LLC Formation

Start a Texas LLC Today

A Step-by-Step Guide on forming a new Texas LLC in 2025. Launch your business in the Lone Star State with confidence.

A Texas LLC combines the personal asset protection of a corporation with the simplicity of a sole proprietorship or partnership.

Here’s why it’s a great option:

Liability Protection: Your personal assets, like your home or car, are generally shielded from business debts or lawsuits.
Tax Flexibility: LLCs enjoy pass-through taxation by default, but you can elect corporate taxation if it suits your business.
Minimal Red Tape: Texas has streamlined filing processes and reasonable fees, making it easier to maintain compliance.
Business-Friendly Climate: Texas boasts no state income tax for individuals, which can benefit LLC members.

Whether you’re launching a tech startup in Austin or a small ranching operation in West Texas, an LLC provides a versatile structure for your goals.

Step-by-Step Guide to Forming a Texas LLC

1. Choose a Unique Name for Your LLC

Your LLC’s name must be distinctive and comply with Texas regulations. It should:

Include "Limited Liability Company," "LLC," or "L.L.C."
Not contain restricted words like "bank" or "insurance" without proper authorization.
Be distinguishable from other registered Texas businesses.

Use the Texas Secretary of State’s SOSDirect portal to check name availability. Consider a name that reflects your brand, like "LoneStarTech LLC" for a tech consultancy or "HillCountryCrafts LLC" for a local artisan business.

Tip: Reserve your name for 120 days by filing Form 501 with the Texas Secretary of State for a $40 fee if you’re not ready to register immediately.

Start your business today!

Take advantage of our fast processing times and excellent customer service. Let us assist you in starting and managing your company.

2. Appoint a Registered Agent

Every Texas LLC needs a registered agent—a person or entity authorized to receive legal documents on behalf of your business. The agent must:

Have a physical address in Texas (no P.O. boxes).
Be available during regular business hours.

You can serve as your own registered agent, designate a trusted colleague, or hire a professional service for privacy and reliability.

3. File the Certificate of Formation

To officially form your LLC, file Form 205 (Certificate of Formation) with the Texas Secretary of State. Submit it online via SOSDirect, by mail, or in person. Include:

LLC name and purpose statement.
Registered agent’s name and address.
Whether the LLC is member-managed or manager-managed.
Duration of the LLC (usually perpetual unless specified).

The filing fee is $300 as of 2025. Processing takes 5–7 business days for online filings.

Pro Tip: Include a general purpose statement to keep your business options flexible, such as "to engage in any lawful activity."

4. Obtain an EIN from the IRS

An Employer Identification Number (EIN) is like a Social Security Number for your LLC. You’ll need it for:

Opening a business bank account.
Hiring employees.
Filing federal taxes.

Apply for an EIN free through the IRS website.

5. Draft an Operating Agreement

While not required in Texas, an Operating Agreement outlines:

Ownership percentages and member roles.
Profit and loss distribution.
Decision-making processes.
Procedures for adding or removing members.

For example, if you and a partner start a food truck LLC, the agreement might specify profit splits and roles.

6. Secure Necessary Licenses and Permits

Texas LLCs may need licenses based on location and industry, such as:

Sales and Use Tax Permit: Required for taxable goods or services.
Local Permits: Cities like Houston may require zoning permits.
Industry-Specific Licenses: Restaurants need health permits.

Check with the Texas Comptroller.

7. Open a Business Bank Account

Texas LLCs may need licenses based on location and industry, such as:

Separate personal and business finances with a dedicated LLC bank account. You'll need your EIN and Certificate of Formation.

8. Comply with Ongoing Requirements

Texas LLCs must:

File an Annual Franchise Tax and Public Information Report by May 15.
Maintain an updated registered agent.
Keep accurate records.

Check with the Texas Comptroller.

Formation Packages

Always transparent pricing from start to finish with no hidden fees.

Starter

Our Starter package is the most basic if you are comfortable doing most of the work yourself.

+ State Filing Fees

2-3 weeks processing*

Start your business with:

Comprehensive name availability check
File documents with the State
Lifetime customer support
Employer ID Number
Yearly Compliance
Operating Agreement
Business Documents
Priority Filing

Professional

Our most popular package provides you with all of the essentials needed to start your business.

$29

+ State Filing Fees

1-7 days processing*

Start your business with:

Comprehensive name availability check
File documents with the State
Lifetime customer support
Employer ID Number
Yearly Compliance
Operating Agreement
Business Documents
Priority Filing

Premium

For those of you that need everything to start your business and stay in full compliance.

$39

+ State Filing Fees

next business day processing*

Start your business with:

Comprehensive name availability check
File documents with the State
Lifetime customer support
Employer ID Number
Yearly Compliance
Operating Agreement
Business Documents
Priority Filing

Starter

Our Starter package is the most basic if you are comfortable doing most of the work yourself.

+ State Filing Fees

2-3 weeks processing*

Start your business with:

Comprehensive name availability check
File documents with the State
Lifetime customer support
Employer ID Number
Yearly Compliance
Operating Agreement
Business Documents
Priority Filing

Professional

Our most popular package provides you with all of the essentials needed to start your business.

$195

+ State Filing Fees

1-7 days processing*

Start your business with:

Comprehensive name availability check
File documents with the State
Lifetime customer support
Employer ID Number
Yearly Compliance
Operating Agreement
Business Documents
Priority Filing

Premium

For those of you that need everything to start your business and stay in full compliance.

$295

+ State Filing Fees

next business day processing*

Start your business with:

Comprehensive name availability check
File documents with the State
Lifetime customer support
Employer ID Number
Yearly Compliance
Operating Agreement
Business Documents
Priority Filing

FAQs for Texas LLCs

A Texas LLC is a business entity that offers personal liability protection, shielding owners’ assets from business debts, while maintaining flexible tax and management options. It’s ideal for Texas entrepreneurs due to the state’s streamlined filing process and no individual state income tax, making it cost-effective for startups and small businesses.

In a Texas LLC, your personal assets (e.g., home, car, savings) are generally separate from business liabilities. If the LLC faces debts or lawsuits, creditors typically cannot pursue your personal property, provided you maintain proper business practices, like separate banking.

Texas offers no state income tax, a $300 filing fee for the Certificate of Formation (competitive with other states), and a business-friendly environment with resources like the Texas Small Business Development Center. This makes it attractive for local and out-of-state entrepreneurs compared to states like Delaware, which may have higher costs for non-residents.

Choose a unique name that includes “Limited Liability Company,” “LLC,” or “L.L.C.” and complies with Texas rules (e.g., no restricted terms like “bank” without approval). Verify availability via the Texas Secretary of State’s SOSDirect portal and ensure it aligns with your brand, like “PrairieInnovations LLC” for a tech venture.

Name reservation is optional but recommended if you’re not ready to file immediately. File Form 501 with the Texas Secretary of State for a $40 fee to reserve your name for 120 days, preventing others from claiming it while you prepare.

A registered agent receives legal documents and state notices for your LLC. In Texas, they must have a physical address (no P.O. boxes) and be available during business hours. You, a colleague, or a professional service (e.g., LegalZoom) can act as the agent.

File Form 205 (Certificate of Formation) with the Texas Secretary of State via SOSDirect, mail, or in person. Include your LLC’s name, registered agent, management structure, and purpose. The filing fee is $300, with processing taking 5–7 business days for online submissions.

An Operating Agreement outlines your LLC’s ownership, roles, and operational rules. It’s not required by Texas law but is crucial for clarifying member responsibilities and protecting your LLC’s legal status, especially in multi-member LLCs or legal disputes.

You need an Employer Identification Number (EIN) from the IRS if your LLC has multiple members, employees, or elects corporate taxation. Single-member LLCs without employees may use the owner’s Social Security Number, but an EIN (free via IRS.gov) is recommended for banking and professionalism.

Texas LLCs benefit from no state income tax, but you must file an Annual Franchise Tax Report and Public Information Report by May 15 if revenue exceeds $1.23 million (2025 threshold). Federal taxes depend on your elected status (pass-through or corporate). Consult a tax professional for specifics.

Requirements vary by industry and location. You may need a Sales and Use Tax Permit for selling goods, local permits (e.g., zoning in Dallas), or industry-specific licenses (e.g., health permits for restaurants). Check with the Texas Comptroller and local authorities.

Yes, non-residents can form a Texas LLC by filing the Certificate of Formation and appointing a Texas registered agent. If you operate in your home state, you may need to register the Texas LLC as a foreign LLC there, incurring additional fees.

In a member-managed LLC, all owners (members) handle daily operations, ideal for small businesses. In a manager-managed LLC, designated managers (members or outsiders) run operations, suitable for larger LLCs or those with passive investors. Specify your choice in the Certificate of Formation.

Costs include: Name reservation (optional): $40. Certificate of Formation: $300. Registered agent service: $0 (self) or $100–$300/year (professional). Licenses/permits: Varies by industry. EIN: Free. Expect $350–$600 for initial setup, excluding legal or accounting fees.

File an Annual Franchise Tax Report and Public Information Report by May 15 with the Texas Comptroller (no tax if revenue is below $1.23 million). Keep your registered agent’s information updated and maintain records of your Operating Agreement and financials to stay in good standing.

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Start your business today!

Forming a Texas LLC in 2025 is a straightforward process that sets your business up for success. Start your journey with confidence in the Lone Star State!