The supplemental provisions section of Texas Form 205 is where you add anything beyond the bare-minimum facts the state requires on a Certificate of Formation. One item in that section is mandatory for every Texas LLC: a statement of whether the company has managers, followed by the names and addresses of the initial managers or, if there are none, the initial members. Everything else is optional, and the choices worth making there usually fall into a short list: series LLC notice language, manager liability limits, indemnification, a narrowed business purpose, a fixed duration, and a delayed effective date.
The section sits on page two of Form 205 under the heading “Supplemental Provisions/Information,” with a text box that references an attached addendum if you run out of room.1Secretary of State. Certificate of Formation Limited Liability Company Form 205 Whatever you put there becomes part of the public record and governs the LLC from the moment the Secretary of State approves the filing.
The One Required Item: Manager or Member Management
Texas Business Organizations Code Section 3.010 requires every LLC certificate of formation to state whether the company initially has managers, and to list the name and address of each initial manager or, if the LLC has no managers, each initial member.2State of Texas. Texas Business Organizations Code 3.010 – Supplemental Provisions Required in Certificate of Formation of Limited Liability Company Form 205 handles this in Article 3, where you select the structure and then list the appropriate people.
The choice is substantive. A manager-managed LLC gives only designated managers the authority to bind the company on contracts, bank accounts, and real estate. A member-managed LLC gives that authority to every owner. Most single-member LLCs are member-managed for simplicity; multi-owner companies with passive investors often go manager-managed so day-to-day authority is confined to the people actually running things.
Optional Provisions Worth Considering
Section 3.005(b) authorizes any “provisions not inconsistent with law relating to the organization, ownership, governance, business, or affairs” of the LLC.3State of Texas. Texas Business Organizations Code 3.005 – Certificate of Formation A handful come up often enough to deserve their own look.
Series LLC Notice
If you want the LLC to operate as a series structure, with separate pools of assets, members, or business lines shielded from each other’s liabilities, the certificate of formation has to carry notice of those liability limitations. Section 101.602 conditions the inter-series liability shield on three things: a statement about the limitations in the company agreement, separate accounting for each series’ assets, and notice of the limitations in the certificate of formation.4State of Texas. Texas Business Organizations Code BUS ORG 101.602 The individual series themselves are established in the company agreement under Section 101.601, not on the form.5State of Texas. Texas Business Organizations Code 101.601 – Series of Members, Managers, Membership Interests, or Assets Skip the notice in the certificate and the entire liability segregation structure is undermined, even with a perfectly drafted company agreement.
Manager Liability Limitation
Section 7.001(d)(3) lets an LLC limit or eliminate the personal liability of its managers for monetary damages arising from their service as governing persons, either in the certificate of formation or the company agreement.6State of Texas. Texas Business Organizations Code BUS ORG 7.001 – Limitation of Liability of Governing Person Putting it in the certificate makes the protection a matter of public record, which can matter to prospective managers and investors.
The protection has carve-outs. It does not cover breaches of the duty of loyalty, actions taken in bad faith or involving intentional misconduct, knowing violations of law, or transactions where the manager received an improper personal benefit.6State of Texas. Texas Business Organizations Code BUS ORG 7.001 – Limitation of Liability of Governing Person It shields honest mistakes in judgment, not fraud or self-dealing.
Indemnification
Liability limitation and indemnification are different tools. The default indemnification provisions in Chapter 8 of the Business Organizations Code do not automatically apply to LLCs.7Texas Public Law. Texas Business Organizations Code 8.002 – Application of Chapter If you want the LLC to cover legal costs or judgments its managers or officers face during their service, you have to adopt indemnification language affirmatively, either in the certificate of formation or in the company agreement. Many organizers put liability limitation and indemnification together so the full scope of officer protection sits in one visible document.
Purpose Restriction
Texas defaults to allowing any lawful purpose, so most organizers leave this alone.3State of Texas. Texas Business Organizations Code 3.005 – Certificate of Formation Narrowing the purpose to something specific, such as real estate investment or a particular professional service, keeps capital focused on the intended venture and puts third parties on notice about the company’s scope.
Duration
A Texas LLC exists perpetually unless the certificate says otherwise. Section 3.005(a)(4) contemplates filing entities “not formed to exist perpetually,” so you can set an expiration date or define a dissolution-triggering event.3State of Texas. Texas Business Organizations Code 3.005 – Certificate of Formation This fits real estate development LLCs, film production companies, and other ventures with a natural end point.
Delayed Effective Date
You can set a future effective date up to 90 days after the document is signed, instead of the LLC taking effect the moment the Secretary of State processes the filing. This is useful for aligning the formation date with a funding round, a lease start, or a tax year. Without a request, the LLC becomes effective when the filing is approved.
What to Leave Out of This Section
Not every governance detail belongs on the public form. Anything in the certificate of formation requires a formal amendment filing to change. Texas uses Form 424 for LLC amendments, which generally requires the affirmative vote of all members and must be signed by an authorized manager or managing-member.8Texas Secretary of State. Form 424 – Certificate of Amendment Provisions kept in the company agreement, by contrast, can be modified privately among the members.
So reserve the supplemental provisions section for choices you either want on the public record or that the statute requires to be there, such as series LLC notice and manager liability limitation. Details you expect to evolve, like profit-sharing percentages, voting thresholds, buyout terms, and transfer restrictions, usually belong in the company agreement, where changing them does not involve a filing with the state.
Professional LLCs File a Different Form
If the LLC will provide licensed professional services such as medicine, law, accounting, or architecture, the filing goes on Form 206 rather than Form 205.9Texas Secretary of State. Certificate of Formation Professional Limited Liability Company Form 206 Form 206 carries its own required supplemental provisions, including a mandatory statement of the specific type of professional service the company will provide. The optional provisions discussed above still apply in principle, but the form and some of the requirements differ.