To get an LLC in Texas, file a Certificate of Formation (Form 205) with the Secretary of State and pay the $300 filing fee. Once the certificate is stamped, you have a legal entity — but you still need a federal EIN, a state taxpayer number, an internal company agreement, and, in most cases, a sales tax permit before you can actually operate. Here is what each step requires and what it costs.
Pick a Name That Clears the State’s Rules
Your LLC’s name has to be distinguishable from every other entity already on file with the Secretary of State. That rules out anything identical or confusingly similar to an existing Texas business, a reserved name, or a registered foreign entity name. You can check availability through the SOSDirect search tool before committing.1State of Texas. Texas Code Business Organizations Code 5.053 – Distinguishable Names Required
The name must include “Limited Liability Company,” “Limited Company,” or an abbreviation like “LLC” or “L.L.C.” Certain words come with extra hoops. You cannot use “bank,” “bank and trust,” “trust,” or “trust company” without a no-objection letter from the Texas Banking Commissioner.2Legal Information Institute. 1 Texas Administrative Code 79.34 – Restricted Words
Planning to operate under a different name? File an assumed name certificate (a DBA) with the Secretary of State. The fee is $25 and the certificate stays effective for up to ten years.3Office of the Texas Secretary of State. Form 503 – Instructions for Assumed Name Certificate
Line Up a Registered Agent
Every Texas LLC must maintain a registered agent and a registered office in the state. The agent can be an individual who lives in Texas or a business entity authorized to operate here. The office has to be a physical street address where someone can accept legal documents during business hours. A P.O. box will not work.4Office of the Texas Secretary of State. Form 205 – Instructions for Certificate of Formation – Limited Liability Company
You can serve as your own agent if you have a Texas street address and can reliably be there during business hours. Many owners hire a commercial service instead, typically for $100 to $300 per year. The commercial agent’s address, not yours, shows up in public records. If you later change agents, file a separate statement with the Secretary of State; you cannot make that change through the annual franchise tax report.5Texas Comptroller of Public Accounts. Texas Franchise Tax Public Information Report and Ownership Information Report
File the Certificate of Formation
The Certificate of Formation (Form 205) is the document that actually creates your LLC. It is available on the Secretary of State’s website, and once filed, the information becomes public record.6Secretary of State. Form 205 – Certificate of Formation Limited Liability Company
The form asks you to pick a management structure. A member-managed LLC gives all owners direct control over business decisions. A manager-managed LLC assigns that authority to one or more designated managers, who may or may not be owners. Most small businesses with a few active owners go member-managed. Manager-managed makes more sense when some owners are passive investors who do not want a say in daily operations.4Office of the Texas Secretary of State. Form 205 – Instructions for Certificate of Formation – Limited Liability Company
You will also need to provide:
- The full legal name including “LLC” or an equivalent designation.
- The name and physical street address of your registered agent in Texas.
- Names and addresses of initial managers (if manager-managed) or members (if member-managed). At least one person is required.
- A statement of purpose. Most filers use a general statement that the LLC will engage in any lawful business.
- The organizer’s signature and address.
Check every field before you submit. A wrong address or missing name bounces the filing back and delays formation.
One Boundary: Licensed Professions
Licensed professionals such as attorneys, physicians, dentists, architects, CPAs, counselors, and veterinarians cannot form a standard LLC in Texas. They must form a Professional Limited Liability Company (PLLC) instead, and every owner and manager has to hold the relevant professional license. The Secretary of State publishes an entity eligibility chart showing which professions this covers.
What It Costs and How Long It Takes
The base filing fee is $300 whether you file online through SOSDirect (account required) or mail two copies of the completed form to the Secretary of State at P.O. Box 13697, Austin, TX 78711-3697.7Texas Secretary of State. Business Filings and Trademarks Fee Schedule
If you need faster turnaround, the Secretary of State offers three expedited tiers, each stacked on top of the $300:8Office of the Texas Secretary of State. Introducing Texas Express Expedited Business Filings
- Standard expedited, $50: processed within two to three business days. Available by mail or in person.
- Next-day, $500: filed by noon, processed by close of business the following day. Must be submitted in person.
- Same-day, $750: filed by noon, processed by close of business that day. Must be submitted in person.
Without expedited processing, turnaround depends on the Secretary of State’s current volume. Once your filing clears review, you receive a stamped certificate and an official acknowledgment confirming your LLC exists and is authorized to operate.
Get Your Tax ID Numbers
Before you can open a business bank account, hire anyone, or handle most transactions, you need two tax IDs.
The federal Employer Identification Number (EIN) is a nine-digit number from the IRS. You need it to open a commercial bank account, hire employees, and file federal returns. The application is free at irs.gov, and you get your EIN immediately after completing the online interview.9Internal Revenue Service. Employer Identification Number
The Texas Taxpayer Number is an 11-digit number from the Texas Comptroller used for state-level filings, including franchise tax.10Texas Comptroller of Public Accounts. Identify Taxpayer You typically receive it automatically after the Certificate of Formation is processed. If it does not arrive within a few weeks, follow up with the Comptroller’s office.
Draft a Company Agreement
Texas law calls this document a “company agreement” rather than the “operating agreement” name used in other states. It governs the relationships among members, managers, and officers, along with profit distribution, voting, and buyouts. You do not file it with the state, but it is a binding contract among everyone involved.11State of Texas. Texas Code Business Organizations Code 101.052 – Company Agreement
If your agreement is silent on something, the Texas Business Organizations Code fills the gap with default rules that may not match what you actually want. A workable agreement usually covers:
- Each member’s ownership percentage and how it was calculated.
- How profits and losses are allocated, which does not have to follow ownership percentages.
- Which decisions require a vote and what percentage is needed to approve them.
- The process for adding new members or buying out existing ones.
- What triggers dissolution and how assets get distributed.
Single-member LLCs benefit from having one, too. It reinforces the separation between you and the business, which matters if a court ever examines whether your LLC is a legitimate entity or just you operating under a different name.
Franchise Tax and Annual Reporting
Texas has no state income tax, but it does impose a franchise tax on businesses. For the 2026 report year, LLCs with annualized total revenue at or below $2,650,000 owe no franchise tax — but they still must file a report.12Texas Comptroller of Public Accounts. Franchise Tax The report is due May 15 each year.
Every Texas LLC also files an annual Public Information Report (PIR) with the Comptroller, on the same May 15 deadline, and again the filing is required whether or not you owe any tax.5Texas Comptroller of Public Accounts. Texas Franchise Tax Public Information Report and Ownership Information Report
Missing these filings has real consequences. Late reports draw a 5% penalty within 30 days of the due date, 10% after that, an additional 10% after formal notice, and a flat $50 late-filing penalty per report regardless of whether tax is owed.13Texas Comptroller of Public Accounts. Penalties for Past Due Taxes Persistent non-filing leads to forfeiture: the Comptroller can revoke your LLC’s right to transact business in Texas, with at least 45 days’ notice. Once forfeited, your LLC cannot sue or defend itself in Texas courts, and each officer or member becomes personally liable for the LLC’s debts — the exact protection the LLC was formed to provide.[mfm]14Texas Comptroller of Public Accounts. Franchise Tax Account Status
Federal Tax Treatment
The IRS does not tax LLCs as their own category. A single-member LLC is treated as a “disregarded entity,” so all income and expenses flow through to your personal return. A multi-member LLC is taxed as a partnership by default, with each member reporting their share of profits. Either type can elect corporate taxation by filing Form 8832, though most small LLCs stay with the default pass-through treatment.15Internal Revenue Service. Single Member Limited Liability Companies
Sales Tax Permit and Local Licenses
Forming the LLC does not authorize you to start selling. If your business sells physical goods, leases tangible property, or provides taxable services in Texas, you need a sales and use tax permit from the Comptroller before your first sale.16Texas Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions
Many cities and counties also require their own business licenses or permits, depending on the work you do and where you operate. Construction, food service, healthcare, and home-based businesses commonly face local permitting. Check with your city’s planning or permitting office to find out what applies.
What About Beneficial Ownership Reporting?
The Corporate Transparency Act originally required most new LLCs to file a Beneficial Ownership Information (BOI) report with FinCEN identifying anyone who owned or controlled at least 25% of the company. That requirement no longer applies to domestic entities. In March 2025, FinCEN published an interim final rule exempting all U.S.-created entities and their beneficial owners from BOI reporting, and the agency said it will not enforce penalties or fines against U.S. companies or their owners on this requirement.17Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting
The revised rule limits BOI reporting to entities formed under foreign law that have registered to do business in a U.S. state. If your Texas LLC was created in the United States, you are exempt. As of 2026, domestic LLCs have no BOI filing obligation.