This section discusses the aspects of the law that specifically apply to limited liability companies.

A limited liability company is an entity created by the 72nd Texas Legislature that could begin operations effective August 26, 1991. By law, this is a legal business entity distinct from its owners; that is, its owners are protected from liabilities of its activities. There are two basic types of limited liability companies:

1. Domestic Liability Company: A limited liability company that was formed under Texas law.
   
   
2. Foreign Limited Liability Company: A limited liability company that was formed under the laws of another state. Prior to August 26, 1991, these companies operated as unincorporated associations in the State of Texas.

A limited liability company, by legislative action, must have the word "Limited" in its title, or the abbreviations "LTD" , "LLC" or "PLLC."

Note: PLLC stands for Professional Limited Liability Company and is commonly doctors, lawyers, etc.

Definitions:

1. Limited Liability Company Member:

   An owner of a Limited Liability Company. A member functions in a role similar to that of a corporate shareholder. A member has the right to operate the business or elect one or more managers to run it. Unlike limited partners, a limited liability company member does not run the risk of losing liability protection by participating in the affairs of the limited liability company.

2. Limited Liability Company Manager:

   Elected by the members to operate the limited liability company managers function in a role similar to a corporation's board of directors. The managers may operate the business or elect officers to run it.

3. Limited Liability Company Officer:

   Elected by limited liability company managers to operate the limited liability company for the limited liability company managers and limited liability members.

4. Limited Liability Company Articles of Organization:

   On file with the Secretary of State, the Articles of Organization establish the name of the limited liability company, the longevity of the limited liability company, the purpose of the limited liability, the address of the limited liability company, who will manage the limited liability company, if management is reserved for members only, the members' names and addresses, and any other provisions deemed necessary.

   The Articles also set forth the name and address of its initial registered agent in Texas.

   Any changes or amendments to the Articles of Organization must be filed with the Secretary of State. Copies of the Articles of Organization, along with any amendments are available through the Secretary of State.

5. Limited Liability Company Regulations:

   Provisions that control the operation and management of the affairs of the limited liability company. They cannot be inconsistent with the law or the limited liability company's Articles of Organization.

6. Certificate of Organization:

   Authorization from the Secretary of State to a domestic limited liability company allowing the company to begin to transact business in Texas.

7. Certificate of Authority:

   Authorization from the Secretary of State to a foreign limited liability company allowing them to begin to transact business in Texas

Ownership will be established based on information provided by the employer via C-1 Status Report or Internet Registration. An owner could be a member, a manager, or an officer. Their authority can be verified through the limited liability company's regulations. These members, managers, or officers will be authorized to sign for the limited liability company. Ownership can also be verified through the Secretary of State.

When a limited liability company registers with the Secretary of State, they must have a registered agent located in Texas. The Secretary of State will assign a file number to the limited liability company. The month, day, and year of the filing and the name and address of the registered agent will be recorded.

All remuneration paid to an individual, including members, managers, and officers, for services rendered, will be considered wages as defined by the Texas Unemployment Compensation Act, except for those distributions of profits based on formulas established in the limited liability company's Articles of Organization or Regulations.

A subpoena duces tecum (for records), a TWC Warning Letter, or a court order should be issued to the ownership of record as established by the latest status report on file. If a status report is not on file, then the subpoena, TWC Warning Letter, or court order should be issued to a limited liability company member listed in the Articles of Organization on file with the Secretary of State. Tax liens, bank claim notices, and assessments will be filed in the name of the limited liability company and not against the members or owners. Assessments will be filed in the name of the limited liability company and not the name(s) of the members or owners. When necessary, TWC will serve the Registered Agent or the Secretary of State if service cannot be made on the Registered Agent.