How to Form an LLC in Texas
Complete step-by-step guide to starting your Limited Liability Company in the Lone Star State. Learn about requirements, costs, and best practices for Texas LLC formation.
Texas LLC Quick Facts
*Texas Franchise Tax applies to LLCs with revenue over $1.23 million annually
Step-by-Step LLC Formation Process
Choose Your LLC Name
Your Texas LLC name must be unique and follow state naming requirements.
- • Must contain "Limited Liability Company," "LLC," or "L.L.C."
- • Cannot be the same as existing Texas businesses
- • Must not contain restricted words without proper authorization
- • Check availability through the Texas Secretary of State website
Choose a Registered Agent
Texas requires all LLCs to have a registered agent with a Texas address.
- • Must have a physical Texas address (not P.O. Box)
- • Must be available during business hours
- • Can be yourself, another person, or a professional service
- • Receives legal documents and official state correspondence
File Certificate of Formation
Submit your Certificate of Formation to the Texas Secretary of State.
- • Complete Form 205 (Certificate of Formation)
- • Include your LLC name, registered agent, and organizer information
- • Pay the $300 filing fee
- • Processing typically takes 5-7 business days
Get an EIN (Federal Tax ID)
Obtain an Employer Identification Number from the IRS for tax purposes.
- • Required for tax filing and opening business bank accounts
- • Free directly from the IRS website
- • Can be obtained online, by phone, fax, or mail
- • Takes just a few minutes online
Create an Operating Agreement
While not required by Texas law, an operating agreement is highly recommended.
- • Defines ownership structure and member responsibilities
- • Establishes management procedures and decision-making processes
- • Provides legal protection and clarity for business operations
- • Can be amended as your business grows
Obtain Required Licenses and Permits
Depending on your business type and location, you may need various licenses.
- • Business license from your city or county
- • Professional licenses for regulated industries
- • Sales tax permit if selling goods or taxable services
- • Industry-specific permits and certifications
Texas-Specific LLC Requirements
Franchise Tax
Texas imposes a franchise tax on LLCs, but most small businesses qualify for exemptions.
- • No tax if total revenue is $1.23 million or less
- • Tax rate is 0.375% to 0.75% of margin
- • Annual report due May 15th
- • E-file through Texas Comptroller website
Public Information Report
Texas requires periodic filing of a Public Information Report.
- • Due by the anniversary of your formation
- • Must be filed every few years
- • Updates registered agent and member information
- • Failure to file can result in forfeiture
Foreign LLC Registration
Out-of-state LLCs doing business in Texas must register.
- • File Application for Registration
- • Appoint a Texas registered agent
- • Pay filing fee and obtain certificate
- • Comply with Texas tax obligations
Series LLC
Texas allows Series LLCs for specialized business structures.
- • Create separate "series" within one LLC
- • Each series can have different members and assets
- • Liability protection between series
- • Complex structure requiring careful planning
Benefits of Forming an LLC in Texas
🛡️ Limited Liability Protection
Protect your personal assets from business debts and liabilities. Your personal property cannot be seized to pay business obligations.
💰 Tax Flexibility
Choose how your LLC is taxed - as a sole proprietorship, partnership, S-Corp, or C-Corp for optimal tax benefits.
📈 Business Credibility
Establish credibility with customers, vendors, and lenders. An LLC structure demonstrates professionalism and permanence.
🏛️ No State Income Tax
Texas has no state income tax, making it attractive for business owners. Only franchise tax applies to larger businesses.
🤝 Management Flexibility
LLCs offer flexible management structures without the formalities required by corporations, such as board meetings and shareholders.
🔄 Easy Ownership Transfer
Transfer ownership interests more easily than other business structures, making it easier to bring in investors or partners.
Texas LLC Formation Costs
| Service | Required | Cost |
|---|---|---|
| Texas Secretary of State Filing Fee | Yes | $300 |
| Registered Agent Service (annual) | Yes | $100-$300 |
| EIN from IRS | Recommended | Free |
| Operating Agreement | Recommended | $50-$500 |
| Business License | Varies | $50-$500 |
| Total Minimum Cost | $300 |
Need Help Forming Your Texas LLC?
While you can file yourself, professional services can simplify the process and ensure compliance.
Top-Rated LLC Formation Services
We've reviewed the best LLC formation services to help you choose the right partner for your business.
Compare ServicesOfficial Government Resources
These official government websites provide authoritative information and forms for Texas LLC formation.
Texas Secretary of State
Official Certificate of Formation (Form 205) and filing portal for Texas LLCs.
Internal Revenue Service
Official IRS resource for obtaining your federal Employer Identification Number (EIN).
🏛️ Get Your EIN (Free)Additional Resources
Additional official Texas government resources for business formation and compliance.
Frequently Asked Questions
How long does it take to form an LLC in Texas?
The Texas Secretary of State typically processes LLC formations in 5-7 business days. You can expedite processing for an additional fee.
Do I need a Texas address to form an LLC?
You don't need to be a Texas resident, but your LLC must have a registered agent with a physical Texas address.
Can I be my own registered agent?
Yes, you can serve as your own registered agent if you have a physical Texas address and are available during business hours.
What's the difference between an LLC and a corporation in Texas?
LLCs offer more management flexibility and pass-through taxation, while corporations provide more structure and easier access to investment capital.
Do I need an operating agreement in Texas?
While not required by law, an operating agreement is highly recommended to establish rules for your LLC and protect your limited liability status.
How much does it cost to maintain a Texas LLC?
Texas has no annual fee for LLCs. You'll only pay franchise tax if your revenue exceeds $1.23 million annually, plus any registered agent fees.