How do I form a 2 member LLC in TX when one of the members will be a foreign Corporation?

1. To form an LLC you will need to file the Certificate of Formation for a Limited Liability Company paperwork with the Secretary of State. The LLC forms located on the Secretary of State website were drafted with simpler formations than yours in mind. When forming a company like yours with issues outside of the norm, you should really contact a local business attorney to assist you in drafting the Certificate of Formation and the Operating Agreement.

2. & 3. The profits and losses of a Texas limited liability company are allocated to each member based on the formula set forth in the operating agreement for that particular LLC. In the absence of an operating agreement, the default law states that distributions shall be based on the relative value of the contributions made by each member to the LLC.

While it is permissible to alter the default rule by having a different formula in the Operating Agreement, it is important to check with your accountant and/or tax attorney because there may be some limitations under Federal tax laws when it comes to altering standard methods of profit and loss distributions. Additionally, LLCs can elect to be taxed in a few different ways, further complicating the issue.