How to Form LLC in Texas

Quick Answer

Forming an LLC in Texas requires filing a Certificate of Formation with the Texas Secretary of State for a $300 fee. As of April 10, 2026, processing takes 5-7 business days online or 2-3 days with expedited service. You’ll need a unique business name, registered agent, and organizer to complete the formation process.

Step-by-Step Formation Process

Follow these steps to form your LLC in Texas:

1. Choose a Business Name: Your LLC name must include “Limited Liability Company,” “LLC,” or “L.L.C.” and be distinguishable from existing entities registered in Texas.

2. Check Name Availability: Search the Texas Secretary of State’s business entity database at sos.state.tx.us to verify your chosen name is available.

3. Appoint a Registered Agent: Designate a person or company with a Texas address to receive legal documents on behalf of your LLC.

4. Prepare Certificate of Formation: Complete Form 205, the Certificate of Formation for a Limited Liability Company, available on the Texas Secretary of State website.

5. File the Certificate: Submit your completed form online through SOSDirect or by mail to the Texas Secretary of State, Corporations Section, P.O. Box 13697, Austin, TX 78711-3697.

6. Pay Filing Fee: Include the $300 filing fee with your submission. Online payments accept credit cards, while mail submissions require checks or money orders.

7. Obtain EIN: Apply for an Employer Identification Number from the IRS, even if you don’t plan to hire employees initially.

8. Create Operating Agreement: While not required by Texas law, draft an operating agreement to establish management structure and member rights.

Costs Breakdown

Item	Cost	Notes
Certificate of Formation	$300	Required state filing fee
Expedited Processing	Additional fee applies	Reduces processing to 2-3 days
Registered Agent Service	$100-300/year	If hiring a service company
EIN Application	Free	Apply directly with IRS
Operating Agreement	$0-500+	DIY or attorney-drafted

As of April 10, 2026, the Texas Secretary of State charges $300 for LLC formation, regardless of filing method. Additional expedited processing fees apply for faster service, though specific expedited fee amounts should be confirmed with the Secretary of State for current rates.

Requirements Checklist

Before filing your Texas LLC, ensure you have:

• ✅ Unique Business Name: Must comply with Texas naming requirements and be available for use
• ✅ Registered Agent: Individual or entity with Texas address to receive legal documents
• ✅ Organizer Information: Person filing the Certificate of Formation (can be anyone)
• ✅ Management Structure: Decide between member-managed or manager-managed LLC
• ✅ Filing Fee: $300 payment method (credit card for online, check/money order for mail)
• ✅ Principal Office Address: Texas business address for your LLC

Optional but recommended items include an operating agreement to govern internal operations and an EIN for tax and banking purposes.

Tax Implications

Texas offers significant tax advantages for LLC owners:

State Taxes: Texas imposes no state income tax on individuals or pass-through entities like LLCs. This means LLC profits pass through to members’ personal tax returns without additional state-level taxation.

Franchise Tax: Texas LLCs with annual revenue exceeding $2.47 million must pay franchise tax. LLCs below this threshold owe no franchise tax, making Texas particularly attractive for smaller businesses.

Federal Taxes: Single-member LLCs are taxed as sole proprietorships by default, while multi-member LLCs are taxed as partnerships. Members pay self-employment tax on their share of LLC profits.

Sales Tax: If your LLC sells taxable goods or services, you’ll need to register for Texas sales tax. The base state rate is 6.25%, with additional local taxes possible.

Ongoing Obligations

Texas LLCs have minimal ongoing compliance requirements:

Annual Reports: Texas does not require LLCs to file annual reports, unlike many other states.

Franchise Tax Report: Only LLCs with annual revenue exceeding $2.47 million must file franchise tax reports and pay associated taxes.

Registered Agent: Maintain a registered agent with a Texas address at all times. Update the Secretary of State if your registered agent changes.

Business Records: Keep accurate financial records and meeting minutes, even though Texas doesn’t require specific record-keeping formats.

Federal Tax Filings: File appropriate federal tax returns based on your LLC’s tax election and structure.

Registered Agent

Texas law requires every LLC to maintain a registered agent with a physical Texas address. The registered agent receives important legal documents, including lawsuits, tax notices, and state correspondence.

Registered Agent Options:

• Yourself (if you have a Texas address)
• Another individual with Texas residence
• Professional registered agent service company

Responsibilities: Your registered agent must be available during normal business hours and have a physical address (not a P.O. Box) in Texas. Many business owners choose professional services to ensure reliable document receipt and maintain privacy.

Changing Agents: File a Statement of Change of Registered Agent with the Texas Secretary of State if you need to change your registered agent.

Common Mistakes to Avoid

1. Choosing an Unavailable Name: Always search the Texas business entity database before settling on a name. Similar names may be rejected even if not identical.

2. Inadequate Registered Agent: Using yourself as registered agent means being available during business hours. Consider professional services if you travel frequently or want privacy.

3. Skipping Operating Agreement: While not required, operating agreements prevent disputes and provide legal protection for multi-member LLCs.

4. Ignoring EIN Requirements: Banks typically require an EIN to open business accounts, even for single-member LLCs.

5. Mixing Personal and Business Finances: Maintain separate bank accounts and records to preserve limited liability protection.

6. Forgetting Franchise Tax Thresholds: Monitor annual revenue to determine if franchise tax obligations apply once you exceed $2.47 million.

7. Incomplete Certificate Information: Double-check all addresses, names, and management structure details before filing to avoid rejection or amendment fees.

Related Guides

• How to Form LLC in California 2026: Complete Guide ($70 Fee)
• How to Form LLC in Delaware: Complete 2026 Guide ($90 Fee)
• How to Form LLC in Nevada: Complete 2026 Guide ($75 Fee)
• How to Form LLC in Ohio 2026: Complete Guide ($99 Fee)
• How to Form Corporation in Texas: 2026 Complete Guide

FAQ

How long does it take to form an LLC in Texas?

Standard processing takes 5-7 business days when filing online through SOSDirect. Expedited processing reduces this to 2-3 days for an additional fee. Mail submissions typically take longer due to postal delivery times.

Can I be my own registered agent in Texas?

Yes, you can serve as your own registered agent if you have a physical address in Texas and can be available during normal business hours. However, many business owners prefer professional registered agent services for privacy and reliability.

Do I need an operating agreement for my Texas LLC?

Texas law doesn’t require operating agreements, but they’re highly recommended, especially for multi-member LLCs. Operating agreements establish management structure, profit distribution, and member rights while providing legal protection.

What’s the difference between member-managed and manager-managed LLCs?

Member-managed LLCs allow all members to participate in daily operations and decision-making. Manager-managed LLCs designate specific managers (who may or may not be members) to handle operations while other members remain passive investors.

Can I form an LLC online in Texas?

Yes, Texas offers online LLC formation through SOSDirect, the Secretary of State’s online filing system. Online filing is faster and more convenient than mail submissions, with immediate confirmation of receipt.

Does Texas require LLC annual reports?

No, Texas doesn’t require LLCs to file annual reports. This reduces ongoing compliance costs and administrative burden compared to many other states.

When do I need to pay Texas franchise tax?

LLCs with annual revenue of $2.47 million or less owe no franchise tax. Only LLCs exceeding this threshold must file franchise tax reports and pay associated taxes.

Can foreign residents form a Texas LLC?

Yes, non-U.S. residents can form Texas LLCs. However, you’ll still need a registered agent with a Texas address and may face additional tax considerations that require professional advice.

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This article provides general information for educational purposes only. Business formation involves legal and tax considerations that vary by situation. Consult with an attorney or accountant for advice specific to your circumstances.