Filing an LLC in Texas: Form 205, EIN, and Franchise Tax

To file an LLC in Texas, you submit a Certificate of Formation (Form 205) to the Texas Secretary of State and pay a $300 filing fee.¹ That single filing is what creates the entity. Everything else — picking an available name, naming a registered agent, getting a federal tax ID, choosing how the IRS will tax you, and keeping up with the annual franchise tax report — either leads into that filing or follows from it.

Pick a Name That Clears the State’s Rules

Your LLC name has to be distinguishable from every other entity on file with the Secretary of State, including active LLCs, corporations, limited partnerships, and names someone else has reserved.² “Distinguishable” is a lower bar than “completely different,” but names that look or sound nearly identical get rejected.

The name also has to signal the entity type. Texas law requires some form of the words “Limited Liability Company,” or an abbreviation like “LLC” or “L.L.C.,” in the name itself. Before you file, run your preferred name through the Secretary of State’s online entity search. Catching a conflict there is cheap. Finding out after your Certificate of Formation comes back rejected costs you a round trip.

Line Up a Registered Agent

Every Texas LLC must have a registered agent and a registered office in the state. The agent is the person or company authorized to accept legal documents on the LLC’s behalf, including lawsuits, government notices, and tax correspondence.³

The registered office has to be a physical Texas street address where someone can hand-deliver legal papers during business hours. A mailbox service or answering service alone will not do.³ A commercial mail center can be the registered office only if that same business is also serving as the registered agent.⁴ An individual agent must be a Texas resident. An organization agent must be authorized to do business in Texas and have someone on hand at the office to accept service.

The agent has to consent to the role in writing or electronically. The Secretary of State publishes Form 401-A for that consent, but you do not file it with the state. You keep the signed form in your own LLC records.⁵

Letting your registered agent lapse is one of the fastest ways to lose your LLC. Without a valid agent on file, the state can administratively terminate the entity, which strips it of standing to operate or even defend itself in court. Commercial registered agent services generally run $49 to $149 per year.

Complete and File Form 205

Form 205 is the document that actually creates the LLC. The Secretary of State reviews it for completeness, not substance, so missing fields or incorrect names and addresses get the form kicked back.

Governing Authority

The form asks you to choose how the LLC will be managed. A member-managed LLC means the owners run day-to-day operations. A manager-managed LLC means designated managers handle business decisions while members stay more passive. You pick one option and list the name and address of each initial manager (if manager-managed) or each initial member (if member-managed).⁶ Those individuals do not have to be Texas residents, but their contact information becomes public record.

Purpose and Organizer

The form also asks for the LLC’s purpose. Most filers use a general clause like “any lawful purpose” to keep future options open. You also identify the organizer, which is simply the person signing and submitting the form. That role is purely administrative; being the organizer does not give someone ownership in the LLC.

How to Submit It

As of September 2025, the Secretary of State accepts business entity filings through SOSDirect (the online portal), SOSUpload, in person, by mail, or by courier. Fax is no longer accepted.⁷

SOSDirect lets you submit Form 205 electronically and pay the $300 fee by credit card or a pre-funded account.¹ Online filings generally process faster than paper. SOSUpload is a separate electronic option for uploading a completed PDF. By mail, you send two signed copies of the Certificate of Formation plus a check or money order for $300 to the Secretary of State in Austin.⁶ Paper filings take longer, especially during high-volume periods.

Once the filing is approved, you get back a file-stamped copy of the Certificate of Formation and a formal certificate of filing. Save them. You will need them to open a bank account, apply for an EIN, and handle licensing.

Write an Operating Agreement

Texas does not require an LLC to have a written operating agreement, but going without one is a mistake most owners only make once. The agreement — called a “company agreement” in the Texas Business Organizations Code — governs how members relate to each other, how profits and losses are divided, what happens when someone leaves, and how major decisions get made.⁸

Without one, your LLC defaults to the rules in the Business Organizations Code, which may not match what the owners actually intended. Single-member LLCs benefit from an agreement too, because it reinforces the separation between the owner’s personal assets and the business. Banks sometimes ask to see it, and courts look at whether one exists when deciding how seriously to take the LLC’s separate legal identity.

Get a Federal EIN

An Employer Identification Number is the federal tax ID for your business. You need one to open a business bank account, hire employees, and file federal returns. The IRS issues EINs for free and warns applicants away from third-party sites that charge for the service.⁹

The fastest route is the IRS online application, which issues the number immediately. You identify a “responsible party” for the LLC and provide that person’s Social Security number, Individual Taxpayer Identification Number, or existing EIN.¹⁰ If you cannot use the online tool, the IRS also accepts Form SS-4 by mail or fax, though those methods take significantly longer.

Decide How the IRS Will Tax Your LLC

The IRS does not treat LLCs as their own tax category. It assigns a default based on how many members the LLC has. A single-member LLC is a “disregarded entity” by default, meaning income and expenses flow onto the owner’s personal return. A multi-member LLC is treated as a partnership, filing an informational return on Form 1065 while each member reports a share on individual returns.¹¹

If those defaults do not fit, you have two main alternatives. Filing Form 8832 elects corporate taxation.¹² Filing Form 2553 elects S-corporation status, which can reduce self-employment taxes for owners who pay themselves a reasonable salary. The Form 2553 deadline is within two months and 15 days of the start of the tax year you want the election to take effect; miss it and you either wait a year or file a late election with a reasonable cause explanation.

Talk through these elections with a tax professional before you file. The wrong choice can cost more in taxes or compliance work than it saves, and changing classifications later carries its own consequences.

Plan for the Annual Franchise Tax Report

Texas has no personal income tax, but it does have a franchise tax that applies to most LLCs. This is the ongoing obligation that catches new owners most often. Every Texas LLC has to file a franchise tax report by May 15 each year, even if the company owes nothing.¹³

For 2026, LLCs with total revenue at or below $2,650,000 owe no franchise tax, but they still have to file. The report tells the Comptroller the entity is active and updates ownership and financial information. LLCs above the threshold pay 0.375% (retail and wholesale) or 0.75% (everyone else) on taxable margin.¹³

Penalties escalate quickly for late reports and late payments, with interest kicking in after the second month.¹³ Keep ignoring the filing and the Comptroller will forfeit the LLC’s right to transact business in Texas. Once that happens, the LLC cannot sue or defend itself in court, and each officer or director can be personally liable for the company’s debts.¹⁴ That is the exact personal exposure most people form an LLC to avoid.

Beneficial Ownership Reporting Does Not Currently Apply

You may have read that new LLCs have to file a Beneficial Ownership Information report with FinCEN within 30 days of formation under the Corporate Transparency Act. In March 2025, FinCEN issued an interim final rule exempting all entities formed in the United States from that requirement. Only foreign entities registered to do business in a U.S. state currently have to report.¹⁵ The rule remains subject to public comment and could change, so check FinCEN’s website before assuming the exemption still holds when you file.

Open a Business Bank Account

Once your LLC is approved and the EIN is in hand, open a dedicated business bank account. Mixing personal and business funds undermines the liability protection the LLC gives you and makes tax reporting much harder.

Most banks ask for the same core documents to open an LLC account:

The file-stamped Certificate of Formation from the Secretary of State
The EIN confirmation letter or online notice from the IRS
The operating agreement, especially if the LLC has multiple members
Government-issued ID for each member or authorized signer

Some banks also require an initial deposit, and the minimum varies. Having your formation documents organized before you start the account application keeps the process from stretching across several visits.

1
Texas Secretary of State. Certificate of Formation Limited Liability Company Form 205
2
State of Texas. Texas Business Organizations Code 5.053 – Distinguishable Names Required
3
State of Texas. Texas Business Organizations Code 5.201 – Designation and Maintenance of Registered Agent and Registered Office
4
Office of the Texas Secretary of State. Registered Agents
5
Office of the Texas Secretary of State. Form 401-A – General Information Acceptance of Appointment and Consent to Serve as Registered Agent
6
Texas Secretary of State. Form 205 – Instructions for Certificate of Formation – Limited Liability Company
7
Office of the Texas Secretary of State. Business Services
8
State of Texas. Texas Business Organizations Code 101.052
9
Internal Revenue Service. Get an Employer Identification Number
10
Internal Revenue Service. Employer Identification Number
11
Internal Revenue Service. Limited Liability Company (LLC)
12
Internal Revenue Service. About Form 8832, Entity Classification Election
13
Texas Comptroller. Franchise Tax
14
Texas Comptroller. Franchise Tax Account Status
15
FinCEN.gov. FinCEN Removes Beneficial Ownership Reporting Requirements for US Companies and US Persons