To start a Texas LLC, you'll need to file the Certificate of Formation with the Texas Secretary of State, with a filing fee of $300. You can apply online or by mail. The Certificate of Formation is the legal document that officially creates your Texas LLC.
Follow our step-by-step How to Start an LLC in Texas guide to get started today. You can learn more about LLCs and their benefits in our What is an LLC guide.
STEP 1. Name Your Texas LLC
Choosing a company name is the first and most important step in starting your LLC in Texas. Be sure to choose a name that complies with Texas naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines for a Texas LLC:
Your name must include the phrase “limited liability company,” or one of its abbreviations or words: “LLC, L.L.C., Limited, Ltd., Company or Co.”
Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
3. Is the URL available? We recommend that you check online to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.
LLC is short for Limited Liability Company. It is a simple business structure that offers more flexibility than a traditional corporation while providing many of the same benefits. Read "What is a Limited Liability Company?" for more information.
You must follow the Texas LLC naming guidelines when choosing a name for your LLC:
Include the phrase "limited liability company" or one of its abbreviations (LLC or L.L.C.).
Do not use words that could confuse your business with a government agency (FBI, State Department, CIA, etc.).
Receive the proper licensing when using the words such as lawyer or doctor.
If you are having trouble coming up with a name for your LLC use our LLC Name Generator. That will not only find a unique name for your business but an available URL to match.
After you get your business name, your next step is getting a unique logo. Get your unique logo using our Free Logo Generator.
Do I need to get a DBA or Trade Name for my business?
Most LLCs do not need a DBA. The name of the LLC can serve as your company’s brand name and you can accept checks and other payments under that name as well. However, you may wish to register a DBA if you would like to conduct business under another name.
What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business' point of contact with the state.
Who can be a Registered Agent? A registered agent must be a resident of Texas or a corporation, such as a registered agent service, authorized to conduct business in the state of Texas. You may elect an individual within the company including yourself.
A Registered Agent must consent to Appointment in written or electronic form. The statement of consent should include:
The name of your LLC
An express statement that the person designated consents to serve as the LLC’s registered agent
The name of the person designated as registered agent
The signature of the registered agent
The date of execution
The consent statement does not have to be filed with the secretary of state. For in-depth information on this requirement, as well as a fillable consent form, view the Acceptance of Consent Form 401-A.
If you’re expanding your existing LLC to the state of Texas, you’ll need to register as a Foreign LLC.
FAQ: Filing Texas LLC Documents
What is the processing time to form my LLC in Texas?
3 business days online, 5 to 7 by mail.
What is the difference between a domestic Texas LLC and foreign LLC?
An LLC is referred to as a "domestic LLC" when it conducts business in the state where it was formed. Normally when we refer to an LLC we are actually referring to a domestic LLC. A foreign LLC must be formed when an existing LLC wishes to expand its business to another state. If you are filing as a Foreign Texas LLC read our guide for more information.
STEP 4. Create a Texas LLC Operating Agreement
An operating agreement, known in Texas as a company agreement, isn’t required for Texas LLCs, but it’s a good practice to have one.
What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.
Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.
Do I need to file my operating agreement with the State of Texas?
No. The operating agreement is an internal document that you should keep on file for future reference. However, many states do legally require LLCs to have an operating agreement in place.
STEP 5. Get an EIN for your Texas LLC
What is an EIN? The Employer Identification Number (EIN), Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN), is a nine-digit number issued by the Internal Revenue System (IRS); an Employer ID Number is used to identify a business entity and keep track of a business’s tax reporting. It is essentially a Social Security number (SSN) for the company.
Why do I need an EIN? An EIN number is required for the following:
State Filing Cost: $300, payable to the Secretary of State. (Nonrefundable)
Mail to: Internal Revenue Service Attn: EIN Operation Cincinnati, OH 45999
FAQ: Getting an EIN
How do I get an EIN if I don’t have a Social Security number?
An SSN is not required to get an EIN. You can simply fill out IRS Form SS-4 and leave section 7b blank. Then call the IRS at 267-941-1099 to complete your EIN application. Read our guide for international EIN applicants.
What tax structure should I choose for my LLC?
When you obtain an EIN, you will be informed of the different tax classification options that are available. Most LLCs elect the default tax status.
However, some LLCs can reduce their federal tax obligation by choosing S corporation status. We recommend consulting with a local accountant to find out which option is best for you.
Do I need an EIN for my LLC?
All LLCs with employees, or any LLC with more than one member, must have an EIN. This is required by the IRS.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your Texas LLC is sued. In business law, this is referred to as piercing the corporate veil.
You can start protecting your LLC in Texas with these steps:
1. Opening a business bank account:
Separates your personal assets from your company's assets, which is necessary for personal asset protection.
Creating a website is a big step in legitimizing your business. Every business needs a website. Even if you think that your business is too small or in an offline industry, if you don’t have a website, you are missing out on a large percentage of potential customers and revenue.
Some may fear that creating a business website is out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own and control.
Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
State: Apply for or learn more about licenses, permits and registration with The State of Texas' Work Section.
Local: Contact your local county clerk and ask about local business licenses and permits.
Recommended: If you are a first-time entrepreneur, consider having a professional service research your business’s licensing requirements. Read our best business license services review on Startup Savant.
Texas LLC Tax Filing Requirements
Depending on the nature of your business, you may be required to register for one or more forms of state tax:
If you are selling a physical product, you’ll typically need to register for a seller's permit through the Texas Comptroller of Public Accounts.
This certificate allows a business to collect sales tax on taxable sales.
Sales tax, also called "Sales and Use Tax," is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.
Read our LLC Tax Guide to learn more about federal income taxes for LLCs.
Texas Annual Report & Franchise Tax
LLCs in Texas are required to file an annual report and Franchise Tax with the Texas Comptroller of Public Accounts. These can only be filed online at the Texas Comptroller website. You will need to create an online account to complete the filing process.
Tax Calculation: LLCs with annualized revenue below $1,130,000 do not pay any tax, but must file a “no tax due report.” LLCs with annualized revenue greater than $1,130,000 pay a graduated tax that is calculated based on a complex formula.
Due Date: Due by May 15 each year. Reports do not need to be filed in the same year that an LLC is formed. If your LLC was formed in March 2018, then your first report is due on May 15, 2019.
Late Filings: Texas charges a $50 penalty for failure to file on time (whether or not you have tax due). Additionally, a late tax payment is subject to a 5% penalty fee, which increases to 10% if you pay after 30 days.
Recommendation: The Texas Annual Report and Franchise Tax are complex, visit the Texas Comptroller website for more information.
Avoid Automatic Dissolution
LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines, and even submitting reports on your behalf for an additional fee.
Recommended:Northwest offers a reliable registered agent service and excellent customer support. Learn more by reading our Northwest Review.
If you plan to hire employees for your Texas LLC, stay compliant with the law by following these steps:
Texas requires employees who are non-exempt from overtime to be paid semi-monthly. Employees that are exempt from overtime can be paid on a monthly basis.
Small Business Resources
Get Help Starting a Business in Texas
We understand that creating an LLC in Texas and getting your business up and running comes with many challenges. To help you succeed, we compiled the best local resources in every major metro area in Texas. You can get free assistance in the following areas:
TRUiC believes business tools should be free and useful. Our tools help solve business challenges, from finding an idea for your business, to creating a business plan, writing an operating agreement for your LLC, and more.
Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in Texas, you will need to register as a foreign LLC. This can be done by mail or online.
James Earl Rudder Office Building
Austin, TX 78701
How to Obtain a Certificate of Good Standing in Texas
A Certificate of Good Standing, known in Texas as a Certificate of Status, verifies that your LLC in Texas was legally formed and has been properly maintained. Several instances where you might need to get one include:
Seeking funding from banks or other lenders
Forming your business as a foreign LLC in another state
Obtaining or renewing specific business licenses or permits
If at any point in the future you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your Texas LLC, there are two broad steps: