Key Takeaways

  • The Texas LLC filing fee is $300 for the Certificate of Formation, paid to the Secretary of State.
  • You may also incur additional costs such as name reservation ($40), registered agent services ($100–$300/year), and optional expedited processing fees.
  • Texas does not require annual report filing fees, but most LLCs must pay the Texas Franchise Tax by May 15 each year.
  • Other expenses include operating agreement drafting, business licenses, and professional service fees (e.g., attorney or accountant).
  • Foreign LLCs expanding to Texas pay a $750 registration fee.
  • You can find a business attorney on UpCounsel to ensure proper LLC setup and compliance with state law.

The Texas LLC cost is worth it for access to one of the most prosperous states in the United States of America. An LLC, or limited liability company, is a way of organizing a company to take advantage of the best parts of a sole proprietorship and corporation. Since LLC status is granted by and relevant to states, a business looking to form has to decide in which state or states they wish to do business. Those who choose Texas find many advantages to doing business in the Lone Star State.

What Are LLCs?

The most basic forms of businesses in the US are the sole proprietorship and the partnership. Both formations treat the business as a direct extension of the owner or owners, with money earned going directly to the owners, which is helpful when it is time to pay taxes. But in terms of liability, they are far from ideal; if a legal judgment is entered against the business for any reason, the assets of the owners are considered fair game when it is time to pay the penalties.

A corporation is a business entity in which a new “person” is created, in a legal sense, and able to own property and conduct business. The corporation issues share to its owners, entitling them to some degree of control of the operation and piece of the financial returns. This person is able to stand in as the legal person being sued in court cases; any judgment can only be against the corporation's assets, not those of the owners. But there is a special tax on corporations in that they are expected to pay an income tax similar to an individual income tax in addition to the individual tax on the salaries and dividends of the shareholders, leading to double taxation.

An LLC is a state law entity with a liability shield similar to that of a corporation. But for state taxation purposes, their income counts as “pass through,” meaning that it counts as the individual income of its owners. LLC status is primarily relevant in state matters, with the fed taxing it as either a sole proprietorship/partnership or corporation, depending on how it is filed. Note that some LLCs are eligible for S Corporation status, a set of filing rules that allow small corporations who follow strict rules to count income as “pass through.”

Cost to Start an LLC in Texas

The total cost to start an LLC in Texas primarily depends on your filing method and optional services. The base fee is $300 when submitting your Certificate of Formation (Form 205) online or by mail to the Texas Secretary of State.

If you prefer to reserve your business name before filing, you can file Form 501 with a $40 name reservation fee, which holds the name for 120 days.

Additional potential costs include:

  • Registered Agent Fees: $100–$300 per year if you hire a professional agent to receive legal documents.
  • Expedited Filing (optional): While Texas doesn’t officially offer expedited filing online, some filing services can handle the process faster for an extra fee.
  • Certified Copies and Certificates of Status: $15–$30 each if you need official copies for business or banking purposes.

Compared to other states, Texas offers a relatively affordable LLC filing process, especially since it has no annual report fees, though you’ll still have to handle the state’s annual franchise tax requirements.

Preparing a Texas LLC

There are a few steps to form a Texas LLC.

  1. Prepare the proper paperwork.
  2. Search to make sure no other LLCs exist with your desired operational name.
  3. Send in your paperwork.
  4. Pay your fees.

An LLC's paperwork starts with a Form 205, or Certificate of Formation. This document designates the company's name, the name and address of a local agent, and a declaration of whether the business will be run by its owners or by professional managers. To form an LLC, you will also want a local agent, especially if you do not reside in the area at the moment. You'll also probably want to bring in an attorney to look over the paperwork and make sure you are making the best decisions.

Your business' name needs to be distinguishable from others operating in the area, to prevent confusion between your business and others. There is a website where you can search to make sure your name is free. When thinking up a name, try not to be too generic; in addition to making your business stand out, an individualistic name will also speed up the registration process. Your name needs to include some form of LLC designation, whether the words “Limited Liability Company” or “Limited Company” or one of the many abbreviations for that term. That name can be reserved for 120 days with the filing of Form 501 with the Secretary of State if you need more time to get the rest of the paperwork together.

There is also a $300 fee to process the paperwork, as well as a yearly franchise tax due every May 15th, so be sure you have your financial ducks in a row when you file. The tax is somewhat complex and may require a trained accountant or attorney to help you fill out.

Annual and Ongoing Texas LLC Costs

After your LLC is formed, you’ll face ongoing costs to maintain compliance with state regulations. While Texas does not charge annual report fees, LLCs must file a Public Information Report (PIR) each year and pay the Texas Franchise Tax, due by May 15.

The franchise tax is calculated based on your annual revenue:

  • No tax if total revenue is below the “no-tax threshold” (currently around $2.47 million).
  • If above that threshold, the rate ranges between 0.375% and 0.75% depending on the business type.

Other ongoing costs to anticipate:

  • Registered Agent Renewal: $100–$300 annually if using a third-party agent.
  • Business License Fees: Vary by city and industry; local permits may range from $25 to several hundred dollars.
  • Professional Services: Attorneys, accountants, and compliance providers may charge $150–$500 depending on complexity.
  • DBA (Assumed Name) Registration: $25 per county if your LLC operates under a different trade name.

If your company is formed in another state but wishes to operate in Texas, registering as a foreign LLC costs $750 with the Secretary of State.

Optional and Hidden LLC Costs in Texas

When calculating how much is an LLC in Texas, it’s important to account for optional and hidden costs that many first-time business owners overlook.

These can include:

  • Operating Agreement Preparation: Though not required, having one drafted can cost $100–$500.
  • EIN Registration: Free when applying directly with the IRS, but third-party services may charge $50–$100.
  • Business Insurance: Depending on your industry, liability insurance premiums may range from $300 to $1,000 annually.
  • Business Bank Account Setup: Some banks may require a minimum deposit or monthly service fee.
  • Compliance and Record-Keeping Tools: Registered agent or formation services often offer compliance alerts and document storage for $50–$150 per year.

Factoring in these potential expenses gives you a more realistic estimate of your total cost to start and operate an LLC in Texas.

How to Reduce Texas LLC Costs

You can lower the cost of forming and maintaining your Texas LLC through several strategies:

  • File directly with the Texas Secretary of State online instead of using a formation company.
  • Act as your own registered agent if you have a physical Texas address and can accept mail during business hours.
  • Skip unnecessary add-ons like compliance alerts unless you truly need them.
  • Use free resources such as IRS EIN registration and Texas Comptroller tools for franchise tax filing.
  • Consult an attorney early to ensure your formation documents and tax classification are correct, preventing costly corrections later.

While cutting corners can save upfront costs, professional assistance—such as through an experienced attorney on UpCounsel—can help you avoid penalties or compliance issues long-term.

Frequently Asked Questions

  1. How much does it cost to file an LLC in Texas?
    Filing a Texas LLC costs $300 for the Certificate of Formation with the Secretary of State.
  2. Are there annual fees for a Texas LLC?
    There’s no annual report fee, but LLCs must file a Public Information Report and possibly pay the Texas Franchise Tax each year.
  3. How much does a registered agent cost in Texas?
    Professional registered agent services typically cost $100–$300 annually.
  4. How much is a foreign LLC registration in Texas?
    If you formed your LLC outside Texas, registering it as a foreign LLC costs $750.
  5. Can I form an LLC in Texas for free?
    No, the $300 filing fee is mandatory, but you can minimize costs by filing yourself and avoiding unnecessary service fees.

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