Choosing a company name is the first and most important step in starting your LLC. Be sure to choose a name that complies with Texas naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines:
- Your name must include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- 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.
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For a complete list of naming rules in Texas, you can read the Secretary of State's guidelines.
2. Is the name available in Texas? Make sure the name you want isn't already taken by doing a name search on the Texas Comptroller of Public Accounts website.
3. Is the URL available? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
FAQ: Naming an LLC
What is an LLC?
LLC is short for Limited Liability Company. It is a simple business structure that offers much more flexibility than a traditional corporation, while at the same time providing many of the same benefits. Learn more here.
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 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 a name other than that of your LLC. Learn more here.
You are required to nominate a Registered Agent for your Texas LLC.
What is a Registered Agent? A registered agent is a person or business that agrees to send and receive legal papers on behalf of your LLC. Such papers include service of process of legal action (if you are sued) and state filings.
Who can be a Registered Agent? A registered agent must be a resident of Texas or a corporation authorized to transact business in 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 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.
Learn more about the role of a registered agent and why you should consider hiring a professional service.
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Recommended: Incfile provides the first year of registered agent service free with LLC formation ($49 + State Fees)
FAQ: Nominating a Registered Agent
Can I be my own Registered Agent?
Yes. You or anyone else in your company can serve as the registered agent for your LLC. Learn more here.
Is a Registered Agent service worth it?
Using a professional Registered Agent service is an affordable way to manage government filings for your LLC. For most businesses, the advantages of using a professional service significantly outweigh the annual costs. Learn more here.
To register your LLC, you will need to file the Certificate of Formation with the Secretary of State. This can be done online or by mail.
When filing, you will need to state whether your LLC will be member-managed or manager-managed. We recommend learning more about these two options before you file.
File the Certificate of Formation
OPTION 1: File Online with the Secretary of State
OR
OPTION 2: File the Certificate of Formation by Mail
State Filing Cost: $300, payable to the Secretary of State. (Nonrefundable)
Mail to:
Secretary of State
P.O. Box 13697
Austin, TX 78711
Submit In-Person:
James Earl Rudder Office Building
1019 Brazos
Austin, TX 78701
Fax: (512) 463-5709
Processing Time: 3 business days online, 5 to 7 by mail.
If you’re expanding your existing LLC to the State of Texas, you need to form a Foreign LLC.
FAQ: Filing LLC Documents
What’s the difference between a domestic 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. Learn more here.
In Texas, LLCs are not required to have an operating agreement, but it's 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? An operating agreement is an important document because it ensures that all business owners are on the same page and reduces the risk of future conflict.
For more information on operating agreements, read our Texas LLC operating agreement guide.
Recommended: Use our free Operating Agreement Tool to draft a customized operating agreement for your LLC.
FAQ: Creating an Operating Agreement
Do I need to file my operating agreement with the state?
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.
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.
Why do I need an EIN? An EIN is required for the following:
- To open a business bank account for the company
- For Federal and State tax purposes
- To hire employees for the company
Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.
NOTE
FOR INTERNATIONAL APPLICANTS: You do not need an SSN to obtain an EIN. Learn more here.
Get an EIN
Option 1: Request an EIN from the IRS
OR
Option 2: Apply for an EIN by Mail or Fax
Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax:
(855) 641-6935
Fee: Free
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 application. Learn more here.
What tax structure should I choose for my LLC?
When you get 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.
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Find out which is best for you.
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
You can protect your business with these two steps:
1. Opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital later on.
Recommended: Compare business credit card offers at CreditCards.com. Learn more.
Even if you haven’t officially opened for business – it’s critical to get your books in order. A well managed accounting system will help you:
- Track your business finances, including bills, expenses, and income.
- Simplify your annual tax filings.
Quality accounting software makes the whole process fast and easy. Look for software that:
- Syncs with your bank automatically
- Matches transactions to invoices, bills, and purchase orders
- Can be accessed from your phone
- Makes it easy to work with your accountant
Recommended: FinancePal is a one stop shop to meet all your accounting and tax filing needs.
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.
- If you have employees in Texas, you will have to register for Unemployment Insurance Tax through the Texas Workforce Commission on behalf of your employees.
To operate your LLC, you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
Keep in mind that in order to get some licenses or permits, you may need to pay a fee, take classes, or pass an exam.
Research what types of federal, state, and local licenses and permits your LLC needs:
- Federal: Use the U.S. Small Business Administration (SBA) guide.
State: Use the Work Section at Texas.gov.
- Local: Contact your local county clerk and ask about local licenses and permits.
Recommended: If you are a first-time entrepreneur, consider having a professional service research your business’ licensing requirements. Our friends at Startup Savant have reviewed and ranked the top five license research services.
Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:
- General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
- Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. Get a free quote with ADP.
How much will the right insurance cost you? Click here to find out.
If you plan to hire employees, stay compliant with the law by following these steps:
- Verify that new employees are able to work in the US
- Report employees as "new hires" to the State
- Provide workers' compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your work space
Find more information at the Texas Workforce Commission website.
NOTE
The minimum wage in Texas is $7.25 per hour.
Recommended: A payroll service saves you time and makes it easier to follow these requirements.
We understand that creating an LLC 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:
- Mentoring
- Networking
- Business Planning
- Sales & Marketing
- Research Assistance
- Financial Planning
- Fundraising
- Legal Assistance
- Coworking
- Product Development
Texas requires LLCs to file an annual report along with your Franchise Tax. This form can be submitted through the Texas Comptroller of Public Accounts website. You will need to create an online account to complete the filing process.
File your Annual Report
File Online with the State of Texas
Fee: Free
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.
Reccomendation: The Texas Annual Report and Franchise Tax are complex, visit the Texas Comptroller website for more information.
Most LLCs will need to report their income to the IRS each year using:
- Form 1065 Partnership Return (most multi-member LLCs use this form)
- Form 1040 Schedule C (most single-member LLCs use this form)
Read our LLC Tax Guide to learn more about federal income taxes for LLCs.
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: Incfile offers a reliable registered agent service and excellent customer support.
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A Certificate of Good Standing, known in Texas as a Certificate of Status, verifies that your LLC 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
You can order a Texas LLC Certificate of Good Standing online.
Order a Certificate of Good Standing
Request a Certificate of Good Standing Online
Fee: $15 (Nonrefundable)
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 LLC, there are two broad steps:
- Close your business tax accounts
- File the Articles of Dissolution
When you are ready to dissolve your LLC, follow the steps in our Texas LLC Dissolution Guide.
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.
Register as a Foreign LLC in Texas
OPTION 1: File Online with the Secretary of State
OR
OPTION 2: File by Mail
Fee: $750 (Nonrefundable)
Mail to:
P.O. Box 13697
Austin, TX 78711
Submit In-Person:
James Earl Rudder Office Building
1019 Brazos
Austin, TX 78701
Fax: 512-463-5709
State of Texas Quick Links
- Secretary of State Corporations Section
- Official Texas Wide Open for Business
- SBA's Small Business Resource for Dallas / Ft. Worth Dallas / Ft. Worth
- SBA's Small Business Resource for El Paso
- SBA's Small Business Resource for Harlingen / Corpus Christi
- SBA's Small Business Resource for Houston
- SBA's Small Business Resource for Lubbock
- SBA's Small Business Resource for San Antonio