Texas Secretary of State LLC Filing and Compliance

Key Takeaways

• The Texas Secretary of State LLC process includes name selection, registered agent designation, and filing the Certificate of Formation with a $300 fee.
• Texas LLCs must comply with state tax and licensing rules, including franchise tax reporting and sales tax registration when applicable.
• Foreign LLCs must register with the Texas Secretary of State before doing business in Texas, typically by filing Form 304 and appointing a Texas-based registered agent.
• LLC dissolution in Texas requires filing a Certificate of Termination and securing a tax clearance from the Comptroller of Public Accounts.
• The Texas SOSDirect system allows for name searches, document filings, and business record access online.

Secretary of State Texas LLC manages the formation of a limited liability company in the state. This type of business entity provides advantageous tax status and prevents your personal assets from liability in the event of business debts or financial obligations.

Forming an LLC in Texas

• First, choose a name that is not already in use by another business in the state. You can check the availability of a name on the SOSDirect website maintained by the Texas Secretary of State. The name must include the words Limited Liability Company, Limited Company, or an abbreviation of these. Once you decide on a name, you can reserve it for a fee of $40. This can be done online or through the mail.
• Appoint a registered agent who is responsible for accepting legal documents on behalf of the LLC. This may be an individual who has a physical street address in Texas or a company authorized to conduct business in Texas. The state maintains information about the registered agent process
• When you have a name, file Form 205, Certificate of Formation, with the Texas Secretary of State. This document includes the name of the LLC, the name and address of the registered agent, whether the business is run by members or hired managers, the name and address of the governing member and organizer of the LLC, and the effective date of the business. The fee for this filing is $300.
• Although it's not required for Texas LLCs to create an operating agreement, you should have one in place if your company has more than one member.
• LLCs with more than one member must register for a free employer identification number (EIN) with the IRS. This is also a required step for LLCs with employees and those who opt to be taxed as corporations rather than as sole proprietorships. You can complete this process online, and no fee is required.
• Depending on your industry and business location, you may need to register for other state and local business licenses. More information is available from the Texas Department of Regulation.
• You must register with the Texas Comptroller of Public Accounts if you are selling products and charging sales tax. This can typically be done online, by mail, or in person.
• Texas does not require LLCs to submit annual reports, but they must file annual franchise tax reports.

Texas LLC Name Rules and Restrictions

When choosing an LLC name, Texas law prohibits names that:

• Are deceptively similar to existing registered names.
• Contain words implying an unlawful purpose or that require special licensing (e.g., “bank,” “insurance”) without proper authorization.
• Suggest an affiliation with a government agency.

You can include foreign language words if they meet naming rules. Name availability searches should be performed via SOSDirect before filing to prevent rejection.

Using SOSDirect for Texas LLC Filings and Searches

The Texas Secretary of State offers the SOSDirect online system, which allows business owners to:

• Check name availability and reserve a name.
• File the Certificate of Formation and other required LLC documents.
• Obtain certified copies of business filings.
• Search existing business entities by name, file number, or registered agent.

SOSDirect requires a user account and charges modest fees for filings and document retrievals, plus a 2.7% convenience fee for credit card payments. Regular users may find the system faster than mailing documents, as many filings are processed the same business day.

Registering a Foreign LLC in Texas

An LLC created outside of Texas must register as a foreign LLC to do business in the state and must have a registered agent who lives or is authorized to do business in Texas. To register, submit Form 304, Application for Registration of Foreign Limited Liability Company, and pay the $750 filing fee. If the name of your LLC is already in use in Texas, you must adopt an assumed name for use in the state by filing Form 503 and paying a $25 fee.

Common Reasons for Foreign LLC Rejections in Texas

Foreign LLC applications can be rejected if:

• The proposed name is already in use and no assumed name filing accompanies the application.
• The registered agent does not have a physical Texas address.
• The application omits required information, such as the jurisdiction where the LLC was originally formed.

Ensuring documents are complete and fees are paid can prevent delays. Many businesses hire a Texas registered agent service to meet statutory requirements.

Dissolving a Texas LLC

Submit the Certificate of Termination of Domestic Entity to the Texas Secretary of State to dissolve your LLC. Include a certificate of account status indicating that the LLC is in good standing and all taxes have been paid. The filing fee for dissolution is $40.

To get a certificate of account status, file Form 05-359, Request for Certificate of Account Status to Terminate a Taxable Entity's Existence in Texas.

Certificates of termination are typically processed in three to five days, but it may take up to six weeks to receive your tax clearance. After your entity is terminated, another entity can immediately use your business name.

Failing to properly dissolve your Texas LLC means that you are still required to pay franchise tax and will be charged a 5 percent penalty for late filing, another 5 percent after 30 days, and interest of 1 percent over the prime rate after the tax is 60 days late.

Winding Up Texas LLC Affairs Before Termination

Winding Up Texas LLC Affairs Before Termination

Content:Before filing for dissolution, Texas LLCs must:

1. Pay all outstanding state taxes, including franchise tax.
2. Notify creditors and settle debts.
3. Distribute remaining assets to members according to the operating agreement.
4. Cancel business licenses and permits.

Completing these steps before submitting the Certificate of Termination helps avoid post-dissolution tax issues or legal disputes.

Contact Information

The Texas Secretary of State is located at 1019 Brazos in Austin, TX 78701. This office is open from 8 a.m. to 5 p.m. Monday through Friday.

The mailing address is: Corporations Section Texas Secretary of State P.O. Box 13697Austin, TX 78711-3697Telephone: 512-463-5555Fax: 512-463-5709

Frequently Asked Questions

1. How much does it cost to start an LLC in Texas?
   The state filing fee for a Texas LLC Certificate of Formation is $300, plus any SOSDirect transaction fees.
2. How long does it take to form a Texas LLC?
   Online SOSDirect filings are often processed within 1–3 business days, while mailed filings may take a week or more.
3. Do I need an operating agreement for my Texas LLC?
   It’s not legally required, but an operating agreement is highly recommended to define member rights and responsibilities.
4. Can I be my own registered agent in Texas?
   Yes, if you have a physical street address in Texas and are available during normal business hours to receive legal documents.
5. What happens if I don’t file a franchise tax report?
   Failure to file can result in penalties, interest, and eventual forfeiture of your LLC’s right to transact business in Texas.

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