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Quick Facts: Forming an LLC in Texas

State fee: $300
Processing time: 3 to 5 business days (online)
Filing method: online or by mail
State agency: Texas Secretary of State

What Is an LLC?

A limited liability company (LLC) is a popular business structure that combines the liability protection of a corporation with the flexibility and tax benefits of a partnership or sole proprietorship. When you form an LLC, you create a distinct legal entity separate from yourself. This separation means that your personal assets, such as your home or savings, are generally protected if your business faces a lawsuit or incurs debt. It is an accessible option for many entrepreneurs seeking professional structure without overwhelming complexity.

Why Form an LLC in Texas?

Choosing to establish your business in Texas offers specific benefits for entrepreneurs. Texas has no state income tax, making it an appealing location to build and grow your company while maintaining the protections an LLC provides. The state's business-friendly regulatory environment and large consumer market make it one of the most popular states in the country for new business formation.

How to form an LLC with LegalNature

Step 1

Let us know your business details and needs.

Our form will walk you through all the important decisions and information.

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Step 2

Relax as we handle your Texas LLC formation.

We make the paperwork and file it with the secretary of state (SOS). You pay the $300 state filing fee.

Step 3

Start doing business!

We provide the documents and next steps for your business bank account, free tax consultation, and more!

What are the benefits of forming an LLC?

A Limited Liability Company (LLC) is the most popular business structure in the US today, and for good reason. The key benefits include:

Liability Protection

Owners and employees are shielded from becoming personal responsible for the company's debts and other obligations.

Simplified Tax Accounting

Unlike corporations, which file a separate tax return, LLC owners can simply pay all of their income taxes on their personal tax returns.

Easy to Set up and Operate

With fewer state requirements, LLCs are by far the easiest and most affordable business type to own and operate.

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How to Form an LLC in Texas

1. Choose a Name for Your Texas LLC

Your business needs a unique name that complies with state rules. In most cases, the name must include the phrase "limited liability company" or an abbreviation like "LLC." You will need to verify that your chosen name is available and not already in use by another business registered with the Texas Secretary of State. Keep in mind that Texas prohibits the use of words like "Bank" or "Trust" in a business name without special prior approval from the relevant state authority.

2. Appoint a Registered Agent

You must designate a registered agent for your business. A registered agent is a person or company who agrees to accept service of process notifications if the business is involved in a legal dispute. In Texas, you are required to have a registered agent with a physical address in Texas. The agent must be available during regular business hours to receive important legal and tax documents on behalf of your company.

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3. File Your Certificate of Formation

To officially create your LLC, you must submit a formal document to the state. In Texas, this document is called the Certificate of Formation — the Texas equivalent of what most states call articles of organization. You will file this paperwork with the Texas Secretary of State. The filing can be completed online through SOSDirect or by mail. Note that Texas requires a separate consent form for your registered agent's appointment, which must be included with your submission.

4. Create an Operating Agreement

An operating agreement is an internal document that outlines how your business will be run, including ownership percentages, management structure, and operational procedures. While Texas does not legally require you to file this document with the state, having a clear operating agreement is highly recommended to prevent future disputes and establish clear guidelines for your business. Texas is among the majority of states where an operating agreement is strongly advised but not statutorily mandated.

Learn more about LLC Operating Agreements

5. Get an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the IRS for tax purposes. You will need an EIN to open a business bank account, hire employees, and file certain taxes.

Let Us Help You Retrieve Your EIN

Texas-Specific LLC Details

While the steps above outline the general process, it is important to be aware of specific regulations in Texas.

Franchise Tax Obligations

Texas LLCs are subject to the state franchise tax, also called the "margin tax," which is calculated on revenue rather than profit. Most LLCs pay a rate on taxable margin which is adjusted by the state legislature periodically. As of 2026, LLCs with annualized total revenue at or below $2.65 million owe no tax but must still file a No Tax Due Report annually with the Texas Comptroller. Reports are due May 15 each year.

Annual Reporting

Texas does not require LLCs to file an annual report with the Secretary of State — but LLCs must file an annual franchise tax report with the Texas Comptroller regardless of whether any tax is owed. This report, due May 15 each year, serves as Texas's de facto annual filing requirement.

Costs to Form an LLC in Texas

The costs associated with forming an LLC in Texas can be broken down into a few categories.

Filing Costs: The primary expense is the fee to submit your Certificate of Formation to the Texas Secretary of State. In Texas, this filing fee is $300.

Ongoing Costs: Maintaining your business entity requires ongoing compliance. In Texas, this includes an annual franchise tax report, which may involve additional fees depending on your business's revenue. Most small LLCs below the revenue threshold pay the minimum franchise tax or no tax at all, but the report must still be filed.

Optional Costs: You may also choose to incur optional costs, such as hiring a professional registered agent service or utilizing document preparation services to assist with your paperwork. These services can reduce errors and save time, particularly for first-time business owners.

How Long Does It Take to Form an LLC in Texas?

The timeline for officially establishing your business can vary. In Texas, the typical processing time is 3 to 5 business days once your documents are received by the Texas Secretary of State. Factors such as the filing method you choose and the current volume of applications can affect this timeframe. Planning ahead and ensuring all paperwork is complete and accurate can help avoid unnecessary delays. Expedited processing is available for an additional fee if faster turnaround is needed.

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Frequently asked questions

What is an LLC?

An LLC, or Limited Liability Company, is a business structure that combines the personal asset protection of a corporation with the tax benefits and flexibility of a partnership

Is an LLC required to start a business?

An LLC is not required to start a business. Entrepreneurs can choose from various business structures, including sole proprietorships, partnerships, and corporations. However, forming an LLC offers several advantages, such as liability protection and tax flexibility, making it a popular choice for many small business owners

What is the difference between an LLC and a Corporation?

Ownership structure: LLCs are owned by their members which may also be managers, while corporations are owned by their shareholders
Management: LLCs offer more flexible management options, while corporations have a more rigid structure with directors and officers
Taxation: LLCs can choose their tax treatment, often opting for pass-through taxation, while corporations typically face double taxation
Paperwork and regulations: Corporations generally have more extensive recordkeeping requirements and stricter regulations compared to LLCs

Can a corporation start an LLC?

Yes, a corporation can start an LLC. In fact, many states allow various entities, including corporations, to be members (owners) of an LLC. This arrangement can be beneficial for corporations looking to create separate business units or subsidiaries with different liability protections or tax structures.

How much does it cost to start an LLC in Texas?

The primary cost is the state filing fee, which is $300 in Texas. You should also budget for ongoing compliance costs, including the annual franchise tax report. Optional costs such as registered agent services or document preparation assistance may also apply.

What is a registered agent?

A registered agent is a person or company who agrees to accept service of process notifications if the business is involved in a legal dispute. In Texas, your registered agent must have a physical address in the state and be available during regular business hours to receive important legal and government documents on behalf of your company.

Does Texas require an operating agreement for an LLC?

Texas does not legally require LLCs to have a written operating agreement, but having one is strongly recommended. An operating agreement establishes ownership percentages, management responsibilities, and dispute resolution procedures — all of which help protect your business and your relationships with co-owners.

What is the Texas franchise tax?

The Texas franchise tax is a tax on the privilege of doing business in Texas. Most LLCs are subject to it, though many small businesses fall below the "no tax due" threshold and owe nothing. Regardless of whether tax is owed, all LLCs must file an annual franchise tax report by May 15 each year.