How Much Does An LLC Cost In Texas: Everything You Need to Know
How much does an LLC cost in Texas? To start, you must pay a fee of $300 to register your entity, and foreign LLCs must pay a $750 registration fee.3 min read
2. Register Your LLC
3. Registered Agent
4. Operating Agreements
6. Annual Reports
7. Licenses and Permits
How Much Does an LLC Cost in Texas?
How much does an LLC cost in Texas? To start, you must pay a fee of $300 to register your entity, and foreign LLCs must pay a $750 registration fee. It should also be noted that credit card payments come with a 2.7 percent convenience charge. You may also pay an additional $25 fee to expedite the registration process.
A Texas LLC combines the personal asset protection of a corporate entity with the simplicity of a partnership. To register your LLC in Texas, you must file the necessary paperwork with the Texas secretary of state office. Additionally, your business should obtain permits and licenses based on your chosen industry and the county where the LLC resides.
Under state law, the LLC must contain words such as “Limited Liability Company” or abbreviations in the form of “LLC,” L.L.C.,” or “LC.” You may also use other words and abbreviations such as “Company” or “Co.”
Regardless of the end title, your LLC name must be different from other LLCs already registered in the state. You may check name availability using the Texas Secretary of state website, or you can call the secretary of state number at 512-463-5555.
If the name does not appear in the database, you may reserve the name for 120 days by filing a reservation application (Form 501) with the secretary of state office. Reservation costs amount to $40, and you can file online via the secretary of state website.
Register Your LLC
You do not have to register a name, but doing so prevents other businesses from using your intended name as you file for registration. The primary document you need to create a Texas LLC is a Certificate of Formation (Form 205). To complete the registration, the document should have the following information:
- LLC Name
- Purpose of Business
- Whether the LLC is Manager or Member-Managed
- Name Addresses of LLC Members
- Registered Agent
In addition, you must document a registered agent on your certificate. A registered agent accepts documents on behalf of your LLC, such as court papers or other important documents from Texas officials. The agent must have a physical street address in Texas and have authorization to conduct business in the state. Also, your LLC cannot be its own registered agent, and foreign LLCs must choose a Texas-based agent.
Operating agreements are not required in Texas, but you should have one in place to establish essential rules and operation parameters within the LLC. Your operating agreement should including the following:
- Management Structure
- Role of Each Member
- Payment/Compensation System
You may tailor the operating agreement as you and other members see fit. Moreover, it does not have to be filed with your certificate of formation. With that, your agreement should be in plain view for all members to see, and you should ensure that all parties agree to and accept the terms and conditions of the agreement.
Before conducting business, you must get your employer identification number (EIN). An EIN is a tool the IRS uses to label and tax your business accordingly. You will need an EIN:
- If your LLC has more than one member
- If you intend to hire employees
- If your LLC is under a corporate tax structure
You may get your EIN via the IRS website for free.
Filing annual reports is another requirement, most notably in the form of annual franchise taxes. Computing annual franchise taxes can be complicated, which is why you should refer to the Texas Comptroller of Public Accounts for more information. Moreover, you may also hire an attorney who can guide you through annual filing procedures and franchise tax calculation.
Licenses and Permits
Lastly, you will need to get licenses and permits to operate in certain counties. For instance, you will need to apply for a sales and use tax to sell goods and services to customers in some cases. In cases of collecting sales taxes, you need to register with the comptroller. Other professionals such as a barbers or architects must obtain additional licenses. The price in getting permits and licenses depends on your profession.
How much does an LLC cost in Texas? To know more about the process, submit your legal inquiry to the UpCounsel marketplace. UpCounsel’s top lawyers will guide you through the ins and outs of creating an LLC in Texas and will help you get the right licenses and permits needed to conduct business. Our lawyers will also help you take advantage of all tax options available so you can save money and operate your business efficiently.