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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.
- You can read the Texas Secretary of State's guidelines for a complete list of naming rules in Texas.
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.
Read our guide to learn more about searching for a Texas LLC name.
3. Is the URL available? 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 later, buying the domain name is a good idea to prevent others from acquiring it.
Once you have verified your name is available, you can select a professional service to complete the LLC formation process.
We reviewed and ranked the best LLC services. Find out which is best for you.
Step 2: Choose a Registered Agent in Texas
You are required to appoint a registered agent for your Texas LLC.
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. 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 following:
- 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 the registered agent
- The signature of the registered agent
- The date of execution
The consent statement doesn't have to be filed with the Secretary of State. For in-depth information on this requirement and a fillable consent form, view the Acceptance of Consent Form 401-A.
To learn more about Texas registered agents, read our full guide.
Recommended: Check out these best registered agent services.
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 apply online, by mail, or by fax.
When filing your Certificate of Formation, you must state whether your LLC will be member-managed vs. manager-managed.
File the Certificate of Formation
OPTION 1: File Form 205 Online with the Secretary of State
- OR -
OPTION 2: File the Certificate of Formation by Mail or by Fax
State Filing Cost: $300, payable to the Secretary of State. (Nonrefundable)
Secretary of State
P.O. Box 13697
Austin, TX 78711
Fax: (512) 463-5709
You may be eligible to file for free if you're a veteran. Simply obtain a Veteran Verification letter, complete Form 05-904, and submit it along with Form 205. In addition, your franchise tax will be waived for up to five years. As of right now, this is valid until December 31, 2025.
For help with completing the form, visit our Texas Certificate of Formation guide.
If you’re expanding your existing LLC to the state of Texas, you’ll need to register as a foreign LLC.
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 business owners are on the same page and reduces the risk of future conflict.
Read our Texas LLC operating agreement guide for more information on operating agreements.
Recommended: Download a template or create a Free Operating Agreement using our tool.
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 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:
- 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.
Step 6: File Your Texas Annual Report
In Texas, the annual report consists of two filings: the Public Information Report (PIR) and the Annual Franchise Tax Report. These are filed with the Texas Comptroller of Public Accounts by May 15 each year.
These forms have no set filing fee, as your Texas franchise tax payment will ultimately depend on your LLC’s total revenue. Most businesses will file a “No Tax Due” report. Veteran-owned LLCs can also waive their franchise tax for up to five years.
For more information, see our Texas LLC Annual Report guide.
Important: Persistent failure to file could lead to the dissolution of your Texas LLC.
Steps After LLC Formation
Read all the steps needed to maintain your LLC’s personal liability protection, open a business bank account, get business insurance, and stay current with state reporting requirements.
Visit our After Forming an LLC guide to learn more.
Step 7: Keep Your Company Compliant
Texas Business Licenses & Permits
You must comply with federal, state, and local government regulations to operate your LLC. Fees and requirements for licenses and permits will vary depending on what sort of business license you need.
Find out how to get your LLC's necessary Texas business licenses and permits with our Texas Business License guide.
Recommended: Consider having a professional service research your business’s licensing requirements. Read our best business license services review.
Texas LLC Tax Filing Requirements
It's essential to stay up to date on your Texas LLC taxes.
Depending on the nature of your business, you may be required to register for one or more forms of state tax:
If you sell a physical product, you’ll typically need to register for a seller's permit through the Texas Comptroller of Public Accounts. The state sales tax is 6.25% with an additional 2% max local tax rate.
If you have employees in Texas, you must register for Unemployment Insurance Tax through the Texas Workforce Commission on behalf of your employees.
Unlike most states, Texas doesn’t require a state income tax. However, you must report your federal income tax using either Form 1065 (for multi-member LLCs) or Form 1040 Schedule C (for single-member LLCs).
If you plan to hire employees for your Texas LLC, stay compliant with Texas law by following these steps:
- Verify that new employees can 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 workspace
Find more information at the Texas Workforce Commission website.
Check out our Hiring for Your Small Business Guide for resources like sample job descriptions, payroll service reviews, and more.
Common Questions About Texas LLCs
What is an LLC?
LLC is short for "limited liability company." It is a simple legal business entity that offers more flexibility than a traditional corporation while providing many of the same benefits. Read our What is a Limited Liability Company guide for more information.
Or, watch our two-minute What is an LLC video.
How do I name my Texas LLC?
You must follow the naming guidelines for a Texas limited liability company when choosing a name for your LLC:
- Include "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 have trouble creating a name for your LLC, use our LLC Name Generator. We’ll help you find a unique name for your business and an available URL to match.
After you get your business name, get a unique logo using our Free Logo Generator.
Do I need to get a DBA or assumed name for my business?
Most LLCs do not need a DBA, known as an assumed name in Texas. 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 to conduct business under another name.
To learn more about DBAs in your state, read our How to File a DBA in Texas guide.
Can I be my own registered agent?
Yes. You or anyone else in your company can serve as the registered agent for your LLC. Read about being your own registered agent.
What is the processing time to form my LLC in Texas?
Three business days online, five to seven by mail.
What is the difference between a domestic Texas LLC and a foreign LLC?
An LLC is called a "domestic LLC" when it conducts business in the state where it was formed. A foreign LLC must be created 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.
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 legally require LLCs to have an operating agreement.
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 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?
Most LLCs elect the default tax status (i.e., taxed as a sole proprietorship or partnership). However, some LLCs can reduce their federal tax obligation by choosing S corporation status. We recommend consulting with a local accountant to determine the best option.
Do I need an EIN for my LLC?
You will be informed of the different tax classification options when you obtain an EIN. Most LLCs elect the default tax status.
What is the Texas annual report & franchise tax?
There is an annual report and franchise tax for each LLC formed in Texas. This tax varies depending on your LLC’s income. Learn more here.
What is the minimum wage in Texas?
The minimum wage in Texas is $7.25 per hour.
How often do I need to pay employees?
Texas requires employees who are non-exempt from overtime to be paid semi-monthly. Employees that are exempt from overtime can be paid every month.
What is the sales tax in Texas?
The current sales tax rate for Texas is 6.25%. The maximum local tax rate, applied atop the state rate, is 2%.
How much does it cost to form an LLC in Texas?
It costs $300 to file your Certificate of Formation with the Texas Secretary of State and officially register your LLC with the state.