How to Form an LLC in Texas
Quick Start Guide ← you are here
This Quick Start Guide is a brief overview of how to form an LLC in Texas.
Texas LLC Costs:
Texas LLC state filing fee: $300
A Texas LLC can be used to operate a business, or an LLC can be used to hold assets (such as real estate, vehicles, boats, and aircraft).
If you’d like to form an LLC in Texas yourself, follow our Quick Start Guide below (the brief overview), or click on the detailed lessons above.
IncFile ($49 + state fee) or LegalZoom ($149 + state fee)
1. Texas LLC Name
• Search your desired LLC name to make sure it’s available for use.
• Your name must be unique among the existing businesses registered in Texas.
• Search your Texas LLC name in the state database: https://mycpa.cpa.state.tx.us/coa/
• Call the Corporations Section (512-463-5555) to double-check your name.
• Even if you think your name is available, please call the state to confirm. Name conflicts are the #1 reason LLCs are rejected in Texas.
• Designator: your LLC name must include a designator at the end. Texas law allows for the following: LLC (most common), L.L.C., Limited Liability Company, Limited Liability Co., Ltd. Liability Company, Ltd. Liability Co., Limited Company, Ltd. Co., or Limited Co.
2. Texas Registered Agent
• A Registered Agent is a person or company who receives legal mail (called Service of Process) on behalf of your LLC in case your company gets sued. All Texas LLCs must have a Registered Agent on file.
• Your Registered Agent address must be a street address located in Texas. PO Boxes are not allowed.
• Your Registered Agent must sign a Consent to Serve (Form 401A).
• Who can be your Registered Agent in Texas?
– option 1: you can be your LLC’s Registered Agent
– option 2: a friend or family member can be your LLC’s Registered Agent
– option 3: you can hire a Commercial Registered Agent
• If your Registered Agent is going to be an individual, that individual needs to be a resident of Texas. If you don’t have an address in Texas, you’ll need to hire a Commercial Registered Agent.
3. Texas LLC Certificate of Formation
• Texas LLC filing fee: $300 ($0 if you’re a Veteran)
• Filing methods: by mail, online, fax, or walk-in.
• File online: https://direct.sos.state.tx.us/acct/acct-login.asp
(Click “request for SOSDirect account”, enter contact info, enter credit card, then proceed.)
• File by mail: Submit 2 copies of your Certificate of Formation and Consent to Serve, along with your $300 filing fee to:
Secretary of State
PO Box 13697
Austin, TX 78711
• File by fax: 512-463-5709. Pay by credit card with payment form.
• LLC approval time: 5-7 business days (mail or fax); 2-3 business days (online filing).
• What you get: Stamped and approved Certificate of Formation and a Certificate of Filing.
• Expedited filing: Must send cover letter requesting an expedited filing. Send an additional $25. Documents are processed by 5pm on the next business day.
• Veterans: If you are a Veteran of the United States Military, you can form an LLC in Texas for free ($0), as well as be exempt from Texas Franchise Tax (for the first 5 years of your business). You will still need to complete the Certificate of Formation above, however, you will also need to include 2 additional documents with your LLC filing: an Honorable Discharge Confirmation Letter (from the Texas Veterans Commission) and Form 05-904. Here are the instructions from the TVC for the Honorable Discharge Confirmation Letter. You can download Form 05-904 from the Texas Comptroller (near the bottom of the page). Please note, that if you are a Veteran forming an LLC, you can only do so via the mail filing. You cannot file online.
4. Texas LLC Operating Agreement
• Your LLC’s Operating Agreement is an “internal document”. It does not get mailed to the Texas Corporations Section, or any other agency. Just keep it with your LLC’s records.
• The Operating Agreement is where the owners (“members”) of the Texas LLC are listed. This document governs how much each member owns, how profits are split, how taxes are paid, and more.
• If you have a single-member Texas LLC, it’s still best practice to have an Operating Agreement.
5. Federal Tax ID Number (EIN)
• An EIN is issued by the Internal Revenue Service (IRS). It’s used for opening LLC bank accounts, filing taxes, and employee payroll, if applicable.
• Think of the EIN as a “social security number” for your Texas LLC.
• Common names: Federal Tax Number, Federal Employer Number, FEIN, Federal Tax ID Number, EIN, Employer Identification Number. They are all the same thing.
• Wait for LLC approval: Only apply for an EIN after your Texas LLC is approved.
• If you are a non-US resident or don’t have a social security number, you cannot obtain an EIN online. But you can mail or fax Form SS-4 and write “Foreign” on line 7b.
• If your LLC is owned by another LLC, you cannot obtain an EIN online. Mail or fax Form SS-4 instead.
6. Texas LLC Annual Report
• The LLC Annual Report in Texas is known as the Public Information Report (PIR) and Franchise Tax, and this is required by all Texas LLCs.
• Unlike most states where the LLC Annual Report is filed with the Secretary of State, the Annual Report in Texas is filed with the Office of the Comptroller.
• Regardless of income or activity, your LLC still needs to file the Annual Report with the Comptroller each year.
• Depending on your business’ industry, the franchise tax is usually 1% of gross receipts, for gross receipts over $1M.
• Forms and instructions can be downloaded from the Texas Comptroller’s website here.
• Due date: Texas Annual Reports are due by May 15th. The first one is due the year after the year of LLC formation.
• Recommendation: We recommend hiring an accountant to help with your PIR and Annual Franchise Tax filings, as these forms can be quite complicated.
7. Business Licenses and/or Permits
• To find out if you need a business license and/or permit, you need to contact the city, county, township or borough where your Texas LLC is located. These requirements will differ depending on the location of your business, and the industry your Texas LLC is engaged in.
• Need to save time? If you’d rather rather not do the research to determine your business license and permit requirements, we recommend hiring IncFile. They’ll take care of everything for $99.
• Federal taxes: LLCs have “pass through” taxation. Income or losses are usually listed on a Schedule C and filed together with your personal tax return.
• State and local taxes: Your LLC should register and pay taxes with the Texas Comptroller’s Office, as well as your local municipality (city, town, county, etc.).
9. LLC Bank Account
• Maintain liability protection: keep your personal assets separate from your business assets by opening a bank account for your Texas LLC.
• Items needed: Approved Texas Certificate of Formation, Certificate of Filing, EIN, and Driver’s License.
• Shop around: know your options by calling and comparing banks in Texas (some charge a monthly rate, others don’t).
• Debit card: Your bank will issue a debit card when you open the account.
• Credit card: Start building business credit. Shop business credit cards here.
10. Business Phone Number
Instead of using your home telephone number or your cell phone, you can purchase an affordable “virtual business number” specifically for your Texas LLC. You can set this virtual business phone up to forward to your cell phone, go through voice prompts, or configure it any way you’d like.
We recommend using Phone.com as they have the cheapest plans and their customer service is excellent.
They offer local phone numbers as well as 1-800 toll-free numbers. You can easily setup call forwarding, pre-recorded prompts, and get voicemail messages forwarded to your email.
Getting a separate business phone number for your Texas LLC is also a good idea in order to keep your actual number private from those pesky “public record” websites.
Texas State Agencies