures from all members and managers.
• Issue membership interests and adopt initial resolutions (banking, tax, accounting, and authority).
• Obtain a federal tax ID. Update tax records and payroll systems if needed.
• Open a business bank account using the filed certificate and tax ID.
• Register for any state or local taxes and licenses needed for your industry or location.
• Calendar compliance dates: franchise tax and public information reporting, license renewals, and annual registered agent reviews.
• Set up secure document storage and regular backups for company records.

Common Mistakes to Avoid Form 205 – Certificate of Formation – Limited Liability Company

Leaving out the LLC ending in the name

• Don’t forget the required ending like “LLC.” Missing designations or restricted words can trigger a name rejection and delay your filing.

Listing a P.O. box as the registered office

• Don’t use a P.O. box. The registered office must be a Texas street address where the agent is available during business hours. A P.O. box leads to rejection or a demand for correction.

Selecting the wrong management structure

• Don’t check “manager‑managed” if members will run the business, or vice versa. The wrong choice forces you to amend the filing, complicates banking and contracts, and may confuse authority.

Missing governing person details

• Don’t omit names or addresses for governing persons. Incomplete entries cause rejection or requests for correction, which stall your launch.

Skipping the registered agent’s consent

• Don’t assume you can appoint someone without consent. Lack of consent can lead to failed service of legal papers and compliance issues that put the LLC at risk.

Choosing an unintended effective date

• Don’t misalign the effective date with your insurance, payroll, and tax plans. A premature date can trigger earlier tax and reporting deadlines than you expect.

Adding a series languages you don’t intend to use

• Don’t include series provisions unless you want a series LLC and understand the legal and accounting impact. Removing them later requires an amendment.

What to Do After Filling Out the Form 205 – Certificate of Formation – Limited Liability Company

1) File the form and pay the fee

• Submit the signed certificate to the state filing office with the correct fee. Keep proof of submission and payment. If you chose a delayed effective date, note it on your calendar.

2) Track acceptance and retrieve evidence

• Watch for the filing acknowledgment. Obtain a file‑stamped copy or a certified copy. Store these with your company records. These documents prove legal existence to banks and counterparties.

3) Put core governance in place

• Execute your operating agreement. Record ownership percentages and capital contributions. Adopt initial resolutions that authorize banking, contracts, and tax filings. Clarify who can sign on behalf of the LLC.

4) Obtain a federal tax ID

• Apply for an employer identification number. You will need it for banking, payroll, and many licenses. Keep the assignment notice with your records.

5) Open a business bank account

• Bring your filed certificate and tax ID. Use the account for all business activity. Keep personal funds separate. This protects limited liability and simplifies accounting.

6) Register for state and local taxes

• Confirm sales tax, payroll, and industry‑specific registrations, if any. Set up online profiles and payment methods. Know your filing cycle before you start sales or payroll.

7) Address licenses and permits

• Identify applicable licenses based on your location and industry. Apply before you open or advertise services. Keep renewal dates on a compliance calendar.

8) Handle beneficial ownership reporting

• Federal rules may require you to report beneficial owners of the LLC within a set window. Confirm who qualifies as a beneficial owner and submit the report on time. Store the submission confirmation.

9) Set your compliance calendar

• Add franchise tax and public information reporting deadlines. Calendar license renewals, annual meeting reminders (if you hold them), and periodic review of your registered agent and office. Include document retention checkpoints.

10) Build your records system

• Create a secure company minute book (digital or physical). Include the filed certificate, agent consent, operating agreement, member ledger, resolutions, tax ID notice, and bank documents. Back up files regularly.

11) Insure the business

• Bind coverage appropriate to your risks before operations begin. Align policy dates with your effective date. Keep certificates of insurance with your records.

12) Plan for changes and growth

• If you change the name, registered agent, registered office, or governing persons, file the appropriate update with the state. If ownership changes, update your operating agreement, member ledger, and tax records. For new locations or lines of business, reassess licensing and tax registrations.

13) Keep contracts aligned with authority

• Use signature blocks that match your management structure. For member‑managed: “Member, on behalf of the LLC.” For manager‑managed: “Manager, on behalf of the LLC.” Consistent titles reduce disputes about authority.

14) Review accounting and tax setup

• Choose your accounting method and fiscal year. Set up bookkeeping software and a chart of accounts. Discuss federal tax classification elections with your tax professional if they may benefit you.

15) Maintain the registered agent relationship

• Confirm the agent’s contact details annually. Update the registered office if you or the agent moves. Missed notices can lead to default judgments or administrative actions.