How to Create an LLC in Texas: Formation, EIN, and Franchise Tax

To create an LLC in Texas, you file a Certificate of Formation (Form 205) with the Texas Secretary of State and pay a $300 filing fee. Before you file, you need to pick a compliant name, appoint a registered agent with a Texas street address, and decide whether the company will be run by its members or by designated managers. After the state approves your filing, a short list of federal and state tasks — an EIN, a company agreement, tax registration, and annual reporting — keeps the LLC in good standing.

Pick a Compliant Name

Your LLC’s name has to be distinguishable from every other business entity already on file with the Secretary of State. The office compares your proposed name against existing entities, registered foreign entities, reserved names, and registered names before accepting the filing.¹ Search the SOSDirect portal or the Taxable Entity Search on the Comptroller’s site to check availability before you commit.

The name also has to end with a designator that signals the entity type. Acceptable choices are “Limited Liability Company,” “Limited Company,” or the abbreviations “LLC,” “L.L.C.,” “LC,” or “L.C.”¹ A missing designator or a typo will get the whole filing rejected, so proofread the exact spelling and punctuation.

If you want to operate under a different name, you can file an assumed name certificate (a “DBA”) with the Secretary of State for a $25 fee. The certificate lasts up to ten years, does not need a designator like “LLC,” and is not checked for conflicts with other assumed names on file. If any information on it becomes materially misleading, you have 60 days to file a corrected one.²

Appoint a Registered Agent

Every Texas LLC must continuously maintain a registered agent and a registered office in Texas. The agent accepts lawsuits and official notices on the company’s behalf and can be either an individual who lives in Texas or a business entity authorized to operate in the state.³

The registered office has to be a physical street address in Texas where the agent is reachable during normal business hours. A P.O. box or virtual mailbox alone will not satisfy the requirement. Before the LLC is formed, the agent must give written or electronic consent to serve. You do not file that consent with the state, but keep it in your own records.⁴

If the LLC ever stops maintaining an agent, the Secretary of State can start an involuntary termination process and eventually shut the company down.⁵

Decide How the LLC Will Be Managed

Texas LLCs run one of two ways. In a member-managed LLC, every owner can make decisions and sign contracts for the company. In a manager-managed LLC, that authority sits with one or more designated managers, who may or may not be owners.⁶

Texas treats the LLC as member-managed by default unless the certificate of formation or company agreement says otherwise. The choice matters because it determines whose names and addresses go on the formation document: members for a member-managed LLC, managers for a manager-managed one. Sort this out before you file.

File the Certificate of Formation

Form 205 is what actually creates the LLC. You can download it from the Secretary of State’s website or complete it inside SOSDirect. The form asks for:

The LLC’s full legal name with the required designator.
The registered agent’s name and a Texas street address (a P.O. box is only acceptable alongside a physical address).
Whether the LLC is member-managed or manager-managed.
The names and addresses of each initial member (member-managed) or manager (manager-managed). This becomes public record.
A purpose statement. Texas lets you say the LLC is formed for “any lawful purpose,” which keeps future options open.⁷
The organizer’s name and signature. The organizer does not have to be an owner.
The effective date, which can be immediate or set for a future date up to 90 days after signing.⁸

Submit the form online through SOSDirect or mail a paper copy to P.O. Box 13697, Austin, TX 78711.⁹ The filing fee is $300, payable by credit card or pre-funded account online, or by check or money order by mail. The fee is non-refundable, and the state will not process the document without it.¹⁰ Expedited processing is available for an extra fee and typically finishes within two to three business days.¹¹ Online filings generally clear faster than mailed ones.

When the filing is approved, you get back a file-stamped copy of the Certificate of Formation and a certificate of acknowledgment. Those are the official proof the LLC exists.

Get an EIN and Open a Business Bank Account

Once the LLC is formed, apply for an Employer Identification Number from the IRS. The EIN is a nine-digit federal tax ID you need to open a business bank account, hire employees, and file certain tax returns.¹² Apply online at irs.gov for immediate issuance. There is no fee.

With the EIN and the file-stamped Certificate of Formation, you can open a business account. Most banks also want your company agreement and identification for the signers.¹³ Keeping business and personal finances in separate accounts is one of the most straightforward ways to preserve the liability protection the LLC gives you.

Write a Company Agreement

What most states call an “operating agreement,” Texas calls a “company agreement.” It sets out ownership percentages, profit distributions, voting rights, and what happens when a member leaves or transfers their interest.¹⁴

You do not file the company agreement with the state, but it is a binding contract among the members. Single-member LLCs benefit from one too, because it documents how the business operates and helps show the LLC is a genuine separate entity. Without a written agreement, Texas default rules fill in the gaps, and the defaults may not match what you want.

Handle Federal Tax Classification

The IRS does not treat an LLC as its own tax type. It applies a default classification based on ownership:

A single-member LLC is treated as a “disregarded entity,” and the owner reports business income on their personal return.
A multi-member LLC is treated as a partnership, files Form 1065, and issues Schedule K-1s to each member.

These defaults apply automatically. Nothing needs to be filed to get them.¹⁵

If a different structure fits better, there are two elections available. To be taxed as a C corporation, file Form 8832; the election can take effect no earlier than 75 days before filing and no later than 12 months after.¹⁶ To be taxed as an S corporation, file Form 2553 no later than two months and 15 days after the start of the tax year the election should apply to; the LLC must have no more than 100 shareholders and meet the other IRS eligibility rules.¹⁷

The election affects self-employment and income taxes in real dollars, and switching later means more filings and possible tax consequences, so many owners talk to a tax professional before choosing.

Register for the Texas Franchise Tax and File Annual Reports

Texas has no personal income tax, but it does levy a franchise tax on most business entities, LLCs included. Every LLC organized in Texas or doing business in Texas must file a franchise tax report and a Public Information Report with the Texas Comptroller by May 15 each year.¹⁸

For a newly formed LLC, the first report is due on May 15 of the year after formation. It covers the partial period from the LLC’s creation date through the end of its federal accounting year, and total revenue is annualized to determine whether tax is owed.

For the 2026 and 2027 report years, an LLC with annualized total revenue of $2,650,000 or less owes no franchise tax.¹⁹ Even under the threshold, the Public Information Report still has to be filed. That report updates the state on the LLC’s current managers or members and their addresses. Missing these filings can bring penalties and eventually the loss of the LLC’s right to do business in Texas.¹⁸

Check Local Permits and Professional Licensing

Texas does not require a general business license at the state level. The Certificate of Formation itself does the job that a general business license does in some other states.²⁰ Your city or county may still require local permits depending on the industry and location, so check with local government offices where you plan to operate.

If the LLC will provide professional services such as medicine, law, architecture, or accounting, you may need to form a professional limited liability company (PLLC) instead of a standard LLC. PLLCs have additional formation requirements and are overseen by the licensing board for the profession involved.

Keep the Required Records

Texas law requires the LLC to keep certain records at its principal office in the United States, or make them available there within five days of a member’s written request:

A current list of members and their ownership percentages, showing class membership if there is more than one class.
Copies of federal, state, and local tax returns for the past six years.
The certificate of formation and any amendments.
A copy of the written company agreement and any amendments, if one exists.
A written statement of each member’s contributions, any future contribution obligations, and the date each person became a member.
Copies of any executed powers of attorney.

The street address of the principal office also has to be on file at the LLC’s Texas registered office so members can locate the records.²¹ Beyond satisfying the statute, complete records reinforce the corporate formality that keeps the liability shield intact.

Beneficial Ownership Reporting Does Not Currently Apply

The federal Corporate Transparency Act originally required most LLCs to file a Beneficial Ownership Information report with FinCEN. An interim final rule published in March 2025 exempted all domestic entities, including Texas LLCs, from that requirement. Under the revised rule, only entities formed under foreign law and registered to do business in a U.S. state have to report.²² FinCEN has said it intends to issue a final rule, so the position may change, but for now a newly formed Texas LLC does not need to file a BOI report.²³

1
State of Texas. Business Organizations Code Chapter 5 – Names of Entities; Registered Agents and Registered Offices
2
Texas Secretary of State. Name Filings FAQs
3
State of Texas. Texas Business Organizations Code Section 5-201
4
Cornell Law School. 1 Texas Admin Code 79.29 – Consent to Serve as Registered Agent
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State of Texas. Business Organizations Code Chapter 11 – Winding Up and Termination of Domestic Entity
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State of Texas. Texas Business Organizations Code Section 101-251 – Governing Authority
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State of Texas. Texas Business Organizations Code Section 2-001 – General Scope of Permissible Purposes
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Office of the Texas Secretary of State. Form 205 – Certificate of Formation – Limited Liability Company
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Office of the Texas Secretary of State. Filing Options
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Texas Secretary of State. Instructions for Form 205 – Certificate of Formation
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Office of the Texas Secretary of State. Introducing Texas Express Expedited Business Filings
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Internal Revenue Service. Get an Employer Identification Number
13
U.S. Small Business Administration. Open a Business Bank Account
14
State of Texas. Business Organizations Code Chapter 101 – Limited Liability Companies
15
Internal Revenue Service. LLC Filing as a Corporation or Partnership
16
Internal Revenue Service. Form 8832 – Entity Classification Election
17
Internal Revenue Service. Instructions for Form 2553
18
Texas Comptroller of Public Accounts. Texas Franchise Tax Public Information Report and Ownership Information Report
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Texas Comptroller of Public Accounts. Franchise Tax
20
Texas Economic Development & Tourism Office. Business Permit Office
21
State of Texas. Texas Business Organizations Code Section 101-501 – Supplemental Records Required for Limited Liability Companies
22
FinCEN.gov. Beneficial Ownership Information Reporting
23
Federal Register. Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension