How to Start an LLC in Texas

Starting an LLC in Texas is straightforward and can be done entirely online through the Texas Secretary of State. Texas offers business-friendly policies, no state income tax, and reasonable filing fees, making it an attractive state for entrepreneurs. Here’s your complete guide on how to start an LLC in Texas.

The process involves six main steps: choosing your business name, appointing a registered agent, filing your Certificate of Formation, creating an operating agreement, obtaining an EIN, and maintaining ongoing compliance with state requirements.

Table of Contents

• Step 1: Choose Your LLC Name
• Step 2: Appoint a Registered Agent
• Step 3: File Your Certificate of Formation
• Step 4: Create an Operating Agreement
• Step 5: Get Your Federal EIN
• Step 6: Ongoing Compliance
• Texas LLC Costs
• Frequently Asked Questions

Step 1: Choose Your LLC Name

Your Texas LLC name must be unique and follow specific state requirements. The name must be distinguishable from other business entities registered in Texas and cannot contain unauthorized business words that might mislead the public about your LLC’s purpose or activities.

Texas LLC Name Requirements

• Must include “Limited Liability Company,” “LLC,” or “L.L.C.”
• Cannot be identical or confusingly similar to existing business names
• Cannot suggest the LLC is organized for unauthorized purposes
• Cannot contain restricted words like “bank,” “insurance,” or “university” without proper licensing

Before settling on a name, search the Texas Secretary of State’s business database to ensure availability. You can conduct this search for free on their SOSDirect website. If you find your preferred name is available, you can optionally reserve it for 120 days by paying a $40 name reservation fee.

For detailed guidance on checking name availability and understanding Texas naming rules, 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 address in Texas. This person or company receives official legal documents, tax notices, and correspondence from the state on behalf of your LLC.

Registered Agent Requirements

• Must be at least 18 years old
• Must have a physical street address in Texas (no P.O. boxes)
• Must be available during normal business hours
• Can be yourself, another person, or a professional service

While you can serve as your own registered agent for free, many business owners choose professional registered agent services for privacy and reliability. Professional services typically charge between $50 and $300 annually and ensure you never miss important documents.

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

Step 3: File Your Certificate of Formation

The Certificate of Formation (Form 205) is the official document that creates your Texas LLC. You’ll file this with the Texas Secretary of State along with the required $300 filing fee.

Where to File

You have three options for filing your Certificate of Formation:

• Online (SOSDirect): 10-12 business days processing
• Online (SOS Upload): 13-15 business days processing
• By Mail: 4-8 weeks plus mail time

Required Information

Your Certificate of Formation must include:

• LLC name and type of entity
• Registered agent name and address
• Management structure (member-managed or manager-managed)
• Purpose of the LLC (can be general business purposes)
• Duration (perpetual is most common)

The $300 filing fee is the same regardless of whether you file online or by mail. Texas accepts major credit cards (American Express, Discover, MasterCard, and Visa) for online payments.

Texas does not offer expedited processing options, so plan accordingly if you need your LLC formed by a specific date. The online filing methods are significantly faster than mailing paper forms.

Source: Texas Secretary of State Certificate of Formation Guidelines, verified March 2026

Step 4: Create an Operating Agreement

While Texas doesn’t legally require an operating agreement, creating one is highly recommended for every LLC. This internal document outlines how your business will be managed, owned, and operated.

Why You Need an Operating Agreement

• Protects your limited liability status
• Prevents disputes between members
• Establishes management structure and decision-making processes
• Shows banks and creditors that your LLC is legitimate
• Overrides Texas’s default LLC laws when needed

Key Components to Include

• Member ownership percentages and capital contributions
• Profit and loss distribution
• Management structure and voting rights
• Procedures for adding or removing members
• Dissolution procedures

Even single-member LLCs benefit from operating agreements. The document demonstrates to courts and creditors that you’re running a legitimate business separate from your personal affairs.

Step 5: Get Your Federal EIN

An Employer Identification Number (EIN) is your LLC’s federal tax identification number. You’ll need an EIN to open a business bank account, file tax returns, and hire employees.

How to Apply for an EIN

The fastest and most common way to get an EIN is online through the IRS website. The process is free and takes just a few minutes. You can also apply by mail, fax, or phone, though these methods take longer.

To apply online, you’ll need your LLC’s legal name, formation date, registered agent information, and business address. The IRS will issue your EIN immediately after completing the online application.

Why You Need a Business Bank Account

A dedicated business bank account keeps your personal and business finances separate, which is essential for maintaining your LLC’s liability protection. It also makes bookkeeping easier and looks more professional to customers and vendors.

When choosing a business bank, look for accounts with no monthly maintenance fees, unlimited transactions, and good online banking features. Many banks offer special perks for new LLCs, such as waived fees for the first few months.

Step 6: Ongoing Compliance

After forming your Texas LLC, you’ll need to maintain good standing with the state through ongoing compliance requirements.

Public Information Report

Texas LLCs must file an annual Public Information Report by May 15th each year. This report updates the state on your LLC’s current information, including registered agent details and principal place of business. The good news is that this report is free for most LLCs.

Texas Franchise Tax

Texas imposes a franchise tax on most business entities, but many small LLCs qualify for exemptions. LLCs with total revenues of $1.18 million or less are generally exempt from franchise tax. Even if you owe franchise tax, the minimum annual payment is typically $0 for qualifying small businesses.

Federal Tax Obligations

Your Texas LLC will need to file federal tax returns, even though Texas has no state income tax. Single-member LLCs report business income on their personal tax returns, while multi-member LLCs file partnership returns.

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

Business Licenses and Permits

Depending on your business type and location, you may need additional licenses or permits. Check with your city, county, and relevant state agencies to ensure you have all required permits before starting operations.

Texas LLC Costs

Here’s a complete breakdown of costs to start and maintain an LLC in Texas:

Fee Type	Cost	When Due
Certificate of Formation	$300 ($0 for veterans)	At filing
Registered Agent (if hiring)	$50 – $300	Annual
Name Reservation (optional)	$40	Before filing
Public Information Report	$0	Annual (May 15)
Franchise Tax	Usually $0 for small LLCs	Annual
EIN	Free	One-time

Professional Formation Services

While you can file yourself, professional formation services can handle the paperwork and provide additional benefits:

• Northwest Registered Agent: $39 + state fee, same-day filing
• ZenBusiness: $0 + state fee (Starter plan), 2-3 weeks standard processing
• LegalZoom: $0 + state fee (Basic plan), 7-10 business days
• Bizee: $0 + state fee, next business day filing
• Inc Authority: $0 + state fee, 3-5 business days

Source: Texas Secretary of State, verified March 2026

Additional Business Considerations

Business Insurance

While forming an LLC provides liability protection, business insurance adds another layer of protection for your assets. General liability insurance protects against customer injuries, property damage, and advertising claims.

Professional liability insurance is important if you provide services or advice, while property insurance protects your business equipment and inventory. Workers’ compensation insurance is required if you have employees.

Accounting and Bookkeeping

Proper bookkeeping is essential for any LLC. You’ll need to track income, expenses, and maintain records for tax purposes. Good accounting practices also help you monitor your business’s financial health and make informed decisions.

Consider using accounting software to automate much of the bookkeeping process. Cloud-based solutions allow you to access your financial data anywhere and often integrate with your bank accounts for automatic transaction importing.

Building Your Online Presence

Most modern businesses need a professional website and online presence. A website establishes credibility, helps customers find you, and can generate leads 24/7.

When choosing web hosting, look for providers that offer reliable uptime, good customer support, and easy-to-use website builders. Many hosting companies include domain registration and email hosting in their packages.

Frequently Asked Questions

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

Online filing through SOSDirect takes 10-12 business days, while SOS Upload takes 13-15 business days. Mailing paper forms takes 4-8 weeks plus mail delivery time. Texas doesn’t offer expedited processing options.

Can I form a Texas LLC if I don’t live in Texas?

Yes, you can form a Texas LLC even if you don’t live in the state. However, you’ll need a registered agent with a Texas address. Many out-of-state business owners hire professional registered agent services to meet this requirement.

Do I need an operating agreement for my Texas LLC?

Texas doesn’t legally require an operating agreement, but it’s highly recommended. An operating agreement protects your limited liability status, prevents disputes, and shows that your LLC is a legitimate business separate from your personal affairs.

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

In a member-managed LLC, all owners (members) participate in day-to-day management decisions. In a manager-managed LLC, members appoint specific managers to handle daily operations while members retain ownership rights. Most small LLCs choose member-managed structure.

Can a Texas LLC have just one owner?

Yes, Texas allows single-member LLCs. The formation process is the same as for multi-member LLCs, though single-member LLCs are taxed differently (as sole proprietorships for federal tax purposes).

Compare Other States

Considering forming your LLC in a different state? Here are formation guides for other business-friendly states:

• California
• Colorado
• Alabama
• Arizona
• Arkansas
• Alaska
• Connecticut

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.