How to Start an LLC in Texas (Step by Step)

Starting an LLC in Texas is straightforward and can be completed in six main steps. You’ll pay a $300 state filing fee, choose a registered agent, and file your Certificate of Formation with the Texas Secretary of State. The entire process takes about two weeks when filed online, and you’ll have a legally protected business entity that shields your personal assets.

Texas makes LLC formation particularly attractive for entrepreneurs. The state charges no franchise tax for most small LLCs, offers online filing that processes in 10-12 business days, and even waives the filing fee entirely for qualifying veterans.

Step 1: Choose and Search Your LLC Name

Your Texas LLC name must be unique and follow state naming requirements. It must be distinguishable from existing business entities registered in Texas and include “Limited Liability Company,” “LLC,” or “L.L.C.” somewhere in the name.

Texas prohibits certain words in LLC names without proper licensing or authorization, including “bank,” “insurance,” “university,” and professional service terms like “doctor” or “lawyer” unless you’re properly licensed.

How to Search Texas LLC Names

Before settling on a name, search the Texas Secretary of State database to ensure availability. You can search existing business names through the Texas Comptroller’s Public Information website or the Secretary of State’s entity search tool.

For detailed guidance on name searches and requirements, see our comprehensive Texas LLC name search guide.

Step 2: Appoint a Registered Agent

Every Texas LLC must have a registered agent with a physical Texas address (not a P.O. Box). The registered agent receives important legal documents, tax notices, and official correspondence on behalf of your LLC.

You have two options for your registered agent:

• Self-service: Act as your own registered agent if you have a Texas address and will be available during business hours
• Professional service: Hire a registered agent company for $50-$300 annually

Why Use a Professional Registered Agent

While you can serve as your own registered agent, most business owners choose a professional service for privacy, reliability, and convenience. Professional agents ensure you never miss important documents and keep your home address off public records.

For more details on registered agent requirements and options, visit our Texas registered agent guide.

Step 3: File Your Certificate of Formation

The Certificate of Formation (Form 205) officially creates your Texas LLC. You’ll provide basic information about your business and pay the $300 state filing fee.

Required Information for Form 205

• LLC name and any assumed names
• Registered agent name and Texas address
• Registered office address (usually same as registered agent)
• Management structure (member-managed or manager-managed)
• Organizer information (the person filing the documents)

Filing Options and Processing Times

Texas offers three ways to file your Certificate of Formation:

• Online SOS Direct: 10-12 business days processing, credit card payment accepted
• Online SOS Upload: 13-15 business days processing, upload your completed PDF
• Paper filing: 4-8 weeks plus mail time, send completed form by mail

The $300 filing fee applies regardless of filing method. Texas accepts American Express, Discover, MasterCard, and Visa for online payments.

Source: Texas Secretary of State, verified March 2026

Step 4: Create an Operating Agreement

While Texas doesn’t legally require an operating agreement, creating one protects your LLC’s limited liability status and prevents disputes between members. This document outlines ownership percentages, management structure, profit distribution, and procedures for major business decisions.

What to Include in Your Operating Agreement

• Member ownership percentages and capital contributions
• Management structure and decision-making authority
• Profit and loss distribution methods
• Procedures for adding or removing members
• Dissolution and buyout procedures

Even single-member LLCs benefit from operating agreements, as they demonstrate the separation between personal and business activities, which strengthens liability protection.

Step 5: Get Your EIN from the IRS

An Employer Identification Number (EIN) is required for tax purposes, opening business bank accounts, and hiring employees. You can obtain an EIN free directly from the IRS online, by phone, fax, or mail.

Apply online at the IRS website for immediate EIN approval. The process takes about 15 minutes and requires basic information about your LLC, including the formation date and business purpose.

Step 6: Open a Business Bank Account

Opening a separate business bank account is crucial for maintaining your LLC’s liability protection. Mixing personal and business finances can pierce the corporate veil, potentially exposing your personal assets to business liabilities.

A dedicated business account also simplifies bookkeeping, makes tax preparation easier, and provides clear documentation of business expenses and income. When choosing a business bank, look for accounts with no monthly maintenance fees, unlimited transactions, and competitive interest rates on deposits.

What Banks Require for LLC Accounts

Most banks require these documents to open a business account:

• Certificate of Formation from Texas Secretary of State
• EIN confirmation letter from the IRS
• Operating agreement (if you have multiple members)
• Personal identification for all account signers

Bluevine offers no monthly fees, unlimited transactions, and up to 3.0% APY on business checking accounts. Their mobile app makes banking convenient for busy entrepreneurs, and they integrate well with accounting software.

Step 7: Get Business Insurance

Business insurance protects your LLC from unexpected costs and liability claims. While your LLC structure provides personal asset protection, it doesn’t cover business assets or operations. Most Texas LLCs need at least general liability insurance, and some may require additional coverage based on their industry.

Common Types of LLC Insurance

• General liability: Covers third-party injury claims and property damage
• Professional liability: Protects against errors and omissions in professional services
• Commercial property: Covers business equipment, inventory, and physical locations
• Cyber liability: Protects against data breaches and cyber attacks

The specific insurance needs vary by industry, business size, and risk factors. Service-based businesses typically need professional liability coverage, while retail businesses require comprehensive general liability and property protection.

Next Insurance offers digital-first business insurance with instant quotes and affordable monthly payments. Their platform makes it easy to understand coverage options and adjust policies as your business grows.

Post-Formation Checklist

After your Texas LLC is approved, complete these additional steps to ensure full compliance and operational readiness:

Immediate Tasks (First 30 Days)

• Order certified copies of your Certificate of Formation
• Apply for required business licenses and permits
• Register for Texas state taxes if applicable
• Set up accounting and bookkeeping systems
• Create business cards, letterhead, and marketing materials

Ongoing Compliance Requirements

• File annual Public Information Report by May 15 (no fee for most LLCs)
• Pay franchise tax if annual revenue exceeds certain thresholds
• Maintain registered agent service
• Keep business records separate from personal activities
• Update state records for any changes in management or address

For comprehensive information about ongoing tax obligations, see our detailed Texas LLC taxes guide.

Timeline: How Long Does Texas LLC Formation Take?

The complete Texas LLC formation process typically takes 2-4 weeks from start to finish:

• Name search and preparation: 1-2 days
• Certificate of Formation processing: 10-12 business days (online SOS Direct)
• EIN application: Same day (online) or 2-4 weeks (mail)
• Bank account opening: 1-2 days after receiving formation documents
• Insurance application: 1-3 days for approval

You can expedite the process by filing online, applying for your EIN immediately after formation approval, and preparing all banking documents in advance.

Texas LLC Formation Costs Breakdown

Understanding the total cost helps you budget appropriately for LLC formation:

Minimum Cost (DIY Approach)

• State filing fee: $300
• EIN application: Free (direct from IRS)
• Operating agreement: Free (if you draft it yourself)
• Total minimum cost: $300

Typical Cost (Professional Services)

• State filing fee: $300
• Registered agent service: $50-$300 annually
• Professional formation service: $0-$200
• Operating agreement drafting: $200-$500
• Total typical cost: $550-$1,300 first year

Frequently Asked Questions

How much does it cost to start an LLC in Texas?

The minimum cost is $300 for the state filing fee if you handle everything yourself and serve as your own registered agent. Most business owners spend $550-$800 total in the first year when using professional services for registered agent and formation assistance.

How long does it take to form a Texas LLC?

Texas processes online Certificate of Formation filings in 10-12 business days using SOS Direct. The complete process from filing to operational status typically takes 2-3 weeks including EIN approval and bank account opening.

Do I need a registered agent for my Texas LLC?

Yes, every Texas LLC must have a registered agent with a physical Texas address. You can serve as your own registered agent or hire a professional service for $50-$300 annually.

Is an operating agreement required in Texas?

No, Texas doesn’t legally require operating agreements for LLCs. However, creating one strengthens your liability protection and prevents member disputes, making it highly recommended even for single-member LLCs.

What ongoing requirements do Texas LLCs have?

Texas LLCs must file an annual Public Information Report by May 15 each year (no fee for most LLCs) and pay franchise tax if annual revenue exceeds $2.47 million. Most small LLCs owe $0 in franchise tax.

Can I change my LLC name after formation?

Yes, you can change your LLC name by filing a Certificate of Amendment with the Texas Secretary of State. The amendment fee is $150, and processing takes the same time as initial formations.

Texas offers an excellent environment for LLC formation with reasonable fees, fast processing times, and business-friendly regulations. By following these six steps and maintaining proper compliance, you’ll have a legally protected business entity that can grow with your entrepreneurial ambitions.

This information is for educational purposes only and does not constitute legal or financial advice. Filing fees and requirements change : always confirm current fees with your state’s Secretary of State office.