There seems to be a great migration throughout the United States—and it’s not just happening among households. While larger companies like Tesla and Toyota have headed to Texas, many smaller businesses have chosen to move out of other states to the Lone Star State. Texas is well known as a business-friendly state, with generous business incentives, lower taxes, and an excellent quality of life for employees. Are you looking to operate your LLC in the great state of Texas? Read on to learn more about what to do before you transfer an LLC to Texas.

Consider your options. There are different ways to start operating an LLC in Texas. You can register as a foreign entity, which is often the choice for companies that are expanding their business in Texas. There’s also an option to convert your LLC to a Texas LLC. Another way to transfer your LLC to Texas would be to form a new entity in Texas and dissolve the original one from out of state. You could even consider setting up an LLC in Texas and then bringing your business to merge into it. Whether you transfer your LLC to Texas through conversion or domestication, something to factor into your decision might include startup costs.

Expect the unexpected. Additional costs can add up when you’re transferring or domesticating your LLC to Texas. Consider things like corporate rent, registration, fees, permits, and licenses, as well as moving costs and supplies for your new workspace.

Talk to your agent. Texas requires that you appoint a Texas registered agent—an individual or business entity in the state—who can receive legal documents for your LLC.

Get information. A certificate of formation is required for LLCs in Texas. This formal document includes information about how your LLC is managed and structured, including details like entity type and name, registered agent, governing authority, purpose of the business, and mailing address.

Make an agreement. While an operating agreement isn’t required for LLCs in Texas, setting one up is a good idea. In Texas, operating agreements are also known as company agreements; they’re documents that outline operating procedures and ownership of the business. Overall, this helps to make clear how the LLC will conduct business.

Think about your employees. Will you be moving your workforce to Texas or hiring from the strong talent pool in Texas? In any case, you’ll need to budget for taking care of state unemployment insurance and sales tax costs for goods and services in Texas. You’ll also want to communicate with and game plan with any employees who may be relocating to Texas, too.

Update your paperwork. Documents such as contracts, employment agreements, and operating agreements must be updated when transferring your LLC to Texas. Some states require you to file a notice of withdrawal or cancel your registration with the state before transferring to another state. For this reason, it’s key to understand Texas’s requirements for LLCs. You’ll need to obtain a Texas Certificate of Authority once you’ve met the requirements for LLCs in your state and in Texas.

Consult a lawyer. It might be wise to enlist the help of an attorney if you’re dissolving a business in another state and starting anew in Texas. If you have questions about transferring an LLC to Texas, it would be wise to work with an attorney who can help you understand the legal requirements and ensure your LLC transfer is done correctly.

Prepare your taxes. When relocating a business to a new state, consulting with an accountant or tax specialist is ideal. LLCs can take advantage of certain tax benefits in Texas; note that you’ll pay federal income tax on any income that comes from your LLC. The specific taxes you must pay will depend on your business type. In addition, your LLC will need an employer identification number (EIN) if you don’t already have one; the IRS will assign your LLC an EIN.

Connect with some Texans. The Texas Economic Development Connection wants to help you make great business decisions when moving your LLC to Texas. This team of certified economic developers works with government agencies, chambers of commerce, and other economic development organizations throughout Texas to support businesses moving to the state. Moving a business to another state can be a big challenge. With the expertise of The Texas Economic Development Connection, you’ll have access to some great resources in the Lone Star State.

Working with the Texas Economic Development Connection is free! Call 214-775-0617 or visit their Relocation Planning Tool online to learn more.