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

To create an LLC in Texas, file a Certificate of Formation (Form 205) with the Secretary of State and pay a $300 filing fee.¹ Before you file, you’ll need a compliant name and a registered agent; after you file, you’ll want a company agreement, an EIN, and any state tax registrations your business requires. Each step is described below in the order you should tackle it.

Pick a Name That Meets Texas Rules

Your LLC’s name has to do two things at once. It must be distinguishable from every other entity name already on file with the Secretary of State, and it must include the phrase “limited liability company” or “limited company,” or an abbreviation such as LLC, L.L.C., or LC.² A name that’s too close to one already registered will get your filing rejected.

You can check availability by calling the Secretary of State at (512) 463-5555 or searching SOSDirect. A preliminary clearance isn’t final, though. The real determination is made when your documents are processed.³

Not ready to file yet? You can reserve a name for 120 days by filing Form 501 with a $40 fee, and you can renew for another $40 in the 30 days before the reservation expires.⁴ That’s worth doing if you’re still lining up funding, drafting a company agreement, or securing a matching domain.

Appoint a Registered Agent

Every Texas LLC has to designate a registered agent — the person or entity authorized to receive legal papers on the company’s behalf. The agent must be a Texas resident or a business entity registered to operate in the state, and the LLC cannot serve as its own agent.⁵

The registered office has to be a physical street address where someone can hand-deliver documents during normal business hours. A mailbox service or answering service does not qualify.⁵ This is where lawsuits and government notices will show up, so reliability matters. If service happens and nobody’s there to receive it, you could lose a case by default.

The agent has to consent to the role. The Secretary of State publishes Form 401-A for this, but the signed consent stays in your own records rather than being filed with the state.⁶ Owners often name themselves or a partner. Commercial registered agent services are also common, generally running $100 to $300 per year for a consistent street address with someone available during business hours.

File the Certificate of Formation

Form 205 is the document that actually creates the LLC. Its required contents come from Chapter 3 of the Texas Business Organizations Code.⁷ You’ll need to provide:

The full legal name of the LLC, including the required designator.
The registered agent’s name and the street address of the registered office.
The management structure. In a member-managed LLC, the owners run the business directly. In a manager-managed LLC, designated managers handle operations while other members stay passive.
The name and address of each initial member (if member-managed) or each initial manager (if manager-managed).⁸
The organizer’s name and signature. The organizer doesn’t have to be a member and can be an attorney.
The purpose, usually stated broadly as “any lawful purpose.”
The duration, which is perpetual unless you specify an end date.

Form 205 also lets you pick a future effective date up to 90 days after the organizer signs.⁹ That’s useful if you want the LLC’s start date to line up with a quarter, a lease, or a planned launch.

You can submit Form 205 electronically through SOSDirect, upload a signed PDF through SOSUpload, or mail two copies to the Secretary of State in Austin.¹⁰ The filing fee is $300 regardless of method, payable by credit card, check, or money order. Once approved, the Secretary of State returns a file-stamped copy along with evidence of filing.¹ Hang onto that certificate. Banks want to see it when you open a business account, and landlords and licensing agencies often ask for it too.

Expedited Options

If standard processing is too slow, Texas offers three expedited tiers on top of the $300 filing fee:¹¹

Same-day service for $750. Documents received in person by noon are processed by close of business.
Next-day service for $500. Documents received in person by noon are processed by close of business the next business day.
Standard expedited for $50. Processed ahead of regular submissions, typically within two to three business days. Mail or in person.

Expedited review moves your filing to the front of the line. It doesn’t guarantee approval, since documents still go through the same legal review.

Draft a Company Agreement

Texas calls this document a “company agreement” rather than the “operating agreement” label used elsewhere. It’s the contract among members covering voting rights, profit-sharing, decision-making, and what happens when a member leaves or dies.¹²

You don’t file this document with the state. It stays in your own records.¹² Skipping it is one of the more common mistakes new owners make. Without one, Texas default rules fill the gaps, and those defaults may not match what you and your co-owners intended. Even for a single-member LLC, a written agreement documents the separation between you and the business, which helps if anyone later argues the LLC is just your alter ego.

Texas gives these agreements unusual flexibility. The agreement can expand, restrict, or even eliminate certain fiduciary duties that members and managers owe each other,¹³ which means you can tailor it closely to your business relationship.

Apply for an EIN

An Employer Identification Number is the tax ID for your business, and the IRS requires one for every LLC.¹⁴ You’ll also need it to open a bank account, hire employees, and file tax returns. Applying is free and takes only a few minutes on the IRS website.¹⁵

One sequencing detail matters: the IRS expects the LLC to be formed with the state before you apply.¹⁵ Wait until your Certificate of Formation comes back approved before starting the EIN application. The online session can’t be saved and expires after 15 minutes of inactivity, so have your LLC details ready before you begin.

Register for Texas Taxes

Texas doesn’t tax individual income, but it does levy a franchise tax on most business entities, including LLCs. For the 2026 report year, an LLC with annualized total revenue of $2,650,000 or less owes no franchise tax.¹⁶ Even if you owe nothing, you still have to file a Public Information Report each year listing the names and addresses of your officers, directors, or managers.¹⁷

Franchise tax reports are due May 15 each year, with the deadline moving to the next business day if May 15 falls on a weekend or holiday.¹⁸ The Public Information Report goes to the Comptroller, not the Secretary of State. Texas does not require LLCs to file a separate annual report with the Secretary of State.¹⁹

If your LLC sells, leases, or rents taxable goods, or provides taxable services in Texas, you need a sales tax permit from the Comptroller before you start collecting sales tax.²⁰ Apply online through the Comptroller’s eSystems portal,²¹ and allow two to three weeks for the permit to arrive. A purely service-based LLC whose services aren’t taxable in Texas can skip this.

One boundary worth noting: as of March 2025, FinCEN’s interim final rule exempted all domestically formed entities from the federal Beneficial Ownership Information reporting requirement, and FinCEN is not enforcing penalties against domestic companies or their owners.²² LLCs formed in the United States no longer need to file a BOI report.

Keep the LLC in Good Standing

Once your LLC exists, staying compliant comes down to a few recurring obligations. The biggest one is the May 15 franchise tax filing with the Comptroller, including the Public Information Report — even if the LLC owes zero.¹⁷ Missing this filing is the most common way Texas LLCs get into trouble with the state.

If your LLC fails to file the franchise tax report or pay taxes owed, the Secretary of State will forfeit the entity. A forfeited LLC can’t file lawsuits in Texas courts or amend its formation documents, though it can still defend itself in existing litigation.²³ Left unresolved, the state can involuntarily terminate the LLC entirely.

You can reinstate at any time by filing all overdue franchise tax reports, paying any taxes, penalties, and interest owed, and submitting Form 801 with a tax clearance letter from the Comptroller.²³ If the LLC was involuntarily terminated, it’s treated as having existed without interruption only when you reinstate within three years of the termination date. After that, reinstatement is still available, but the continuity argument gets harder.

Also keep your registered agent information current. If your agent moves or resigns and the state’s records aren’t updated, legal notices can go undelivered. And maintain your internal records: Texas law requires every LLC to keep its certificate of formation, company agreement, and tax returns available for members to inspect at the principal office.¹²

1
Office of the Texas Secretary of State. Form 205 – Instructions for Certificate of Formation – Limited Liability Company
2
State of Texas. Texas Business Organizations Code Section 5.056 – Name of Limited Liability Company or Foreign Limited Liability Company
3
Texas Secretary of State. Name Filings FAQs
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 – Names of Entities; Registered Agents and Registered Offices
6
Office of the Texas Secretary of State. Form 401-A – General Information Acceptance of Appointment and Consent to Serve as Registered Agent
7
State of Texas. Texas Business Organizations Code Chapter 3
8
State of Texas. Texas Business Organizations Code Chapter 3 – Section 3.010
9
Texas Secretary of State. Form 205 – Instructions for Certificate of Formation – Limited Liability Company
10
Office of the Texas Secretary of State. Filing Options
11
Office of the Texas Secretary of State. Introducing Texas Express Expedited Business Filings
12
State of Texas. Texas Business Organizations Code Chapter 101 – Limited Liability Companies
13
State of Texas. Texas Business Organizations Code Chapter 101 – Limited Liability Companies – Section 101.401
14
Internal Revenue Service. Employer Identification Number
15
Internal Revenue Service. Get an Employer Identification Number
16
Texas Comptroller of Public Accounts. 2026 Franchise Tax Instructions
17
Comptroller of Public Accounts. Texas Franchise Tax Public Information Report and Ownership Information Report
18
Texas Comptroller of Public Accounts. Franchise Tax Overview
19
Texas Secretary of State. Formation of Texas Entities FAQs
20
Texas Comptroller of Public Accounts. Sales Tax Permit Requirements
21
Texas Comptroller of Public Accounts. Texas Online Tax Registration Application
22
Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting
23
Texas Secretary of State. Terminations and Reinstatements FAQs