How to Start an LLC in Texas (2025 Guide)

How to Form an LLC in Texas in 5 Steps

In order to form your LLC in Texas, there are certain steps you’ll need to complete:

1. Name Your LLC
2. Choose a Texas Registered Agent
3. File Your Certificate of Formation
4. Create an LLC Operating Agreement
5. Obtain an EIN

Step 1: Name Your Texas LLC

Before you get started, you will need to pick a suitable name for your Texas LLC.

This will need to comply with all Texas naming requirements, be available, and (ideally) have a matching domain that you’ll use for your website.

1. Texas LLC Naming Guidelines

• Your name must include the phrase “limited liability company” or one of its abbreviations: “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.).
• Names must be distinguishable from other business entities in the state, including assumed names (DBAs).
• Your name cannot be considered grossly offensive to the point that it’s unacceptable as an entity name.
• Your name cannot include certain restricted words without prior written approval from the relevant state body (e.g., bank, olympic, college, etc).

We recommend checking out the Texas Secretary of State’s guidelines for a complete list of naming rules in this state.

2. Texas Name Availability Search

To check whether your desired name has already been taken by another business entity in Texas, you can perform a Taxable Entity Search on the Texas Comptroller of Public Accounts website.

If you’re not going to start your LLC right away, it might be a good idea to consider reserving your name for up to 120 days ($40 processing fee).

For more information, you can have a look at our Texas LLC Name Search guide.

3. Finding the Right Domain

You should check online to see if your business name is available as a web domain. Even if you plan to create a business website right away, this is an extremely important step as it will prevent others from acquiring it, potentially saving you both time and money in the long term.

Once you have verified your name is available, you can select a professional service to complete the LLC formation process.

FAQ: Naming a Texas LLC

Step 2: Choose a Registered Agent in Texas

After you find the right name for your LLC, you will need to assign a Texas registered agent. This is a necessary step in your Certificate of Formation, which is the document used to file and register your LLC with the Secretary of State.

What is a registered agent?

A registered agent is an individual or business entity responsible for receiving necessary tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. You can think of your registered agent as your business’s primary point of contact with the state.

Who can be a registered agent?

A registered agent must be a resident of Texas or a corporation authorized to transact business in the state. You can choose to elect an individual within the company (e.g., yourself, etc.), use an attorney (not recommended due to the high cost), or go with a registered agent service. 

Important: Your registered agent must consent to appointment in written or electronic form. The statement of consent should include the following:

1. The name of your LLC
2. An express statement that the person designated consents to serve as the LLC’s registered agent
3. The name of the person designated as the registered agent
4. The signature of the registered agent
5. The date of execution

Keep in mind that this consent statement doesn’t have to be filed with the Secretary of State.

FAQ: Nominating a Registered Agent

Step 3: File the Texas LLC Certificate of Formation

To register your Texas LLC, you must file Form 205 – Certificate of Formation with the Texas Secretary of State. You can do this online, by mail, or by fax.

Before filing, make sure you have completed your Certificate of Formation correctly. You will need to have filled in the following sections:

• Your LLC’s entity name and type
• The name and physical street address of your registered agent
• How your LLC is managed (i.e., member-managed or manager-managed)
• The name and address of each initial governing person
• Your LLC’s initial mailing address (i.e., the mailing address for state franchise tax correspondence)
• Any supplemental provisions or information
• The name and address of the organizer
• The date/event after which the Certificate of Formation becomes effective

File the Certificate of Formation

OPTION 1: File Form 205 Online with the Secretary of State

File Online

– OR –

OPTION 2: File the Certificate of Formation by Mail or by Fax

Download Form

State Filing Cost: $300, payable to the Secretary of State. (Nonrefundable)

Mail to:
Secretary of State
P.O. Box 13697
Austin, TX 78711

Fax: (512) 463-5709

Keep in mind that you may be eligible to file for free if you’re a veteran. For more information on this, you can have a look at our Texas Certificate of Formation guide.

Note: If you’re expanding your existing business to the state of Texas, you’ll need to register as a foreign limited liability company (LLC).

FAQ: Filing Texas LLC Documents

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 having one is a good practice.

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 LLC members are on the same page and reduces the risk of future conflict.

You can use the free tool in our Business Center to create a custom operating agreement in minutes — or download our free templates:

• Texas Single-Member LLC Operating Agreement
• Texas Multi-Member LLC Operating Agreement

FAQ: Creating a Texas LLC Operating Agreement

Step 5: Get an EIN for Your Texas LLC

You can get an Employer Identification Number (EIN) from the IRS for free. It is used to identify business entities and keep track of their 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:

• 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.

FOR INTERNATIONAL APPLICANTS: You do not need an SSN to obtain an EIN. Read our guide to getting an EIN for international entrepreneurs.

Get an EIN

Option 1: Request an EIN from the IRS

Apply Online

– OR –

Option 2: Apply for an EIN by Mail or Fax

Download Form

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

FAQ: Getting an EIN

Best LLC Services in Texas Compared

For a comprehensive comparison, read our Best LLC Service guide. We reviewed and ranked the top LLC formation services to help you determine the best fit for your new business.

Important Next Steps to Protect Your Texas LLC

After you’ve formed your LLC, you’ll need to complete several key steps in order to:

• Separate your personal and business assets
• Stay compliant with state and federal laws

1. Get a Business Bank Account and Credit Card

Getting a dedicated business bank account is an essential part of operating legitimately as it keeps your personal and business assets separate, and therefore helps shield your personal limited liability. 

Skipping this step can often lead to:

• Courts determining that you haven’t been treating your LLC as a separate entity
• Your “corporate veil” being pierced, meaning that you will no longer benefit from limited liability in law. 

You can also choose to acquire a corporate credit card if you’re interested in building your credit and potentially raising capital down the line. 

2. Check If You Need a Texas Business License

Texas does not require LLCs to hold a “general” business license in order to operate. 

Even so, you should know that business licensing is regulated at a local, state, and federal level, so your licensing needs will ultimately depend on your exact location and industry.

• Local Licenses: You’ll need to check with your city or county clerk’s office to identify any local licensing requirements, such as zoning permits or health department approvals you’ll need. 
• State-Level Licenses: You can use this detailed PDF document provided by the Secretary of State for all state-issued licenses and permits that may apply to your LLC. 
• Federal Licenses: While most Texas LLCs will not be subject to federal regulation, those involved in heavily regulated industries (such as agriculture, alcohol, and firearms) will. You can have a look at this Small Business Administration article for the relevant federal agency you’ll need to contact.

A few questions to ask yourself when deciding whether you need a license include:

• Will you sell, lease, or rent taxable goods or services? If so, you’ll likely need a Sales Tax Permit from the Texas Comptroller of Public Accounts. You can find more information on this on our Texas Sales Tax guide. 
• Will you work as a licensed professional? If your LLC will focus on regulated fields — such as medicine, law, insurance, or real estate — you’ll need to ensure that you or a member of your LLC is appropriately licensed.
• Will your LLC’s activities negatively impact the environment? If so, you might need to obtain a business license or permit from the Texas Commission on Environmental Quality.

3. Understand Your Texas LLC Tax Obligations

Texas LLCs are not all taxed in the same way; this is because LLCs are taxed as pass-through entities by default, meaning that they are largely taxed similarly to sole proprietors — the business gets paid, the profits pass to you as the owner, and you get taxed. There is no “corporate” tax involved. 

This means that:

On a Federal Level

You’ll need to submit personal income tax returns using either Form 1040 (for single member LLCs) or Form 1065 (for multi-member LLCs). If you have employees, you will also be subject to federal income tax withholding. 

On a State Level

Your LLC may have to pay additional taxes — such as sales taxes, franchise taxes, and transportation taxes. Keep in mind that Texas does not impose a state income tax. 

On a Local Level

Your LLC may be required to pay property and even sales and use taxes on a county level. For the latter, this will need to be paid in addition to the state sales and use tax that Texas imposes.

For more information on the Texas-specific LLC tax obligations that may apply to you, we recommend having a look at our in-depth Texas LLC Taxes guide. Alternatively, you can schedule a free online consultation with 1-800 accountant for all your tax-related questions.

4. Get Business Insurance for Your LLC in Texas

Even though an LLC offers limited liability, you’ll still likely need to purchase some form of business insurance to protect your LLC’s assets. 

This is because an LLC’s default limited liability protects your personal assets, not the business’s. Some of the most common types of business insurance include:

• General Liability Insurance: This is a broad insurance policy that protects your business from lawsuits. Most small businesses end up getting general liability insurance.
• Professional Liability Insurance: This is a business insurance policy 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. In Texas, businesses are not legally required to obtain this (unlike most states).

Want to learn exactly what coverage your Texas business may need? Read our full Texas Business Insurance guide.

5. Learn How to Properly Sign Your LLC’s Legal Documents

Improperly signing a document as yourself and not as a representative of the business can leave you open to personal liability. 

When signing legal documents on behalf of your company, you we recommend following this formula to avoid any problems:

• Formal name of your business
• Your signature
• Your name
• Your position in the business as its authorized representative

6. Complying With Your Annual Filing Requirements

Complying with your Texas LLC’s annual filing requirements will generally involve filing a Public Information Report (PIR), which is the equivalent of an annual report in states outside of Texas. LLCs that exceed an annual income threshold of $2.47 million will also need to file a Franchise Tax Report. 

Submit a Public Information Report for Your Texas LLC

In order to ensure that your Texas LLC maintains its good standing with the state, you’ll be required to submit a Public Information Report with the Texas Comptroller of Public Accounts each year by May 15. 

This is meant to ensure that the state’s records of your business are up to date, and will require you to provide details such as your registered agent information and principal business address. 

To submit your PIR, you’ll be able to either:

• Submit it online via the Webfile platform
• Mail it to the following address:
  • Texas Comptroller of Public Accounts
  • P.O. Box 149348
  • Austin, TX 78714-9348

Important: Make sure to file this on time, as failure to do so can lead to your LLC forfeiting its right to sue in Texas or defend itself in court against allegations. All LLC members and directors will also become publicly liable for debts that arise. 

Submit an Annual Franchise Tax Report (If Applicable)

If your Texas LLC ends up earning more than $2.47 million in annual revenue, you’ll be required to file an annual franchise tax report with the Comptroller’s office; this is also due by May 15 each year. 

The tax rate for this will depend on what your LLC is selling:

• Retail or wholesale: 0.375%
• Everything else: 0.75%

Note: Texas LLCs that earned under the $2.47 million threshold used to be required to file what’s known as a “No Tax Due Report” each year. This was abolished from January 24 onwards, so if you see any outdated data online please feel free to ignore it. 

Late Filing Fee Notice: A $50 late fee is imposed on LLCs that fail to submit their franchise tax report on time. 

To stay on top of this deadline and other important compliance tasks, we recommend hiring a professional registered agent service — they can help ensure you never miss a filing.

Texas Business Resources

Business Center

Check out our business center for regular updates, vetted reviews, free downloadables, and video guides that aim to help you start and grow your business. 

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Local Resources

Have a look at Texas’s local business resources:

• Secretary of State Corporations Section
• Texas Small Business Resources
• Texas LLC Statutes

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