How to Apply for an LLC in Texas: Formation, Filing, and Taxes

To apply for an LLC in Texas, file a Certificate of Formation (Form 205) with the Texas Secretary of State and pay a $300 filing fee. The filing itself is quick. What trips people up is what comes after: getting a federal tax ID, choosing how the LLC will be taxed, registering with the Texas Comptroller, and putting a real operating agreement in place. Work through the steps below in order and you’ll have a functioning LLC without the common backtracking.

Pick a Name and Confirm It’s Available

Your LLC name has to include “limited liability company,” “limited company,” or an abbreviation like “LLC” or “L.L.C.”¹ It also has to be distinguishable from every other entity on file with the Secretary of State, including foreign entities registered in Texas and names already reserved by someone else.²

Check availability for free through the SOSDirect portal on the Secretary of State’s website.³ If you want to lock in a name before you file, submit Form 501 with a $40 fee to reserve it for 120 days.⁴ The reservation renews for another $40 if you file within the last 30 days before it expires.

Planning to operate under a different name than your legal LLC name? File an Assumed Name Certificate (Form 503) with the Secretary of State for $25. That’s the Texas version of a “doing business as” registration.

Appoint a Registered Agent

Every Texas LLC must designate a registered agent to accept legal documents on the company’s behalf. The registered office has to be a physical street address in Texas where someone can be personally served. A P.O. box or answering service alone doesn’t cut it.⁵

You can serve as your own agent if you have a Texas street address, or you can hire a commercial service. Professional agents typically charge $100 to $300 a year. The practical benefit is that someone is reliably at the address during business hours, even if you move or travel. Whatever you decide, the agent’s name and address go into the Certificate of Formation and become public record.

Complete the Certificate of Formation (Form 205)

Form 205 is the document that legally creates your LLC. The Texas Business Organizations Code sets out what it must contain, and the Secretary of State provides the form for download or online completion.⁶ The Secretary of State rejects filings with errors or missing information, so accuracy on the first pass saves days.

Each section calls for specific information:

Entity name, exactly as it appeared in your availability search, including the “LLC” designation.
Registered agent name and Texas street address of the registered office.
Governing authority: whether the LLC is member-managed or manager-managed. If manager-managed, you list the initial managers; if member-managed, you list the members. Either way, those names become public record.⁷
Purpose. Most filers use the general-purpose language the statute allows (“any lawful purpose”) rather than boxing themselves in.⁶
Organizer’s name and address. The organizer doesn’t have to be a member or manager.
Effective date. Most people use the filing date, but you can pick a future date up to 90 days out.

The management choice deserves real thought. In a member-managed LLC, every owner has authority to act for the business. In a manager-managed LLC, only the designated managers do, which works better when you have passive investors or want to separate ownership from daily operations.⁷

File the Form and Pay the Fee

The base filing fee is $300. You can file online through SOSDirect or by mail. The Secretary of State encourages electronic filing for faster processing.³

Online Through SOSDirect

Create a SOSDirect client account, deposit funds, and submit the filing.⁸ Credit card payments carry a 2.7% convenience fee, adding about $8 to the $300.

By Mail

Mail Form 205 with a check or money order for $300 payable to the Secretary of State.⁹ Include an extra copy if you want a file-stamped version returned. Mail filings take longer to process than electronic ones.

Expedited Options

As of October 2025, the Secretary of State offers three expedited tiers under the Texas Express program, each on top of the $300 filing fee:¹⁰

Standard expedited, $50: processed ahead of regular filings, typically within two to three business days.
Next-day, $500: filings received by noon are processed by the close of the next business day.
Same-day, $750: filings received by noon are processed by the close of business that day.

These are review-time promises, not approval guarantees. Each document still has to meet statutory requirements. For most new LLCs, the $50 tier is the practical choice unless a closing depends on it.

Get a Federal EIN

Once the Secretary of State approves the filing, apply for an Employer Identification Number from the IRS. You’ll need it to open a business bank account, hire employees, and file federal taxes.¹¹ The IRS recommends forming the entity with the state first, since applying without a state filing on record can slow things down.

The online application is fastest and issues the EIN immediately. There’s no fee. With the EIN in hand, you can open a business bank account. Most banks will ask for the EIN, the Certificate of Formation, and the operating agreement.

Choose How the LLC Will Be Taxed Federally

The IRS taxes LLCs differently depending on how many members they have. A single-member LLC is a “disregarded entity” by default, with business income flowing to your personal tax return. A multi-member LLC is taxed as a partnership by default, with each member reporting their share.¹²

If neither default fits, you can elect to be taxed as a C corporation or S corporation by filing Form 8832 with the IRS.¹² An S corporation election can reduce self-employment taxes for LLCs with substantial profits, but it adds compliance work. Talking to a tax professional before you elect usually pays for itself.

Write an Operating Agreement

Texas doesn’t require a written operating agreement, and the law recognizes oral or implied agreements among members.⁷ Relying on a handshake is still one of the more expensive mistakes new owners make. Without a written agreement, disputes about money, authority, and exits fall back on default statutory rules that may not reflect what the members actually intended.

A workable agreement covers the areas most likely to cause a fight:

Capital contributions: how much each member puts in, and what happens if someone falls short.
Profit and loss allocation: whether distributions track ownership percentages or something else.
Management authority: who can sign contracts, open accounts, and make day-to-day calls.
Transfer restrictions: what happens if a member wants to sell or leave.
Dissolution: how the LLC winds down if the members decide to close it.

The operating agreement governs the internal affairs of the LLC and the relationships among members, managers, and officers.⁷ You can include almost any provision for managing the company as long as it doesn’t violate the law. Even single-member LLCs benefit from having one, because banks and potential partners will ask to see it.

Register With the Texas Comptroller

Franchise Tax

Every Texas LLC must file a franchise tax report and a Public Information Report with the Texas Comptroller of Public Accounts by May 15 each year.¹³ For report years 2026 and 2027, LLCs with total revenue below $2,650,000 owe no franchise tax but still have to file the report.¹⁴

The filing requirement applies even if the LLC earned nothing. Missing the deadline triggers a $50 penalty when no tax is due.¹³ Repeated noncompliance can lead the Comptroller to forfeit your LLC’s right to transact business in Texas, which takes real time and money to unwind.

Sales Tax Permit

If your LLC sells, leases, or rents taxable goods or provides taxable services in Texas, get a sales tax permit from the Comptroller before you start collecting.¹⁵ You also need one if you buy taxable goods or services from out-of-state suppliers that don’t hold a Texas permit. The application is free and available on the Comptroller’s website.

Check Industry and Local Permits

Texas has no single statewide business license, but many industries require specific state-agency permits. The Governor’s office publishes a Texas Business Licenses and Permits Guide that lists which agency handles what.¹⁶ Restaurants, contractors, childcare providers, healthcare professionals, and many others each have their own licensing rules.

Cities and counties often add local business permits, zoning clearances, or health inspections. Contact your municipal government or county clerk to find out what applies to your address and industry. Getting this wrong can bring fines or forced closure, so it’s worth clearing before you open, not after.

Stay in Good Standing

After formation, the main recurring obligation is the annual franchise tax report and Public Information Report by May 15.¹³ Keep the registered agent information current too. If the agent’s address changes or you switch agents, file the update with the Secretary of State promptly. Legal documents served at an outdated registered agent address can still count as valid service, meaning you could miss a lawsuit without knowing it existed.

One item you can cross off: as of March 2025, FinCEN exempted all U.S.-formed entities from the Beneficial Ownership Information reporting requirement under the Corporate Transparency Act.¹⁷ Texas LLCs do not need to file a BOI report.

1
State of Texas. Texas Business Organizations Code Chapter 5 – Names of Entities
2
State of Texas. Texas Business Organizations Code Section 5.053 – Distinguishable Names Required
3
Office of the Texas Secretary of State. Filing Options
4
Office of the Texas Secretary of State. Form 501 – Instructions for Application for Reservation or Renewal of Reservation of an Entity Name
5
State of Texas. Texas Business Organizations Code Chapter 5 – Section 5.201
6
State of Texas. Texas Business Organizations Code – Chapter 3 Formation and Governance
7
State of Texas. Texas Business Organizations Code – Chapter 101
8
Office of the Texas Secretary of State. SOSDirect – Online Searching and Filing
9
Office of the Texas Secretary of State. Filing and Other General FAQs
10
Office of the Texas Secretary of State. Introducing Texas Express Expedited Business Filings
11
Internal Revenue Service. Get an Employer Identification Number
12
Internal Revenue Service. Limited Liability Company (LLC)
13
Texas Comptroller of Public Accounts. Franchise Tax Overview
14
Texas Comptroller of Public Accounts. Franchise Tax Rates, Thresholds and Deduction Limits
15
Texas Comptroller of Public Accounts. Sales Tax Permit Requirements
16
Texas.gov. Texas Business Licenses and Permits Guide
17
FinCEN.gov. Beneficial Ownership Information Reporting