To form 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, pick a name that meets state rules, line up a registered agent with a Texas street address, and decide whether members or managers will run the company. After the state approves the filing, you draft a company agreement, get a federal EIN, open a business bank account, and put the annual franchise tax deadline on your calendar.
Pick a Compliant Name
Your name has to do two things under the Texas Business Organizations Code. It must be distinguishable from every other entity name or reserved name on file with the Secretary of State, and it must include “Limited Liability Company,” “Limited Company,” or an abbreviation such as “LLC” or “L.L.C.”1State of Texas. Texas Business Organizations Code Chapter 5 – Names of Entities You can check whether the name you want is available through the Secretary of State’s SOSDirect portal before you file.2Office of the Texas Secretary of State. Filing Options
Some words trigger extra approval. “Bank,” “trust,” or “trust company” requires a no-objection letter from the Banking Commissioner. “University,” “college,” or “school of law” needs clearance from the Texas Higher Education Coordinating Board. Names implying a link to a veterans’ organization need written approval from that organization.3Legal Information Institute. 1 Texas Administrative Code 79.34 – Restricted Words If you file with any of these restricted terms and no letter, the Secretary of State will reject the filing.
Line Up a Registered Agent
Every Texas LLC needs a registered agent and a registered office in the state. The agent receives lawsuits and official notices on the company’s behalf. The agent can be an individual who lives in Texas or a business entity authorized to operate in the state, and the agent must have consented to serve in a written or electronic form.4Secretary of State. Registered Agents
The registered office has to be a physical Texas street address where the agent can be served during business hours.4Secretary of State. Registered Agents A P.O. box or virtual mailbox does not qualify. Many owners serve as their own agent using a home or office address, which is cheap but puts that address into the public record and requires someone to be available during business hours. Commercial registered agent services handle this for an annual fee.
File Form 205 with the Secretary of State
Form 205 is the certificate of formation for a Texas LLC. Download it from the Secretary of State’s website.5Office of the Texas Secretary of State. Form 205 – Instructions for Certificate of Formation – Limited Liability Company The form asks for:
- The entity name, including the required designator.
- The registered agent’s name and the physical Texas address of the registered office.
- Whether the LLC is member-managed or manager-managed.
- The name and address of each initial manager (if manager-managed) or each initial member (if member-managed). At least one person is required.
- The organizer, who signs and submits the filing.
- A purpose statement; most filers use the default language authorizing any lawful business activity.
The management choice matters because it controls who can bind the company in contracts and legal matters. In a member-managed LLC, every owner participates in daily decisions. In a manager-managed LLC, only the designated managers make binding decisions, which fits better when you have passive investors or a larger ownership group. Whichever you pick, the certificate needs to reflect it accurately, since the state’s record becomes the public reference point.5Office of the Texas Secretary of State. Form 205 – Instructions for Certificate of Formation – Limited Liability Company
Filing Methods, Fees, and Timing
As of September 2025, the Secretary of State accepts formation filings through SOSDirect, SOSUpload, in person, by mail, or by courier. Fax is no longer accepted.6Texas Secretary of State. Business Services The filing fee is $300 regardless of method.7Texas Secretary of State. Business Filings and Trademarks Fee Schedule
Online through SOSDirect is the fastest route, and the Secretary of State’s office encourages electronic filing for quicker turnaround.2Office of the Texas Secretary of State. Filing Options If you mail the form, include a check or money order payable to the Secretary of State, and send a second copy so the office can file-stamp it and return it as your proof of filing.8Texas Secretary of State. Filing and Other General FAQs
If you need it faster, Texas offers three tiers of expedited service on top of the $300 filing fee:
- Same-day service, $750. Filings received by noon are processed by close of business that day.
- Next-day service, $500. Filings received by noon are processed by close of business the following business day.
- Standard expedited, $50. Filings are processed ahead of regular submissions, typically within two to three business days.
Same-day and next-day service are available for in-person filings. Standard expedited applies to documents received by mail or personal delivery.9Office of the Secretary of State. Introducing Texas Express Expedited Business Filings Same-day expediting brings the total to $1,050. For most filers without a hard deadline, standard online submission is the sensible choice.
Once the Secretary of State approves your filing, you receive a stamped certificate of formation and a certificate of filing. Those documents are your proof that the LLC exists and is authorized to do business in Texas.
Draft a Company Agreement
Texas calls its operating agreement a “company agreement.” You don’t file it with any government office; it’s a private contract among the members.10State of Texas. Texas Business Organizations Code 101-052 – Company Agreement It’s still the most important internal document your LLC will have, because it controls how profits are divided, how decisions are made, and what happens when a member leaves or the company winds down.
A solid agreement covers ownership percentages and voting rights, how profits and losses are allocated, who has management authority and what spending or decisions require a vote, the rules for selling or assigning a membership interest, and the steps to dissolve the company. Without an agreement, Texas defaults to allocating profits and losses based on the value of each member’s capital contributions, which often isn’t what the members actually intended.11State of Texas. Texas Business Organizations Code Chapter 101
Texas technically allows an oral company agreement, but enforcing spoken terms in court is difficult. If nothing is written down, the default provisions of the Business Organizations Code fill the gaps, and those defaults don’t account for unequal contributions of time or money, custom profit splits, or buyout terms. That is where most co-owner disputes start.
Get a Federal EIN
Once the state approves your LLC, apply to the IRS for a Federal Employer Identification Number using Form SS-4. The EIN is your business’s federal tax ID; you’ll use it for tax returns, hiring, and opening a bank account.12Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN) The application asks for the LLC’s legal name as registered with the state, a “responsible party” with a Social Security number or ITIN, the date the business started, the expected number of employees, and the primary business activity.13Internal Revenue Service. Instructions for Form SS-4 (12/2025)
Applying through the IRS website is the fastest option and issues the EIN immediately. Fax takes about four business days; mail takes roughly four weeks.13Internal Revenue Service. Instructions for Form SS-4 (12/2025) There is no fee. The EIN stays with the entity for its entire life.
Open a Business Bank Account and Keep the Shield Intact
With the certificate of formation and EIN in hand, open a dedicated account for the LLC. Most banks ask for the EIN confirmation letter, a copy of the filed certificate of formation, your company agreement (or a certification that one exists), and government-issued ID for whoever is opening the account. Some also want to see a business license if your industry requires one.
The bank account is not just paperwork. The liability shield that makes an LLC worth forming is not automatic. Texas courts can pierce the veil and hold members personally liable when the LLC is operated as an alter ego of its owners rather than a separate entity. Commingling personal and business funds, paying personal expenses from the company account, and skipping separate records are the habits that get owners into trouble. Open the business account, run all business expenses through it, pay yourself a documented salary or distribution, and keep personal spending completely separate.
Franchise Tax and Annual Filing
Texas has no personal income tax, but it does impose a franchise tax on LLCs. Every Texas LLC must file a franchise tax report and a Public Information Report with the Texas Comptroller by May 15 each year, starting the year after formation.14Texas Comptroller of Public Accounts. Franchise Tax
If your LLC’s annualized total revenue is $2.65 million or less, you owe no franchise tax for the 2026 report year.15Texas Comptroller. Texas Franchise Tax Report Forms for 2026 You still have to file the Public Information Report at zero revenue; the filing and the tax are separate obligations.16Texas Comptroller. Texas Franchise Tax Public Information Report (PIR) and Ownership Information Report (OIR) Filing Requirements
For LLCs that owe franchise tax, the rates for the 2026 and 2027 report years are 0.375% of taxable margin for retail or wholesale businesses, 0.75% for all other businesses, and 0.331% of total revenue under the simplified EZ computation available to smaller entities.17Texas Comptroller of Public Accounts. What is Franchise Tax?
Missing the deadline is expensive. The Comptroller can forfeit the LLC’s right to transact business in Texas, which strips its ability to sue or defend itself in Texas courts. Each manager or officer becomes personally liable for business debts created after the forfeiture date and before reinstatement, and that personal liability survives reinstatement. To restore the entity, you file every delinquent report and pay all back taxes, penalties, and interest.
Two Boundary Notes Before You File
Licensed Professionals File a PLLC
If you’re an attorney, physician, dentist, architect, certified public accountant, or veterinarian, Texas law requires a Professional Limited Liability Company (PLLC) rather than a standard LLC. The same generally applies to any profession that requires a state license to practice. You still file with the Secretary of State and still pay $300, but the certificate of formation identifies the professional service being provided, and the name typically ends in “PLLC.”
Federal Beneficial Ownership Reporting Does Not Apply
As of March 2025, all entities formed in the United States are exempt from federal beneficial ownership information (BOI) reporting. An interim final rule revised the definition of “reporting company” to cover only entities formed under foreign law that have registered to do business in a U.S. state.18Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting A domestically formed Texas LLC does not need to file a BOI report as of 2026. FinCEN could issue a new rule, so keep an eye on it, but there is no current federal BOI filing obligation for your new LLC.