Key Takeaways

  • To form an LLC in Texas, you must file a Certificate of Formation (Form 205) with the Secretary of State and pay a $300 filing fee.
  • A registered agent with a Texas address is required to receive legal documents on behalf of the LLC.
  • An Operating Agreement is not required by law but is highly recommended to define ownership and management roles.
  • LLCs must obtain an Employer Identification Number (EIN) from the IRS for tax and banking purposes.
  • Texas LLCs are not subject to a state income tax but may need to file a Texas Franchise Tax Report annually.
  • You can submit your formation documents online, by mail, or in person, with online filings offering the fastest approval time.
  • Additional costs may include name reservation, DBA registration, and optional expedited processing fees.

In terms of LLC forms, Texas requires that a Certificate of Formation be filed with the Secretary of State, along with a nonrefundable $300 filing fee. An operating agreement is not required but is recommended.

Starting an LLC in Texas Overview

Forming an LLC Texas is relatively easy and affordable. While it is similar to many states, forming an LLC in Texas does have some specific requirements:

  • Registering with the Secretary of State by filling out the necessary forms
  • Paying the fees associated with filing
  • Meeting all required formation and naming requirements

Before deciding on registering for an LLC, it is important to research what an LLC means and determine if it will be the best option for your business structure.

Benefits of Forming an LLC in Texas

Forming an LLC in Texas provides business owners with flexibility, liability protection, and tax advantages. The state’s business-friendly regulations make it one of the most popular places for entrepreneurs to register an LLC. Texas does not impose a personal income tax, which means members enjoy pass-through taxation, keeping profits in their hands instead of being taxed twice.

Additional benefits include:

  • Personal asset protection: Members are shielded from personal liability for business debts or lawsuits.
  • Flexible management: Texas allows for both member-managed and manager-managed structures.
  • No residency requirement: Owners can form an LLC even if they are not residents of Texas.
  • Strong privacy options: While public information must list an organizer, members can limit personal details on state filings.
  • Low ongoing compliance costs: Unlike corporations, Texas LLCs don’t have to hold annual meetings or maintain complex records.

Steps to Start an LLC in Texas

There are some important steps when it comes to forming an LLC in Texas, including the following:

  1. Naming your LLC
  2. Selecting a registered agent
  3. Creating and filing a Certificate of Formation with the State of Texas
  4. Drafting an operating agreement
  5. Obtaining a company EIN

Filing Methods and Processing Times

When you file to form an LLC in Texas, you can submit your Certificate of Formation through three methods:

  1. Online via SOSDirect – The fastest and most convenient option. Filings are usually processed within 2–3 business days.
  2. By mail – Mail your completed Form 205 and check or money order for $300 to the Secretary of State’s office. Processing may take 7–10 business days.
  3. In person – Deliver the form and payment directly to the Austin office.

If you need your LLC formed more quickly, Texas offers expedited processing for an additional $25 fee. Keep in mind that payment can be made via credit card (online) or check/money order (mail).

Naming your LLC 

One of the most important steps when it comes to forming your Texas LLC is coming up with an appropriate name for your business. You will want to take some time to research the name you want to make sure it is easily searchable for customers. 

There are some naming requirements that you will need to make sure to follow, such as adding "Limited Liability Company" or "LLC" to the name and gathering the licenses and necessary paperwork if adding a professionals service name to the company name. This is required for any professional services that require a specific license, such as in the legal and medical fields. You must also make sure that your company name does not imply any association with a federal or state agency.

The final step to naming your company is to make sure that the name is available by checking https://direct.sos.state.tx.us/acct/acct-subscribe.asp.

Reserving and Registering Your Business Name

Before you officially form an LLC in Texas, you can reserve your business name for up to 120 days by filing a Name Reservation Form (Form 501) with the Secretary of State and paying a $40 fee. While optional, this step ensures your chosen name isn’t taken before you file your Certificate of Formation.

If your LLC plans to operate under a name different from its legal name, you must file an Assumed Name Certificate (Form 503), also called a “Doing Business As” (DBA) name. This form must be filed with both the Secretary of State and the county clerk where your business operates.

Pro tip: Conduct a Texas Taxable Entity Search through the Secretary of State’s online database to verify name availability before filing.

Selecting a Registered Agent

An LLC requires a registered agent who will be able to accept business paperwork including processes of legal action on behalf of the LLC. To be a registered LC agent, you must be able to legally do business in the state of Texas and have a physical address to receive correspondence. In Texas, commercial registered agents typically charge between $100 and $250 per year for their services. In Texas, a registered agent must provide consent to the appointment, which can be completed online in an electronic form.

Registered Agent Requirements and Responsibilities

Every Texas LLC must designate a registered agent who maintains a physical address in Texas (P.O. boxes are not allowed). This agent is responsible for receiving service of process, tax notices, and other official correspondence.

A registered agent can be:

  • An individual Texas resident, or
  • A commercial registered agent service authorized to operate in the state.

The agent must provide written or electronic consent before being appointed, and this consent should be kept with the LLC’s records. If the registered agent resigns or changes address, the LLC must promptly file an update using Form 401-A to avoid administrative penalties or dissolution.

Creating and Filing a Certificate of Formation

When creating the Certificate of Formation, one of the first steps in the filing is determining whether the LLC will be member-managed or manager-managed. In a member-managed LLC, all of the members will be actively engaged in the day-to-day operations of running the business, and all will have a say in decisions that will be made regarding operations. This will often be done by voting. When a company is managed by members, it is often referred to as "decentralized management," which will put the managerial duties in the hands of all members instead of just a few.

When a company is termed "manager-managed," the members of a company will identify a specific set of managers who will be more effective in the day-to-day running of the business. These managers will be the ones responsible and will not require a vote to make decisions. This type of management is often referred to as "centralized management."

When filing a Certificate of Formation, you will need to include the following:

  • $300 nonrefundable fee paid to the Secretary of State
  • Name of the company
  • Name and address of the registered agent
  • Electronic consent of the registered agent
  • Statement as to whether the LLC will be member-managed or manager-managed
  • Names and addresses of all organizers of the Certificate of Formation
  • Purpose of the formation of the LLC
  • Dissolution date
  • Names and addresses of all members and managers

Details Required in the Certificate of Formation

When filing Form 205, you’ll need to provide the following information:

  • Entity name that meets state naming rules.
  • Registered agent’s name and street address.
  • Management structure (member-managed or manager-managed).
  • Business purpose (general or specific).
  • Organizer’s name and address.
  • Duration (perpetual or limited).

You can file the form through SOSDirect or by mail. The filing fee is $300, payable to the Secretary of State, and is nonrefundable. After submission, you’ll receive a Certificate of Filing, confirming that your LLC is officially recognized by the state.

Once approved, it’s wise to obtain a stamped copy of your formation documents for your business records and to open a bank account.

Drafting an Operating Agreement

Texas does not require an operating agreement, but this document can be beneficial for outlining the ownership and operating procedures of a company. 

Why an Operating Agreement Matters

Although not legally required, a Texas LLC Operating Agreement is essential for protecting your limited liability status and clarifying the rights and responsibilities of members.

This agreement should address:

  • Ownership percentages and capital contributions
  • Voting rights and management structure
  • Profit distribution and member withdrawals
  • Procedures for admitting new members
  • Dissolution or exit process

An Operating Agreement helps prevent disputes and demonstrates that your LLC is a separate legal entity—an important factor in maintaining limited liability.

Obtaining a Company EIN

The final step to forming an LLC if to file for an Employer Identification Number (EIN), which will be used for filing taxes as well as opening company bank accounts. An EIN can be obtained for free from the IRS by filling out the online forms or printing them out and mailing them to the IRS.

Texas LLC Tax and Reporting Requirements

Texas LLCs benefit from no state income tax, but they are subject to the Texas Franchise Tax, which applies to most business entities. The tax rate depends on your business’s annual revenue:

  • No tax due if total revenue is below $2.47 million (as of 2025).
  • Above that threshold, rates typically range between 0.331% to 0.75%, depending on the business type.

Every LLC must file a Public Information Report (PIR) and Franchise Tax Report annually with the Texas Comptroller of Public Accounts. These reports are due by May 15 each year.

LLCs with employees must also register for state employment taxes through the Texas Workforce Commission and comply with federal withholding requirements.

Frequently Asked Questions

1. How long does it take to form an LLC in Texas? Online filings are typically processed within 2–3 business days, while mailed forms may take 7–10 business days. Expedited service can shorten this to one business day.

2. Do I need a business license to operate an LLC in Texas? There’s no general state business license, but depending on your industry or location, you may need local or professional licenses.

3. What is the annual fee to maintain an LLC in Texas? There is no annual state filing fee, but LLCs must file a Franchise Tax Report and a Public Information Report annually, even if no tax is due.

4. Can I form an LLC in Texas if I live in another state? Yes. Texas does not require LLC members or managers to be state residents. However, you must appoint a registered agent with a Texas address.

5. How do I dissolve a Texas LLC? To close your LLC, file a Certificate of Termination (Form 651) with the Secretary of State and ensure all final tax obligations are met with the Texas Comptroller.

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