Key Takeaways
- $300 Certificate of Formation filing fee (Form Form 205), paid to the Texas Secretary of State
- No TX personal income tax; franchise tax is $0 for most small LLCs under the ~$2.47M No Tax Due threshold
- Public Information Report (Form 05-102) due within May 15 of the first full year in business of formation, $0 under the No Tax Due threshold (currently ~$2.47M in revenue) fee; 5% penalty plus interest on any tax owed late penalty
- Operating agreement not legally required in Texas, but strongly recommended for asset protection and member clarity
- Must designate a Texas registered agent with a physical Texas street address
- No publication requirement
- Same-day filing available through LLC Attorney at no markup on state fees
Texas is one of the most business-friendly states in the country for LLC formation — a $300 Certificate of Formation filing fee, no state personal income tax, no mandatory operating agreement, and an online filing system that processes immediately. Most Texas LLCs owe $0 in franchise tax as long as annual revenue stays below the No Tax Due threshold (approximately $2.47M). This guide covers every step and cost, with same-day filing available through LLC Attorney starting at $49.
Who Should Form an LLC in Texas?
Texas rewards business owners who want low overhead and strong asset protection. An LLC is the most popular business entity in Texas for good reason: it combines personal liability protection with pass-through taxation and minimal ongoing state compliance. Freelancers, e-commerce sellers, real estate investors, and professional service providers all benefit from the LLC structure.
Texas entrepreneurs value the LLC's flexibility. Unlike corporations, Texas LLCs have no strict governance rules — members can structure operations, profit allocation, and management authority however they agree in their operating agreement. Pass-through taxation means business income is only taxed once, on the owners' personal federal returns.
Texas's strong economy, no state income tax, and large consumer base make it an excellent jurisdiction for both home-state and foreign LLC registrations. Real estate investors frequently form Texas LLCs to isolate liability for each property, and technology founders often choose Texas as a lower-cost alternative to Delaware or California.
When Are You Required to Form an LLC in Texas?
An LLC becomes essential when you are taking on financial or legal risk in your business. If you are conducting active Texas business operations and want your personal assets protected from lawsuits, debts, or contractor disputes, an LLC is the right structure. It is particularly critical once you start hiring employees or entering into significant contracts.
Banks, commercial landlords, and enterprise vendors typically require an LLC or corporation before doing business with you. Operating as a sole proprietor can limit your access to business financing and credit. Forming a Texas LLC also triggers proper registration for sales tax (if applicable) and helps you establish a separate business credit profile.
What's Unique About Texas LLCs?
Texas stands out primarily for what it does not have: no state personal income tax and no annual Secretary of State report for LLCs. Most Texas LLCs owe $0 in franchise tax, yet must still file an annual Public Information Report (Form 05-102) with the Texas Comptroller by May 15 — a frequently missed requirement.
The Texas franchise tax is calculated on taxable margin rather than revenue, which means many capital-intensive businesses with high revenues but thin margins owe little or nothing. LLCs qualifying as wholesalers or retailers pay 0.375% on taxable margin; the standard rate is 0.75% on margin.
Texas allows single-member and multi-member LLCs with identical liability protections. There is no publication requirement, no minimum annual franchise tax for most businesses, and no mandatory operating agreement filing.
Key facts:
- Texas franchise tax: $0 under No Tax Due threshold (~$2.47M revenue); 0.375–0.75% on margin above
- Public Information Report filed annually (filed with tx comptroller, not sos)
- Annual Public Information Report (Form 05-102) filed with Comptroller, not SOS
- No annual SOS report; no state personal income tax
Selecting a Name for Your Texas LLC
Your Texas LLC name must be distinguishable from all existing entity names in the Texas SOS database. It must include 'Limited Liability Company,' 'LLC,' or 'L.L.C.' Search the Texas SOS name database at mycpa.cpa.state.tx.us before filing. You can reserve a name using Form 501 ($40 fee, 120-day hold) to prevent others from claiming it while you prepare your paperwork.
If you plan to operate under a trade name different from your LLC's legal name, Texas requires an Assumed Name Certificate — commonly called a DBA. This is filed at the county clerk's office in each county where you conduct business, not with the Secretary of State. Fees vary by county ($10–$35) and Assumed Name Certificates must be renewed every 10 years.
When Should You Consult an Attorney for Your Texas LLC?
You don't typically need a lawyer for a simple, single-member Texas LLC. But professional advice is essential if you have multiple owners, complex ownership percentages, high-liability risks, intellectual property, or are seeking outside funding. A lawyer makes sure your operating agreement fully protects your interests from day one.
It is highly recommended to seek professional counsel in the following scenarios:
- Multiple members or investors: You need a customized operating agreement to outline ownership stakes, voting rights, dispute resolution, and exit strategies. Off-the-shelf templates rarely cover these contingencies.
- High-risk industries: If your business faces significant liability exposure (manufacturing, construction, consulting), an attorney helps ensure the corporate veil is not pierced.
- Complex assets and IP: If your business will own patents, trademarks, or real estate, a lawyer ensures these assets are properly transferred and protected under the LLC.
- Raising capital or adding partners: If you plan to seek venture capital or issue equity to employees, you may need a different business structure entirely, such as a C-Corporation.
- State and local requirements: Texas franchise tax applies even to businesses with very low revenue — an attorney or CPA can confirm your filing obligations and help structure the business to minimize Texas tax exposure.
Unlike formation-only services, LLC Attorney gives you on-demand access to licensed attorneys: flat-fee consultations in 30-minute increments, no retainer. You can talk to a licensed attorney about Texas's specific requirements before and after you file.
Designating a Registered Agent
Every Texas LLC must designate a registered agent with a physical Texas street address (P.O. boxes are not accepted). The registered agent is responsible for receiving service of process — lawsuits, legal notices, and official state communications — during normal business hours.
Many Texas LLC owners designate a professional registered agent service to keep their personal address off the public SOS database. If your registered agent becomes unreachable or moves without updating the SOS, Texas can administratively terminate your LLC. LLC Attorney provides registered agent service in Texas as part of the formation package.
If the state is unable to deliver legal notices to your registered agent, Texas can administratively terminate your LLC without additional warning.
Filing the Necessary Formation Documents
To form a Texas LLC, file the Certificate of Formation (Form 205) with the Texas Secretary of State via SOSDirect or by mail. The filing fee is $300. The Certificate of Formation establishes your LLC's legal existence, naming your registered agent, principal office, and management structure.
Online filings via SOSDirect process the same business day — no expedited fee required. Form 205 requires you to declare whether the LLC is member-managed or manager-managed. This decision determines who has authority to bind the company to contracts and should align with your operating agreement.
Member-Managed vs. Manager-Managed: What to Choose
When you file Form Form 205, you must choose a management structure. This decision cannot be left blank.
Member-managed means all LLC owners share authority over day-to-day decisions. Every member can sign contracts, open accounts, and act on behalf of the company. This is the right choice for small teams where all owners are actively involved in running the business.
Manager-managed means one or more designated managers run the company's operations. Managers can be members or outside appointees. This structure works best when your LLC has passive investors, when operational roles differ significantly between members, or when you want to limit decision-making authority to a smaller group.
Your management structure is declared on Form Form 205 and can be modified later through your operating agreement. If you are the only member and you will run the business yourself, choose member-managed. If you have investors who are not involved in operations, choose manager-managed.
Filing an Initial Public Information Report
Texas LLCs do not file an initial Statement of Information or report with the Secretary of State after formation. However, every Texas LLC must file an annual Public Information Report (Form 05-102) with the Texas Comptroller of Public Accounts by May 15 each year — even if $0 franchise tax is owed.
The Public Information Report (PIR) discloses your LLC's officer and director information and must be filed along with your annual franchise tax return (or No Tax Due Report if under the threshold). Missing the May 15 deadline triggers a 5% penalty. This is a Comptroller filing, not an SOS filing, and the two agencies are separate — your LLC can be in good standing with the SOS but delinquent with the Comptroller.
Your Texas LLC Operating Agreement (Strongly Recommended)
Your operating agreement does not need to be filed with the Texas Secretary of State. Keep it with your company records and give a copy to every member.
A complete operating agreement covers: member rights and responsibilities, ownership percentages, profit and loss distribution, management structure, voting procedures, and dissolution rules. Texas permits oral or written operating agreements, but a written agreement is essential for opening a business bank account, handling member disputes, and maintaining the LLC's liability shield.
A generic template may not reflect Texas law on member authority, voting thresholds, or dissolution procedures. Texas courts have allowed members to challenge management decisions when the operating agreement was ambiguous or absent. LLC Attorney drafts operating agreements tailored to Texas's requirements.
Obtaining an EIN and Setting Up a Business Bank Account
An Employer Identification Number (EIN) is required for your Texas LLC if you have more than one member, plan to hire employees, or want to open a business bank account. Apply free at irs.gov/ein. The online application is available Monday–Friday, 7 a.m.–10 p.m. Eastern. Non-U.S. applicants without an SSN or ITIN must apply by phone (267-941-1099).
Opening a dedicated business bank account is one of the most important steps after forming your LLC. Commingling personal and business funds is the fastest way to lose your LLC's liability protection — Texas courts have pierced the corporate veil in cases where no separation was maintained. Bring your Certificate of Formation, EIN, and operating agreement to the bank.
Registering for Texas State Taxes and Business Licenses
Your federal EIN does not automatically register you with Texas state agencies. Depending on your business type, you may need to register for:
- Texas sales and use tax (TX Comptroller, if you sell taxable goods or services in Texas) — comptroller.texas.gov
- Texas employer payroll taxes (TX Workforce Commission, if you are hiring Texas employees) — twc.texas.gov
- Texas sales and use tax (if selling taxable goods or services in Texas)
Failure to register when required results in back taxes, penalties, and interest.
What to Do After Forming Your Texas LLC
Once your Certificate of Formation is filed and your EIN is in hand, Texas LLC compliance is ongoing. Key annual obligations include:
- Annual Public Information Report (Form 05-102): due May 15 with the TX Comptroller — required even if $0 franchise tax
- Franchise Tax Return (Form 05-158 or 05-163): due May 15; $0 for most small LLCs under the No Tax Due threshold
- Texas sales tax return: if your LLC sells taxable goods or services, file monthly, quarterly, or annually with the TX Comptroller
- Maintain your registered agent: update the SOS if your registered agent changes to avoid administrative termination
Cost to Start an LLC in Texas
Texas is one of the most affordable states to form and maintain an LLC. The table below covers every state fee you are likely to encounter:
| Fee | Amount | Notes |
|---|---|---|
| Certificate of Formation (Form Form 205) | $300 | Standard processing: same business day online via SOSDirect; verify at Texas Secretary of State for current times |
| Public Information Report (Form 05-102) | $0 under the No Tax Due threshold (currently ~$2.47M in revenue) | Due within May 15 of the first full year in business; 5% penalty plus interest on any tax owed late penalty |
| Franchise Tax (No Tax Due) | $0 | Still must file annual Public Information Report (Form 05-102) by May 15 |
| Franchise Tax (above threshold) | 0.375–0.75% | On taxable margin; wholesale/retail rate 0.375%, standard rate 0.75%; due May 15 |
| Registered Agent (professional service) | $100–$300/yr | LLC Attorney registered agent service available |
| Business Name Reservation | $40 | Holds name for 120 days |
| Assumed Name (DBA) / DBA | $10–$35 | Assumed Name Certificates are filed at the county level with the county clerk's office.; fee varies |
| Certificate of Amendment (Form 424) | $150 | To change LLC name later |
| Legal / Tax Advisory | Varies | On-demand attorney consults at LLC Attorney |
How to Form a Texas LLC Step by Step
If You Do It Yourself
Choose a business name that meets Texas's requirements.
Reserve your name if you need time to prepare (optional).
Designate your Texas registered agent.
Decide your management structure before you open the form.
Download the current version of Form Form 205 from the Texas Secretary of State website.
Complete Form Form 205 carefully.
Submit Form Form 205 and pay the $300 filing fee.
Wait for your Certificate of Formation to be approved.
Receive and store your stamped Certificate of Formation.
Draft your operating agreement.
File your initial Public Information Report (Form 05-102) within May 15 of the first full year in business.
Apply for your federal EIN with the IRS.
Open a dedicated business bank account.
Register for Texas state taxes.
Pay your Texas annual state taxes and fees by the correct deadlines.
Set annual compliance reminders for every year going forward.
- Annual Public Information Report (Form 05-102): due May 15 — required even if $0 tax owed
- Franchise Tax Report: due May 15 — $0 for most small LLCs under the No Tax Due threshold (~$2.47M revenue)
- Texas sales tax permit (if selling taxable goods/services): file returns monthly, quarterly, or annually based on volume
If LLC Attorney Does It for You
Submit your information
Name, management structure, registered agent preference, and target formation date. No forms to find or download.
We handle everything
LLC Attorney files your Certificate of Formation, drafts your operating agreement, handles your EIN application, and covers same-day filing if needed.
Receive your documents
Approved Certificate of Formation, EIN confirmation, and operating agreement through your client portal. Annual compliance reminders included.
What You Actually Get When You Form Your Texas LLC with LLC Attorney
A $0 filing offer is never really free in Texas. Before any service markup, Texas itself charges $300 at formation for the Certificate of Formation, due upfront. Once you add a Texas registered agent, an operating agreement (strongly recommended for asset protection), and the EIN that nearly every LLC needs, an advertised free price typically lands in the $400 to $500 range.
Included with LLC Attorney formation:
- Same-day or 24-hour Texas filing at no markup on the state fee. Most services charge extra to expedite.
- An attorney-drafted operating agreement, customized, not an auto-generated template.
- Access to attorney-trained Business Success Advisors at no charge, to guide entity and structure decisions.
- Optional flat-fee attorney consultations (no retainer) when your situation needs a licensed attorney.
- One account to manage ongoing Texas compliance: annual report filing and mail scanning.
Texas rewards early investment in compliance. the annual Public Information Report due May 15 to the Comptroller is easy to miss but critical to avoid penalties.
Starting Your Texas LLC with LLC Attorney
Texas LLC formation is straightforward — a $300 Certificate of Formation, same-day online processing, no state income tax, and minimal ongoing compliance. The most commonly missed obligation is the annual Public Information Report filed with the Comptroller by May 15. LLC Attorney handles formation and registered agent service in Texas starting at $49.
LLC Attorney handles Texas LLC formation starting at $49. Same-day filing is available at no markup on state fees. On-demand, flat-fee attorney consultations in 30-minute increments — no retainer — cover operating agreement drafting, entity type questions, and state tax planning. Everything you need for Texas, without a traditional law firm retainer. See our full pricing for all service tiers.
Frequently Asked Questions
Online filings through SOSDirect process the same business day. Mail filings take 5–7 business days under normal volume. Because online processing is already immediate, Texas does not offer a separate expedited service tier for online submissions.
Most Texas LLCs owe $0 state franchise tax if annual revenue stays below the No Tax Due threshold (approximately $2.47M in 2024–2025). You still must file an annual Public Information Report (Form 05-102) and a No Tax Due Report (Form 05-163) with the Texas Comptroller by May 15 each year. Texas has no state personal income tax, so pass-through income is only taxed federally.
Yes, single-member LLCs in Texas are treated the same as multi-member LLCs for franchise tax purposes. If your revenue is under the No Tax Due threshold (~$2.47M), you file a $0 return. Federally, a single-member LLC is a disregarded entity — income flows to your personal federal return with no separate entity-level tax.
Texas has no statewide business license, but most cities and counties require local business permits. Specific industries (food service, healthcare, construction, financial services) require state-level professional licenses. Check with the Texas Department of Licensing and Regulation (tdlr.texas.gov) and your local government.
A Texas LLC can hire employees. You will need an EIN from the IRS, register with TX Workforce Commission for payroll taxes, and comply with Texas employment law requirements. LLC Attorney's formation packages include EIN filing.
To change your Texas LLC name, file a Certificate of Amendment (Form 424) with the Texas Secretary of State. The filing fee is $150. You should also update your Assumed Name Certificates at the county level if you operate under a DBA. The form is Form 424 and the fee is $150.
To dissolve a Texas LLC, file a Certificate of Termination (Form 651) with the Texas Secretary of State ($40 fee) and submit a final franchise tax return with the Comptroller. All outstanding franchise tax obligations must be settled before the LLC can be formally terminated.
Failing to file or pay Texas franchise taxes results in a 5% penalty (increasing to 10% after 30 days delinquent) plus interest. The Comptroller can forfeit your LLC's right to conduct business in Texas. Reinstatement requires paying all back taxes, penalties, and filing a certificate of reinstatement.
If the Texas Secretary of State cannot deliver legal notices to your registered agent, the state can administratively terminate your LLC without additional warning. A professional registered agent service ensures a qualified person is available at a physical Texas address during business hours to receive any legal documents on your behalf.
Texas does not legally require LLCs to have an operating agreement, but it is strongly recommended. Without one, your LLC is governed by default Texas LLC law (Tex. Bus. Orgs. Code Ch. 101), which may not match how you want the business to operate. A written operating agreement is typically required to open a business bank account and is essential for protecting member interests.