To set up an LLC in Texas by yourself, you file one document — the Certificate of Formation (Form 205) — with the Texas Secretary of State and pay a $300 filing fee.1Texas Secretary of State. Certificate of Formation – Limited Liability Company (Form 205) The filing is done online, and with expedited handling the state can approve it in as little as one business day. What takes longer is the short list of follow-ups that turn a state-recognized entity into a functioning business: a federal tax ID, an internal company agreement, a business bank account, and an understanding of the annual franchise tax report that applies to every Texas LLC.
Pick a Name That Will Clear the State’s Check
Your name has to do two things. It must be distinguishable from every other active entity on file with the Secretary of State, and it must include the words “limited liability company” or “limited company,” or an abbreviation like “LLC” or “L.L.C.”2State of Texas. Texas Business Organizations Code 5.056 – Name of Limited Liability Company
Check availability for free through the Secretary of State’s SOSDirect search tool before you file anything.3Office of the Secretary of State. SOSDirect – An Online Business Service Picking a name too close to an existing entity is one of the most common reasons filings get rejected. If the name you want is taken, you can adjust the wording enough to make it distinguishable, or reserve a name for 120 days with a separate $40 application.
Choose a Registered Agent
Every Texas LLC needs a registered agent, meaning a person or company that agrees to accept legal documents and official government mail on the LLC’s behalf during normal business hours. The agent must be a Texas resident or an organization authorized to do business in the state, and must maintain a physical street address in Texas — not a P.O. box — where documents can be delivered in person.4Texas Secretary of State. Registered Agents
You can serve as your own registered agent if you have a qualifying Texas address, which saves money. The trade-off is that your home address becomes part of the public record and you need to be reliably available during business hours. Commercial registered agent services typically charge $100 to $300 per year and keep your personal address off the filing.
File the Certificate of Formation
The Certificate of Formation is the document that actually creates your LLC. Texas uses Form 205, and the Secretary of State posts both the form and instructions on its website.5Texas Secretary of State. Form 205 Instructions for Certificate of Formation – Limited Liability Company
What the Form Asks For
Under the Business Organizations Code, the Certificate of Formation must include the LLC’s name, the registered agent’s name and address, and the governing authority structure.6State of Texas. Texas Business Organizations Code 3.005 – Certificate of Formation The form also asks for the organizer’s name and address. The organizer is the person submitting the filing and does not have to be a future member of the LLC.
You’ll pick one of two management structures. In a member-managed LLC, the owners run day-to-day operations. In a manager-managed LLC, one or more appointed managers handle those responsibilities instead, which is useful when some owners are passive investors. Either way, the form requires the names and addresses of whoever holds initial management authority.
The purpose section defaults to a general-purpose clause that lets you conduct any lawful business, and most filers leave it at that.5Texas Secretary of State. Form 205 Instructions for Certificate of Formation – Limited Liability Company There’s rarely a reason to restrict it unless you’re in a regulated industry that requires specific language.
How to Submit, and What It Costs
File through the Secretary of State’s SOSDirect portal or the SOSUpload system.7Office of the Texas Secretary of State. Let’s Do Business The state filing fee is $300.1Texas Secretary of State. Certificate of Formation – Limited Liability Company (Form 205) You can pay by credit card or from a pre-funded client account within SOSDirect. Credit card payments carry a 2.7% convenience fee, adding about $8 to the total.8Texas Secretary of State. Form 503 Instructions – Assumed Name Certificate
Three expedited tiers are available on top of the $300 fee: standard expedited (two to three business days) for $50, next-day for $500, and same-day for $750.9Texas Secretary of State. Texas Express Expedited Business Filings Non-expedited processing times fluctuate with the office’s workload. Once approved, you’ll receive a file-stamped copy of the Certificate of Formation. That’s your official proof the LLC exists.
Get a Federal EIN
After the state approves your formation, apply for an Employer Identification Number from the IRS. This is a nine-digit number the federal government uses to identify your business for tax purposes, and nearly every bank requires it before opening a business account. The application is free at irs.gov, and you receive the number immediately upon approval.10Internal Revenue Service. Get an Employer Identification Number
Two practical notes. The IRS online application times out after 15 minutes of inactivity with no way to save your progress, so have your Certificate of Formation file number, the LLC’s legal name, and the responsible party’s Social Security number ready before you start. And form your entity with the state first — the IRS specifically warns that applying before your state filing is complete can delay your EIN.10Internal Revenue Service. Get an Employer Identification Number
Write a Company Agreement
Texas calls the LLC’s internal governance document a “company agreement” rather than the more common “operating agreement.” The Business Organizations Code defines it as any written, oral, or implied agreement among members concerning the LLC’s affairs,11State of Texas. Texas Business Organizations Code Chapter 101 and it governs the relationships among members, managers, and officers along with the LLC’s other internal affairs.12State of Texas. Texas Business Organizations Code 101.052 – Company Agreement
You don’t file this document with the state, but skipping it is a mistake, especially for multi-member LLCs. Without a written agreement, the default rules in the Business Organizations Code fill every gap, and those defaults often don’t match what the owners actually intended. A useful company agreement covers ownership percentages, how profits and losses get allocated, the process for adding or removing members, voting rights, and what happens if a member wants to leave or the company needs to dissolve.
Even single-member LLCs benefit from a written company agreement. It reinforces the separation between you and the business entity, which matters if your liability protection is ever challenged in court.
Open a Business Bank Account
Mixing personal and business funds is one of the fastest ways to undermine your LLC’s liability protection. Open a dedicated business bank account as soon as you have your EIN. Banks typically ask for your EIN confirmation, the filed Certificate of Formation, your company agreement, and a valid photo ID for the account signer.13U.S. Small Business Administration. Open a Business Bank Account Some banks also require a business license, so check with your institution beforehand.
Know How the IRS Will Tax Your LLC
An LLC doesn’t have its own default tax category at the federal level. The IRS classifies it based on how many members it has. A single-member LLC is treated as a “disregarded entity,” meaning all income and expenses flow through to your personal tax return. A multi-member LLC is treated as a partnership, with each member reporting their share on their own return.14Internal Revenue Service. Limited Liability Company (LLC)
If neither default fits, you can file IRS Form 8832 to elect corporate tax treatment.15Internal Revenue Service. About Form 8832, Entity Classification Election Some owners also elect S corporation status using Form 2553 once their income reaches a level where the self-employment tax savings justify the added payroll requirements. Elections don’t change your state-level entity — you’re still an LLC under Texas law — only how the IRS taxes your income. Talk to a tax professional before making one, because changing classifications later has consequences.
Plan for the Franchise Tax and Public Information Report
This is the obligation most new LLC owners don’t see coming. Texas has no personal income tax, but it does impose a franchise tax on every LLC formed or doing business in the state.16Texas Comptroller of Public Accounts. Franchise Tax
For the 2026 report year, if your LLC’s annualized total revenue is $2,650,000 or less, you owe no tax.17Texas Comptroller of Public Accounts. 2026 Franchise Tax Instructions (Form 05-915) Most small LLCs fall below that threshold. You still have to file, though. Failing to file can lead to penalties and eventually forfeiture of your LLC’s right to do business in the state.
LLCs above the no-tax-due threshold pay either 0.375% for retail and wholesale businesses or 0.75% for all others, with a simplified EZ computation rate of 0.331% available to qualifying entities.16Texas Comptroller of Public Accounts. Franchise Tax The franchise tax report is due May 15 each year.18Texas Comptroller of Public Accounts. Franchise Tax Overview
Alongside the franchise tax report, your LLC must file a Public Information Report annually with the Texas Comptroller. It discloses officers, directors, managers, and members, along with their addresses and ownership percentages, and is due on the same May 15 deadline.19Texas Comptroller of Public Accounts. Texas Franchise Tax Public Information Report (PIR) and Ownership Information Report (OIR) Filing Requirements
Federal Beneficial Ownership Reporting No Longer Applies
If you’ve seen older guides mentioning a federal requirement to report your LLC’s beneficial owners to the Financial Crimes Enforcement Network, that rule has changed. In March 2025, FinCEN published an interim final rule exempting all U.S.-formed entities from beneficial ownership information reporting under the Corporate Transparency Act. Only entities formed under foreign law and registered to do business in the U.S. are still required to report.20FinCEN.gov. Beneficial Ownership Information Reporting As a Texas LLC, you have no federal BOI filing obligation.
Total Costs to Budget For
The $300 state filing fee is the only unavoidable cost, but it helps to see the full picture before you start.
- Certificate of Formation: $300 to the Secretary of State, plus a 2.7% credit card convenience fee if you pay by card.
- Expedited processing (optional): $50 for two-to-three-day handling, $500 for next-day, or $750 for same-day, each on top of the $300 filing fee.
- Name reservation (optional): $40 to hold a name for 120 days.
- EIN application: Free at irs.gov. Ignore any third-party site that charges for this.
- Commercial registered agent (optional): $100 to $300 per year if you don’t serve as your own agent.
- Franchise tax report: No tax due if revenue is at or below $2,650,000, but you still must file annually by May 15.
Local business license or permit fees vary by city and county, and not every business needs one, so check with your municipality. If you plan to operate in states beyond Texas, each additional state charges its own registration fee to authorize your LLC to do business there.