Your company name is important. It’s your first impression, and it’s how people will remember you. You don’t want to be the business with a forgettable name. So, when you’ve got that perfect name in mind, that clever alliteration or meaningful acronym, you might think about reserving it before someone else does.
Naming your company is one of the first official steps when starting an LLC in Texas. In certain situations, it may be necessary to reserve a business name while you’re preparing to bring your business idea to life.
In this article, we’ll explain when reserving a business name is necessary and guide you through all the steps involved.
Are You Required to Reserve a Business Name?
Some states require you to reserve your name before registering your LLC, but Texas does not. You can register your name and LLC at the same time when you file your Certificate of Formation.
Should You Reserve Your LLC Name?
Maybe it took you sleepless nights of brainstorming, or maybe you thought of it while sitting at a traffic light. No matter how you came up with your memorable LLC name, you’ll want to make sure that it’s available and ready to use when you file your Texas LLC registration.
You have the option to reserve your LLC name, but it’ll cost you a $40 fee. Overall, it’s cheaper to skip this fee and simply start your business, which will lock in your name.
However, there are cases where you may not be ready to officially start your business. Filing an application to reserve your business name gives you “dibs” and ensures that competitors aren’t able to snag it while you’re preparing for launch.
If your business name is unique, including unusual spellings or characters and/or family names, it may not be necessary to reserve a Texas business name ahead of time. Plus, paying the extra state fee to reserve your business name could be a waste of resources if you’re planning to launch your business soon after.
How Long Does a Texas Business Name Reservation Last?
Anyone planning to do business within the state of Texas can reserve an entity name. The good news is that you can reserve a name for as long as you want by successfully renewing your application. The bad news is that there is a fee associated with each renewal.
Filing your name registration prevents another entity from using that name to conduct business in the state during the time of your hold. An entity name registration in the state of Texas lasts 120 days from the date of filing and can be renewed as many times as necessary. To renew your name reservation, you must file another Form 501 (see below) with an additional $40 fee in the 30 days preceding your reservation’s expiration.
If you’ve decided against a particular LLC name, you can withdraw your reservation at any time by filing a notice of withdrawal.
How do I Reserve a Business Name in Texas?
Got a name in mind? Perfect. Follow these steps to reserve it.
Before submitting your application to reserve your business name, you first need to check name availability. The Texas Comptroller of Public Accounts has a simple and user-friendly Taxable Entity Search tool on their website. Don’t forget that you also need to comply with other business entity name restrictions from the state of Texas (find them all here). All good? Then check to see if your LLC name is available. If it is, let out a sigh of relief—you’re ready to reserve it.
You can reserve your LLC name one of several ways. The easiest and fastest way is to file online at the Texas SOSDirect website.
You can also download Form 501 – Application for Reservation or Renewal of Reservation of an Entity Name and file it by mail to:
P.O. Box 13697
Austin, Texas 78711-3697
Or by fax to: (512) 463-5709
Or, if you live near Austin, you can deliver it directly to the James Earl Rudder Office Building:
1019 Brazos St.
Austin, Texas 78701
There is a $40 application fee that can be paid by personal check, money order, LegalEase debit cards, and all major credit/debit cards. Checks and money orders must be made out to the Texas Secretary of State. Keep in mind that there’s an additional 2.7% convenience fee if paying by card. You must by an additional $40 fee each time you renew your reservation.
Wrapping up and Choosing the Best Route
Your LLC name is an important part of the business. If you’re not ready to launch your business, but you’ve got a perfect name and you think someone else might claim it, consider reserving it.
However if your business is ready for takeoff, use our comprehensive guide to forming an LLC in Texas to get started instead. This way, rather than paying an additional $40 for the name reservation application, you’ll only pay the one-time $300 Texas LLC formation fee to claim your name and form the LLC at the same time. $40 isn’t a fortune by any means, but this will at least save you the hassle of reserving a name and registering an LLC separately.
Save Time by Using a Professional LLC Service
As a business owner, you have a lot to think about. Pile on the responsibility of handling state correspondence, tax information, and more while keeping your LLC compliant, and you’ve got yourself a pretty full plate. Sometimes the best move is to let someone else take care of the paperwork for you. This way, you can sleep easy knowing you’ll never miss a deadline or compliance requirement with the state of Texas.
While LegalZoom is by far the most well-known LLC formation service and has decent overall value, we highly recommend looking into IncFile or Northwest Registered Agent. We’ve done the research so you don’t have to, and these two are reliable, professional, and efficient.
We compiled our meticulous research into thorough comparison guides for you to use. Take a look if you’re considering a professional LLC service. It’s well worth your time.