LLCs are created by filing Articles of Organization at the state level. An LLC has members who own the LLC. LLCs provide each owner with a shield from personal liability for debts of the LLC. LLCs are classified as partnerships for tax purposes. All income, expense, gain and loss of the LLC are reported by members of the LLC on their personal Form 1040 (Partnership K-1) in pro-rata relationship to their ownership interest in the LLC.
The loan file should include a copy of the Articles of Organization or Certificate of Formation and any Amendments. This may be obtained from the Texas Secretary of State online at www.sos.state.tx.us or by telephoning (512) 463-5555. All limited liability companies formed in Texas on or after January 1, 2006 have Certificates of Formation rather than Articles of Organization.
The loan file should include a copy of the Regulations or Company Agreement. All limited liability companies formed in Texas on or after January 1, 2006 have a Company Agreement rather than Regulations. These should be reviewed to verify that they do not restrict the company’s ability to borrow, pledge collateral or guaranty debt. They should also be reviewed to determine which signature(s) are required on the loan documents.
The loan file should include a Certificate of Fact: Status. This may be obtained from the Texas Secretary of State online or by telephoning (512) 463-5578.
The loan file should include a Certificate of Franchise Tax Account Status. A Certificate of Franchise Tax Account Status, commonly referred to as a “good standing certificate,” is available for limited liability companies (LLC) doing business in Texas. The CoAS certifies whether or not the limited liability company is in good standing with its franchise tax reports and payments, or that the entity is exempt from the state franchise tax. This certificate provides the account status on franchise tax only. This may be obtained from the Comptroller of Public Accounts by telephoning (800) 252-5555 or online at www.window.state.tx.us. To determine the status of a limited liability company or LLC, select the CoAS Corporation Search page. Answers to your questions are available via e-mail at [email protected] or by calling (800) 252-1381.
The loan file should include a copy of the Resolutions of the Members authorizing the company to borrow money, pledge collateral and/or guaranty indebtedness or a resolution signed by one or more of the company’s managers certifying that they have authority to do so. A sample form Limited Liability Company Authorization Resolution is located at the end of this chapter.
The loan file should include a Certificate of Authority to Transact Business if the LLC conducts business in a state other than its state of formation. This may be obtained from the Secretary of State’s office or other appropriate official’s office in each of these other states.
If a limited liability company is doing business in Texas under an assumed name, a Certificate of Fact: Assumed Name which lists all an entities assumed names (or specifies that none exist) may be ordered from the Texas Secretary of State. A copy of the Assumed Name Certificate should be obtained from the Secretary of State’s office and from the applicable county clerk(s). A sample Assumed Name Certificate form, with instructions, is located at the end of this chapter.
NOTE: The provisions of the Texas Assumed Business or Professional Name Act (located in the back of this Guide) require a limited liability company to file its Assumed Name Certificate with the Secretary of State and, if the limited liability company is required to maintain a registered office address in Texas in the county clerk’s office of the county in which the registered office is located and in the county of its principal office. In the case of a limited liability company that is not required to maintain a registered office address or that does not maintain a registered office address, the Assumed Name Certificate would be filed with the Secretary of State and in the county clerk’s office of the county in which its office is located in Texas.
NOTE: The name of a Texas limited liability company is sufficient for purposes of a UCC-1 financing statement only if that name matches the name shown on its Articles of Organization or Certificate of Formation.