1. An Overview of Texas LLCs
2. Filing Your Certificate of Formation
3. Ongoing Texas LLC Requirements

Understanding Texas LLC annual fees is important when establishing and maintaining your business. In addition to the one-time fee paid to the Texas Secretary of State for registering your business, you may have to pay ongoing franchise taxes. There's also an annual fee to keep your LLC in good standing.

An Overview of Texas LLCs

Limited liability companies are regulated by Title 3, Chapter 101 of the Texas Business Organizations Code. To establish a Texas LLC, you must file the formation document referred to as the Certificate of Formation to the Texas Secretary of State.

When filing the document online, the Secretary of State's office will send you a zip file confirming your LLC has been created within one to two business days. After receiving confirmation, you can then:

  • Obtain an employer identification number (EIN)
  • Draft your LLCs Operating Agreement
  • Open a business bank account
  • Obtain your Texas Sales Tax Permit from the Comptroller's office

Filing Your Certificate of Formation

To file your Certificate of Formation in Texas, you must:

  • Select your LLC name
  • Secure a registered agent
    • A registered agent is a person or business qualified to receive legal documents on your behalf
    • Registered agents are required to operate an LLC in Texas
    • You must obtain your registered agent's consent
    • List your registered agent on your Certificate of Formation and maintain this listing on company records at all times
    • The registered agent must have a physical address in Texas where they can receive documents during normal business hours
  • Decide whether your LLC is manager-managed or member-managed
    • LLC members, or owners, can choose to manage the company's daily operations themselves
    • Your LLC can be governed by all members as a whole, meaning that every member has management responsibilities and authority
    • If you prefer, you can hire outside managers who are nonmembers to run the business
    • With a manager-managed LLC, members still have the ultimate authority to make business decisions
    • List the person in charge and their address in your Certificate of Formation document
    • There are no age requirements on officers, directors, or owners
  • List your LLCs purpose
    • In Texas, you can form a business for any lawful reason, but you must include your LLCs purpose in the Certificate of Formation
    • You may alter the purpose as needed, although doing so isn't required
  • List the LLC organizer's information
    • The LLC organizer is the person completing and filing the Certificate of Formation
    • You can choose to hire a service to complete the paperwork and serve as organizer if you don't want your own name listed
  • Other provisions
    • You may have additional provisions you'd like to include in your formation documents, such as how long the company will exist
    • If there are no special conditions, leave this field blank
    • By default, LLCs are established when the Texas Secretary of State approves your documents, but you can specify a later date in this section
  • Signature
    • When finished, be sure to sign and date your Certificate of Formation
    • Submit the document either electronically online or via mail
  • Pay the fee

Ongoing Texas LLC Requirements

Forming your LLC is just the beginning. You must also take steps to maintain the business and keep it in compliance with the state.

For starters, you must file a franchise tax and public information report with the Comptroller's office. This report is due between January 1 and May 15 and must list the names and contact information of your managers, officers, and directors. The required fee is calculated according to a taxable margin, but the average cost is about $101.

Most states refer to this fee as an Annual Report, but its other names include:

  • Annual List of Members
  • Annual Certificate
  • Biennial Report
  • Annual Registration Fee
  • Biennial Statement
  • Periodic Report
  • Decennial Report
  • Business Privilege Tax Return
  • Franchise Tax Report

Failing to pay your annual LLC fees can result in your business being dissolved. When you calculate all required fees and formation costs, you can spend anywhere from $1,000 to $3,000 on your business. Aside from the franchise tax, however, Texas imposes no additional annual fees on LLCs.

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