To create a Texas LLC, you’ll need to submit the Certificate of Formation to the Secretary of State. You can apply online or by mail, and the filing fee is $300.
Ready to start an LLC in Texas? Follow these 6 easy steps:
- Name Your Texas LLC
- Choose a Registered Agent
- File the Certificate of Formation
- Create an Operating Agreement
- Get an EIN
- File a BOI Report
Or, use a trusted formation service:
Tailor Brands ($0 + State Fees)
Starting an LLC in Texas is Easy
Starting a limited liability company (LLC) in Texas is the best way to protect your personal assets and add credibility to your small business.
Follow our How to Start an LLC in Texas guide below to get started.
You can also learn how to form a limited liability company in any state by visiting our main How to Start an LLC guide.
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From legal formation to logo design, Tailor Brands has everything you need to start, manage, and grow your LLC.
Get StartedStep 1: Create a Name For Your Texas LLC
Before you register your company, you’ll need to come up with a name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes. We’ll go over some of the basics below.
1. Brainstorm some possibilities. We highly recommend using our LLC name generator tool to get the ideas flowing.
2. Make sure your name meets Texas naming requirements:
- it must contain the words limited liability company or limited company, or LLC or L.L.C.
- it can’t contain restricted words like bank, college, veteran, etc without approval
- it must be distinguishable from any other business entities or DBAs registered in Texas
- full list of Texas naming guidelines
3. Is the name available in Texas? Do a Texas LLC name search with the Secretary of State to find out.
4. Is the URL available? Before you commit 100% to a name, check to see if there’s a good web domain available. We recommend buying your domain right away because even if launching a business website isn’t on your radar right now, it will be soon.
Step 2: Choose a Texas Registered Agent
When you file your Certificate of Formation,
you’ll need to list a registered agent. A registered agent’s job is to accept legal documents like service of process and tax notices for your LLC.
Your registered agent can be a person or a registered agent service. You can act as your own registered agent, but many business owners choose to use a registered agent service.
Here are a few things to think about before you decide to act as your own registered agent:
- You’ll need to be available during normal (9 am – 5 pm) business hours at the address you provide
- If you run your business from home, you’ll have to make your personal address public
- You could be served with a lawsuit in front of your family or coworkers
- You’ll have to remember and be responsible for all upcoming filing deadlines and the corresponding filing fee
After the Certificate of Formation is filed, your registered agent must consent in writing or via email. Note that the statement of consent doesn’t need to be filed with the Secretary of State. This statement should include:
- The name of your LLC in Texas
- A statement that the person or company consents to serve as registered agent
- The name and signature of the registered agent
- The date
To learn more about Texas Registered Agents, read our guide.
Get Free Registered Agent Services
Northwest offers a free year of registered agent service when you form your Texas LLC with them.
Start an LLCStep 3: File the Texas LLC Certificate of Formation
It’s time to officially form your LLC by submitting your Certificate of Formation to the Texas Secretary of State. The filing fee is $300.
You can file online with the Texas SOSDirect system, or fill out a hard copy of Texas Form 205 and mail it in to:
Secretary of State
P.O. Box 13697
Austin, TX 78711
Now is a good time to decide if your LLC will be member-managed vs manager-managed, as you will need to state your management structure when filing the Certificate of Formation.
Here are the 5 main “Articles”:
- Entity Name and Type
- Business Address
- Registered Agent Name and Registered Office Address
- Governing Authority Type
- Business Purpose
For detailed instructions, visit our Texas Certificate of Formation guide.
Step 4: Create a Texas LLC Operating Agreement
Creating an LLC operating agreement (also known in Texas as a company agreement) is the only way to legally lock down your LLC’s management structure and ownership structure. Having an operating agreement in place will give you something to return to if a dispute or lawsuit arises.
Even single-member LLCs benefit from having an operating agreement.
Your operating agreement should outline the following:
- Each member’s responsibilities
- How new members will be admitted
- How existing members may transfer or terminate their membership
- How profits and dividends will be distributed
You can add as many provisions to your company agreement as you want, as long as they don’t conflict with Texas business law. Take a look at our What is an Operating Agreement guide to learn more.
Download a template or create a custom Free Operating Agreement using our tool.
Step 5: Get An EIN
An Employer Identification Number (EIN) is like a Social Security number (SSN) for your company. It is a federal tax identification number that the IRS and the state of Texas will use to track your business activity.
Your EIN will come in handy when it’s time to:
- Open a business bank account
- File Federal and State taxes
- Hire employees
The best way to get an EIN is by using the free online application on the IRS website.
If you prefer though, you can mail in your Form SS-4 to the IRS to get your Employer Identification Number:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Need Help Forming an LLC?
We’ve reviewed and ranked the Top 8 LLC formation services.
Best LLC ServicesStep 6: File a Beneficial Ownership Information Report
When forming a Texas LLC, one of the important steps is to complete the Beneficial Ownership Information (BOI) Report with the Financial Crimes Enforcement Network (FinCEN).
This report — also known as the FinCEN BOI report — is designed to combat money laundering, terrorist financing, and other illicit activities by requiring LLCs to disclose information about their beneficial owners.
This is free to file through the FinCEN website.
New LLCs must complete this filing within 90 days of formation. Existing LLCs must file before January 1, 2025.
Failure to complete this filing requirement will result in a $500 per day fine.
Steps After Forming an LLC in Texas
While creating an LLC is an important milestone, it is just the beginning of your entrepreneurial journey. In this section, we’ll discuss some essential steps that every founder needs to take after the formation process.
From obtaining necessary licenses and permits to opening a business bank account and securing insurance, there are several steps that will help you establish a strong foundation for your new venture. By following these steps, you can avoid costly mistakes and set yourself up for long-term success.
Open A Business Bank Account
A business bank account helps separate personal expenses and company expenses, which is required to maintain your LLC’s corporate veil. A corporate veil protects your personal assets from creditors in potential lawsuits against your business.
Learn more by reading this guide to Banking for Entrepreneurs. For a multi-member LLC, you’ll also want to set up capital accounts for LLC members. We also recommend checking out our review of the best business bank accounts.
Get a Business Credit Card
A business credit card will help separate personal and business expenses while building your company’s credit history. Strong credit history will be useful for raising capital in the form of small business loans.
Set Up Business Accounting
Hiring a business accountant is one of the best ways to ensure you’re taking advantage of LLC tax benefits; possibly saving you and your business thousands of dollars per year.
When you start a new venture, it’s a good idea to begin a relationship with a business accountant as soon as you can to help set your company up for success.
Get Business Insurance
Business insurance helps manage risk. The most common forms are general liability, professional liability, and workers’ compensation.
Find out the real cost of getting insurance for your business. Get a free quote or call 855-965-3168.
Keep Your Company Compliant
Research Texas Business Licenses and Permits
To operate an LLC in Texas, you will need to comply with federal, state, and local government regulations such as health permits, building permits, and signage permits.
Business licenses and permit requirements vary from state to state. To get started, visit our How to Get a Business License in Texas guide. To help facilitate this process, you can also utilize a business license service.
File Your Texas LLC Annual Report
Texas annual reports consist of two filings: the franchise tax report and the public information report. If your LLC’s annualized revenue totals more than $2.47 million, you must pay an annual franchise tax at a rate of 0.375% for wholesalers and retailers and 0.75% for other businesses. LLCs that do not meet this threshold must still file a “No Tax Due” form alongside their public information report.
You can file both the franchise tax report and public information report either online with the Texas Comptroller of Public Accounts or by using the applicable forms.
Understand Texas State Tax Requirements
Companies selling a physical product are generally required to register for a seller’s permit with the Texas Comptroller of Public Accounts. Visit our Texas Sales Tax guide to learn more.
Additionally, if you have employees, you will need to sign up for unemployment insurance tax with the Texas Workforce Commission.
Understand Your Texas LLC’s Federal Tax Requirements
Most Texas LLCs will need to report their income to the Internal Revenue Service (IRS) each year using Form 1065: Partnership Return (multi-member LLCs) or Form 1040 – Schedule C (single-member LLCs).
How you pay yourself will affect your federal taxes. Visit our guide to learn more about how to pay yourself from your LLC
Know Your Texas LLC’s Federal Tax Election Options
Pass-through taxation entails a business’s profits passing through to the LLC member’s individual tax returns. Like a sole proprietorship, a limited liability company is taxed as a pass-through entity, also known as a disregarded entity.
Once this process is completed and after any tax-deductible expenses are taken out, the LLC members pay self-employment taxes and income tax on their portion of the business income.
Alternatively, Texas LLCs can choose to elect to be taxed as an S corporation (S corp) or C corporation (C corp). If S corp tax status is elected, LLC members can be taxed as employees of the business, potentially reducing tax burden.
More LLC Resources
- Texas Foreign Limited Liability Company: Forming a foreign LLC allows your company to operate as one entity in multiple states. Download the Texas foreign LLC form to get started.
- Texas Certificate of Good Standing: A certificate of good standing verifies that your LLC was legally formed. To order, follow our Texas certificate of good standing guide.
- Dissolving a Texas LLC: If you are ready to dissolve your LLC, follow the steps in our Texas LLC Dissolution Guide.
- LLC Legal Forms: TRUiC offers a number of free LLC legal forms including operating agreements, LLC resolutions, and hiring documents.
- LLC Formation Services: Need help forming an LLC in Texas? Read our Best LLC Services review to learn more about pricing and packages.
Frequently Asked Questions
Can an individual or business entity own an LLC in Texas?
Yes, an LLC can be owned by a business entity or individual. The business assets are owned by the LLC, and the members own the LLC. A member can be another LLC or corporation or a single individual. Most limited liability companies are single-member LLCs.
How is a Texas LLC taxed?
On the federal level, a Texas limited liability company is taxed as a pass-through entity. This means that the income and losses of the LLC flow through to the individual members, and are reported on their individual tax returns. The LLC itself does not pay taxes on its income. LLCs can also choose to be taxed as an S corporation or C corporation.
On the state level, a Texas LLC is subject to state income taxes as a pass-through entity. LLCs in Texas are also subject to state franchise taxes.
What is a Texas DBA?
A Texas DBA (doing business as), also known as an assumed name, is any registered name that a business operates under that isn’t its legal business name. An assumed name can be used by any type of business, including a sole proprietorship, partnership, or limited liability company. You can file an assumed name certificate with the state’s SOSDirect system online.
Learn how to get a DBA in our Texas DBA guide.
How long does it take to get a Texas LLC approved?
Processing time for an LLC in Texas is 3 days if filing online or 5 to 7 days if filing by mail.
Do I have to file an annual report for my Texas LLC?
Annual reports are called “franchise tax reports” in Texas. The report is due by May 15th of each year and it helps the state keep track of LLCs and their officers. The report also helps the state keep track of any changes in the company, such as a change in management or a change in address.
Do I need to register my Texas LLC with the Texas comptroller?
Small businesses only need to register with the Texas Comptroller of Public Accounts if they are selling goods and therefore collecting sales tax. You can register online through the state website.
What Is an LLC Formation Service?
An LLC formation service is a great option for those looking to form a company in Texas. Services like these can provide you with the resources and assistance you need to complete the process quickly and easily. They can also help you save money on filing fees, as well as provide you with valuable resources and support along the way. Some of the most popular services include Northwest, LegalZoom, and ZenBusiness.
However, it’s important to note that using a formation service is not the cheapest option – it’s typically more expensive than doing it yourself. But for most people, it’s likely worth the extra cost in order to get the help and support of a professional service.
Do I have to submit any LLC paperwork to the IRS?
If you have formed a Texas LLC, you are not required to submit any paperwork to the IRS. The limited liability company is a separate legal business entity, and as such, is not subject to federal income taxes. However, the LLC may be required to file informational tax returns with the IRS, depending on the amount of income generated by the business.
What are the benefits of an LLC in Texas?
A limited liability company is a popular business structure due to a variety of benefits; LLCs offer personal asset protection, also known as limited liability protection. Forming a registered business entity for limited liability protection is important for all small business owners because it protects their personal assets from creditors and other liabilities.
Other benefits include increased tax options and credibility.
How do I contact the Texas Secretary of State?
Here is the contact information for the Texas Secretary of State:
Mailing Address:
Texas Secretary of State
P.O. Box 12887
Austin, TX 78711-2887
Physical Address:
1019 Brazos St.
Austin, TX 78701
Phone: (512) 463-5555
Email: Corpinfo@sos.texas.gov
