A Texas LLC is one of the most simple, cost-effective, and quick business structures to form. Even so, navigating the formation process can seem daunting without clear guidance and an actionable plan.
In this How to Start an LLC in Texas guide, we’ll break down everything you need to know to form your LLC, from the steps you’ll need to take to get started to maintaining your business structure.
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In order to form an LLC in Texas, you’ll need to complete the following steps:
In the sections below, we’ve broken down each of these steps in more detail.
The first thing you’ll need to do before getting started is picking the right name for your LLC. This is important because your business’s name will need to represent your brand accurately, as well as be as memorable as possible.
In Texas, all LLC names need to abide by the following statutory guidelines in order to be accepted by the Secretary of State:
You can find a more in-depth breakdown of all these requirements for LLC names in the Texas Secretary of State’s Entity Naming Guidelines.
Keep in mind that even though picking an LLC name in itself has no cost, there are certain fees that can be associated with the overall process.
If you’re not yet ready to launch your business and still need a little more time, you can choose to reserve your desired LLC name for later by submitting Form 501 with the Secretary of State ($40 fee). This will keep anyone from being able to take the name you plan to use for 120 days.
If you need any longer than this, you’ll have up to 30 days before this period ends to submit a renewal and protect this name for an additional 120 days.
Another potential cost associated with naming your LLC is a “doing business as” (or DBA) name. This is essentially a nickname that you can choose to register for your business to operate under — particularly if you’re not content with your LLC’s legal name.
Registering a DBA name can be done by filing Form 503 with the Secretary of State and paying a $25 fee.
Note: DBA names in Texas don’t last indefinitely — instead, they’re only valid for a period of 10 years after the date they were initially accepted.
Finally, you’ll want to focus on securing a good domain name (which is your website’s URL address) for your business. For this, try to focus on choosing one that’s easy for customers to remember, relevant to your business, and accurately reflects your brand.
After confirming the domain name you want to use is actually available, you can purchase it through a trusted registrar for a small fee.
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The next step you’ll need to take toward forming your LLC is to pick a registered agent (RA).
This is an individual or business entity that accepts legal correspondence on behalf of your business, such as service of process, notice of lawsuits, and official government communications; you’re required to continuously maintain one as long as your LLC is active.
Your registered agent can be an individual or business entity, but will need to satisfy the following requirements:
Once you’ve appointed a registered agent for your Texas LLC, they’ll be required to fill out Form 401A in order to consent to their appointment — though this is only for personal records and doesn’t need to be filed with the Secretary of State.
You can even act as your own registered agent if you’re looking to save money — though we don’t typically recommend this as you’re much more likely to suffer fines and penalties due to non-compliance than if you just hire a professional service.
On top of this, you’ll lose any anonymity your LLC would have given you since your name, address, and contact information will be publicly available.
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Note: To have a look at some of our other top recommendations, you can also check out our Best Registered Agent Service of 2024 guide.
In Texas, the Certificate of Formation is the filing document that you’ll need to submit with the Secretary of State in order to officially register your LLC (this is also referred to as the Articles of Organization in other states).
If you’re filing this as a domestic LLC it will cost $300, while foreign LLCs will instead be required to pay $750.
To complete your Certificate of Formation, you’ll need to have the following information available:
There are two main ways by which you can file this document with the Texas Secretary of State: online, or by mail.
The quickest and easiest way to submit your LLC’s Certificate of Formation is online through the Texas Secretary of State’s SOSUpload System.
Alternatively, you can submit a paper application by downloading and filling out either Form 205 (domestic entities) or Form 304 (foreign entities).
After this, you’ll need to mail two copies of the completed form to the following address, along with a check/money order for the relevant filing fee:
Business and Commercial Section
Secretary of State
P.O. Box 13697
Austin, TX 78711
Once this is completed, the next step you’ll need to take is to create an operating agreement.
This is an internal document that clearly outlines the ownership and management structure of your company in order to reduce potential future conflict.
While this document isn’t legally mandated in Texas, all LLCs are recommended to have one as it can help maintain both: smooth operations and your LLC’s corporate veil.
A number of companies provide drafting services for operating agreements online, typically for a fee of around a few hundred dollars. However, it’s quite easy to sort this out by yourself if you want to save money, and you can even find a number of free templates online to help with this.
Even though it’s not a legal requirement (unless your LLC has employees or multiple members), all Texas LLCs should apply for an Employer Identification Number (EIN).
This is a free, nine-digit number used by the IRS to identify your business and keep track of its tax reporting — much like a Social Security Number (SSN) for individuals.
You’ll need an EIN to be able to:
On top of this, using an EIN instead of a Social Security Number (SSN) helps to protect your personal information and safeguard your anonymity as the business owner of your LLC.
You can quickly apply for an EIN for your LLC online through the IRS website. You’re also able to submit a paper application using Form SS-4 either via fax to (855) 641-6935, or by mailing it to the following address:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Note: Don’t worry if you don’t already have an SSN, it’s not necessary to have one in order to apply for an EIN — instead, you can just leave Section 7b of the application blank and call the IRS on (267) 941-1099.
Starting January 2024, the vast majority of LLC owners will be required to file a Beneficial Ownership Information (BOI) Report with the US Financial Crimes Enforcement Network (FinCEN).
This is part of an initiative by the U.S. government to stop individuals and entities engaging in illegal or unethical activities from being able to conceal this using “opaque ownership structures”, like shell companies, to hide their true identities.
Existing LLCs will be able to file this report anytime between January 1, 2024, and January 1, 2025, while new LLCs will have up to 90 days after the date they were initially formed to do so (30 days for LLCs formed after the start of 2025).
Keep in mind that failure to file your LLC’s BOI report on time can result in exorbitantly high fines (i.e., $591 per day) or even jail time (up to two years).
Note: Not every LLC owner is required to file a BOI report. For example, companies with more than 20 full-time employees, accounting firms, and banks are exempt. For a full list of filing exemptions, you can have a look at FinCEN’s website.
In order to keep operating legally in the state of Texas, there are a couple of things you’ll likely need to take care of each year, including:
Don’t worry if you’re not sure how to complete each of these steps, as we’ve detailed all the information you’ll need to know in the sections below.
In order to maintain your Texas LLC in good standing, you’ll be required to submit a Public Information Report (PIR) with the Secretary of State (SOS) by May 15 each year.
This is used to maintain the Texas Comptroller’s records accurate and up-to-date with information about businesses operating within the state — which is essential for promoting transparency and enabling the public and government agencies to contact key individuals within your LLC.
You’ll be expected to provide a number of essential details regarding your business, including the names and addresses of its officers and directors, its principal place of business, and its registered agent information (among others).
You can submit your PIR quickly and easily online via the Webfile platform, or — if you prefer to use paper forms — you can do so by mailing it to the following address:
Texas Comptroller of Public Accounts
P.O. Box 149348
Austin, TX 78714-9348
In Texas, LLCs earning more than $2.47 million in annual revenue will be subject to franchise tax in return for the privilege of operating in this state. On top of this, they must also submit an Annual Franchise Tax Report to the Comptroller’s office by May 15 each year.
Franchise tax is imposed on your LLC’s earnings at the following rates depending on what you sell:
Previously, Texas LLCs that earned under the $2.47 million threshold were required to file a No Tax Due Report each year. However, following the introduction of Senate Bill 3 into Texas legislation in July 2023, this “No Tax Due” requirement has been abolished from January 2024 onwards.
Note: If your LLC earns over this threshold, be sure to submit your Annual Franchise Tax Report on time, as late submissions are subject to hefty penalties.
When it comes to selecting a state in which to form an LLC, Texas represents a solid option.
One of the main reasons for this is the state’s reputation for pro-business policies. Its lack of state income tax and lenient regulations/reporting requirements make it a very appealing option for LLC owners as it reduces their overall tax burden.
On top of this, Texas has a strong local economy and boasts a large and diverse workforce, as well as access to robust infrastructure and resources — both of which can be advantageous for growing a business.
Regardless, keep in mind that the best state to form your LLC is almost always the state that you will be operating in; this is because otherwise you’ll likely be required to register as a foreign LLC in your home state, meaning that you’ll need to pay registration and maintenance fees twice.
Recommended: More than 84% of our readers form their LLC through a specialized LLC formation service in order to save time and avoid being caught up in procedural rigmarole.
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Mailing Address:
Business & Commercial Section
P.O. Box 13697
Austin, TX 78711-3697
Physical Address:
1019 Brazos St.
Austin, TX 78701
Monday – Friday, 8:00am – 5:00pm
Contact Information:
To start an LLC in Texas, you’ll need to budget at least $300 (domestic LLCs) or $750 (foreign LLCs), which is enough to cover the cost of filing your formation documents with the Secretary of State.
For a more detailed breakdown of all the other expenses associated with this business structure, check out our Texas LLC Cost guide.
If you file online, it generally takes between two and four weeks for application for business entities to be processed. However, if you choose to file via paper, expect a longer processing time.
For more information on this topic, you can check out our guide on How to Start an LLC in Texas.
Yes, Texas is a great state in which to form an LLC — its advantages include a favorable tax environment, no state income tax, very few reporting requirements under Texas law, and a thriving economy.
With that said, it can be initially a little expensive to form an LLC in Texas, especially when compared to other popular alternatives such as California and Delaware.
First, you’ll need to appoint a qualifying registered agent to receive legal documents on behalf of your foreign limited liability company.
Then, you’ll need to fill out and submit the Application for Registration to the Texas Secretary of State. You can check out the Texas Economic Development website for more guidance.
Information on this page was researched and gathered from a multitude of sources and was most recently updated on September 5, 2024
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