Forming a Veteran Owned LLC in Texas for Free

In accordance with Senate Bill (SB) 1049, effective January 1, 2016, a new Veteran-Owned Business that is formed in Texas between January 1, 2016 and January 1, 2020, may be eligible for an exemption from certain filing fees and the Texas franchise tax for the first five years of operation.
— https://www.sos.state.tx.us/corp/veterans.shtml

It's fairly simple so, below, I show you how to start your Veteran Owned Business in Texas today.

Step 1. Ask for Service Verification

During this step, send a verification request letter along with your DD-214 to the Texas Veterans Commission.

  • Statement Letter Requesting Verification of Discharge Status (template enclosed);

  • DD-214, Member 4 copy;

  • Marriage documentation if name is different from the DD-214, Member-4 copy.

  • Fax or Email documents to TVC (choose one): (fax): (512) 463-8741 or (email): SB1049@tvc.texas.gov

(expect 7-10 business days for your request to process, although I think I got mine almost immediately)

Here is an example of what you fax or email the Texas Veterans Commission:

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Submit this with a copy of your DD-214

Step 2: Receive Verification Letter

Your Verification Letter will look like this:

verification_orig.png

 

Step 3: Complete Certification of New Veteran Owned Business

Complete and Sign the 05-904

Traditionally "LLC" needs to be placed after the business name. 
If you are filing electronically, don't forget to print, sign, and scan a copy.
To receive the tax exemption, 100% of the business has to be Veteran Owned.

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Step 4: Complete the Certificate of formation documents

Form 205 is the most complicated of ALL the forms, but don't worry, I'll walk you through it below.

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Article 1 - Name and Type

You'll want to go with whatever will be written on a check to your business and then ensure the business has some translated version of Limited Liability Company on it. i.e. Lampshades by Louis, L.L.C.

Article 2 - Registered Agent

If you're filing alone as an individual, or as a group, one individual should be placed here. Check the "B" checkbox, and then fill out the below information. The "C" area will be for the address of the business. This will be public information, so if privacy is an issue, use the business' address.

Article 3 - Governing Authority

As an individual, filing alone, you will be the manager. Check the "A" Checkbox here, then fill out the individual line with your name, middle initial, and last name. Leave the Organization line blank. Again, put the address of the business.

If you have more than one Veteran filing with you, there are 3 slots for this information of "governors" of the business.

Article 4 - Purpose

There's nothing to fill out in this section for individuals with honest businesses - As long as you're forming a legal business, you should be fine.

Supplemental Provisions/Information

I feel, if you need to fill something out in the Supplemental Provisions/Information section, you may need a Lawyer to file for you.

Organizer

Again, alone, this is you and your address (or business address).

Effectiveness of Filing

For 99.9999% of business' You will check "A" here stating that as soon as they file this, you have an LLC. It's really the quickest and easiest choice here. If for some legal or tax purpose, you need the business to start at a later date, B. If theres some event that needs to happen first, I'm assuming the dissolution of another business or something, then C would be the answer, but again, you'll probably check "A" here.

Execution

Date it, print the name of the organizer on the bottom line and then print the document and sign it.

 

Step 5: Send your Packet

So you have everything filled, signed and you're ready to send it. Here's a final checklist.

  • Texas Veterans Commission Verification Letter with your unique Identifier Code (Multiple if more than one Veteran). (1 page each)
  • 05-904 Certification of New Veteran-Owned Business. (1 page)
  • Form 205 Certification of Formation Limited Liability Company (Pages 4-6)

Now there's one little detail left - The 205 states to submit "in duplicate" to the Secretary of State, that means send two copies. I, personally, made two copies of the documents, I'm sending the Original and a photocopy, and keeping one photocopy for my records.

MAIL:
Secretary of State
P.O. Box 13697
Austin, TX 78711-3697

FAX:
 512 463-5709


I hope this was helpful - Let me know if there is anything I can do to help.

Here are some additional resources

http://www.ia-cpa.com/blog/veterans-can-form-a-free-texas-llc-or-corporation
https://www.sos.state.tx.us/corp/veterans.shtml


Cory Myres is a Process Consultant and Leadership Advisor from Lubbock, TX

Cory Myres - Lubbock Consulting

Cory Myres is a serial entrepreneur and wine connoisseur. A Lubbock Texas Native, he enlisted in the US Army shortly after graduating from Coronado High School. After a tour in Afghanistan, with the famed 101st Airborne Division he returned to Lubbock Texas to attend Texas Tech University. As a Red Raider he studied Architecture, Civil Engineering, Statistics, Economics and Graduated from the Rawls College of Business Administration with a Bachelors of Business Administration in Management with a focus on Entrepreneurship. From then he went on to become certified in Six Sigma as a Black Belt, and Project Management Professional in order to found his business consulting firm, Lubbock Consulting.