Starting an LLC in Texas is Easy
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.
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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.
- For a complete list of naming rules in Texas, you can read the Texas 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.
To learn more about searching for a Texas LLC name, read our full guide.
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.
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 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.
To learn more about Texas Registered Agents, read our full guide.
Recommended: Northwest provides the first year of registered agent service free with LLC formation ($29 + State Fees)
STEP 3. File The Texas LLC Certificate of Formation
To register your Texas LLC, you'll need to file Form 205 - Certificate of Formation with the Texas Secretary of State. You can apply online, by mail, or in person.
When filing your Certificate of Formation, you’ll need to 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
State Filing Cost: $300, payable to the Secretary of State. (Nonrefundable)
Secretary of State
P.O. Box 13697
Austin, TX 78711
James Earl Rudder Office Building
Austin, TX 78701
Fax: (512) 463-5709
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 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.
For more information on operating agreements, read our Texas LLC operating agreement guide.
Recommended: Download a template or create a Free Operating Agreement using our tool.
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:
- 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.
Frequently Asked Questions
What is an LLC?
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.
Watch our 2 minute video: What is an LLC?
How do I name my Texas LLC?
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.
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?
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.
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.
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.
Learn why we recommend always getting an EIN and how to get one for free in our Do I Need an EIN for an LLC guide.
What is the Texas Annual Report & Franchise Tax?
There is an Annual Report & Franchise Tax for each LLC formed in Texas which varies depending upon 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 on a monthly basis.
Considering Using an LLC Formation Service?
We reviewed and ranked the top 5 LLC formation services. Find out which is best for you.Best LLC Services
Important Steps After Forming an LLC
Separate Your Personal and Business Assets
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.
- Makes accounting and tax filing easier.
Need help finding your EIN for your bank application? Visit our EIN Lookup guide for help.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
2. Getting a business credit card:
- Helps categorize and separate all business expenses for end-of-year tax purposes.
- Helps build your business credit score — an essential step toward getting a line of credit or business loans in the future.
- Allows you to keep track of department expenses by issuing multiple cards (with multiple budgets) to your employees.
For a closer look at business credit cards and their benefits, check out our review of the best small business credit cards.
Recommended: Visit Divvy to apply for their business credit card and build your business credit quickly.
3. Hiring a business accountant:
- Prevents your business from overpaying on taxes while helping you avoid penalties, fines, and other costly tax errors.
- Makes bookkeeping and payroll easier, leaving you with more time to focus on your growing business.
- Manages your business funding more effectively, discovering areas of unforeseen loss or extra profit
Recommended: Find out how much you could be saving today by scheduling a consultation with a business accountant.
For more business accounting tools, read our guide to the best business accounting software.
Get Business Insurance for Your LLC
Business insurance helps you manage risks and focus on growing your LLC. 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 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.
Ready To Protect Your Business? Get the protection you need with a dedicated small business insurance provider. Find out how much insurance will cost you by getting a quote from our partners at Next Insurance.
Read our review of the best small business insurance companies.
Create Your Website
Creating a website is an important step in legitimizing your business. Every business needs a website if you want your customers to find you.
Send Out a Press Release
Press releases are among the easiest and best ways to promote your business. They are also one of the most cost-effective strategies as they:
- Provides publicity
- Establish your brand presence on the web
- Improve your website’s search engine optimization (SEO), driving more customers to your website
- Are a one-time cost in terms of effort and money
- Have long-lasting benefits
Read our review of the best press release services.
Keep Your Company Compliant
Texas Business Permits & Licenses
Do I need business licenses and permits?
To operate your LLC in Texas you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.
Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.
Find out how to obtain necessary Texas business licenses and permits for your LLC or have a professional service do it for you:
- Business License Guide: Use our detailed Texas Business License guide.
- Federal: Use the U.S. Small Business Administration (SBA) guide to federal business licenses and permits.
- State: Apply for or learn more about licenses, permits and registration one the state of Texas' website.
- 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:
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 Texas sales tax guide to find out more.
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.
Federal LLC Tax Filing Requirements
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)
How you pay yourself as an owner will also affect your federal taxes. Visit our guide to learn more about how to pay yourself from your LLC.
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.
File your Annual Report & Franchise Tax
File Online with the State of Texas
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.
If you plan to hire employees for your Texas LLC, 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.
Recommended: Check out our Hiring for your Small Business Guide for resources like sample job descriptions, payroll service reviews, and more.
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.
Local Resources in Texas
State of Texas Quick Links
More Texas LLC Information
Texas Foreign LLCs
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)
P.O. Box 13697
Austin, TX 78711
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
You can order a Texas LLC Certificate of Status online.
ORDER A CERTIFICATE OF GOOD STANDING
Request a Texas Certificate of Status Online
Fee: $15 (Nonrefundable)
How to Dissolve an LLC in Texas
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:
- 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.