Costs to starting an LLC Texas
To start an LLC in Texas, you have to file a document called the Certificate of Formation with the Texas Secretary of State. The filing fee is $300.
If you file the Certificate of Formation online using SOS Upload, your LLC will be approved in 13-15 business days. If you file online using SOS Direct, your LLC will be approved in 10-12 business days. And if you file by mail, your LLC will be approved in 4-8 weeks (plus mail time).
But that’s just the filing fee for the Certificate of Formation. There are a few other types of Texas LLC cost you have to consider when forming an LLC in Texas.
The table below shows all the fees for forming an LLC in Texas.
Texas LLC Cost:
|Registered Agent||$0 or $125 (per year)|
|Certificate of Formation||$300|
($0 for Veterans)
|Operating Agreement||$0 (free on our site)|
|EIN Number||$0 (free on IRS site)|
|Franchise Tax Reports||$0 (for most LLCs)|
|Taxes||Varies (filed and/or paid each year)|
Texas LLC Name ($0)
Naming your Texas Limited Liability Company won’t cost you anything. The Texas Secretary of State doesn’t require you to file a Name Reservation or anything like that. You can actually call or email the state before filing your Certificate of Formation to check if your desired name is available.
Once you have that taken care of, you can just enter your Texas LLC name in the Certificate of Formation. Then the Secretary of State reviews your filing and approves your LLC name. Either way, there are no costs associated with naming your TX LLC.
Texas Registered Agent ($0 or $125/year)
Texas law requires that you designate a Registered Agent when forming your LLC. The good news is there is no registered agent fee to pay when you list the Registered Agent on your LLC formation paperwork.
A Registered Agent is a person or company who receives legal documents (called “Service of Process”) if your LLC is involved in a legal proceeding.
There is no additional cost if you (or someone you know) will be your LLC’s Registered Agent. However, if you need to hire a Commercial Registered Agent, that will cost you about $125 per year.
Hiring a Registered Agent Service is a good idea if:
- you don’t have an address in the state (Texas law requires a Registered Agent to have a physical address in the state)
- you want to maintain your privacy by keeping your address off public records
Texas LLC Filing Fee: Certificate of Formation ($300)
You need to file a Certificate of Formation in order to create an LLC in Texas. The Certificate of Formation can be filed by mail or online. The fee for a mail filing is $300 and the fee for an online filing is $308.
The filing fee is a one-time fee. You don’t have to pay any monthly (or annual) fees to maintain your Texas LLC.
We recommend filing your Certificate of Formation online as it’s much simpler and approval time is faster.
New in 2022: Texas Veterans can start their LLC for free! Learn more on Free LLC for Texas Veterans.
LLC approval: After approving your LLC, the Texas Secretary of State will send you a Welcome Letter, Certificate of Filing, and a stamped and approved copy of the Certificate of Formation.
Texas LLC Operating Agreement ($0)
A Texas LLC Operating Agreement is a written contract between the LLC Members. Operating Agreements include detailed information about LLC ownership, how the LLC is managed, and how profits are distributed.
Single-Member LLCs and Multi-Member LLCs should draft an Operating Agreement, keep it with their business records, and give a copy to each Member.
Most websites charge $50 to $200 for LLC Operating Agreements.
Here at LLC University®, we offer free LLC Operating Agreement templates for all types of LLCs.
EIN Number for a Texas LLC ($0)
An EIN Number is also known as an Employer Identification Number (EIN) or a Federal Tax ID Number (FEIN). They all mean the same thing.
Although many websites charge a service fee to help you get an EIN for your LLC, it’s actually free. You can obtain an EIN for your LLC from the IRS at no cost.
We have step-by-step instructions on how to get an EIN for your Texas LLC.
Note: Your EIN is a different number from the 11-digit Texas “Taxpayer Number” which every business entity must get from the Texas Comptroller.
Texas LLC Franchise Tax Report (usually $0)
Over 90% of Texas LLCs don’t have to pay a franchise tax with the Texas Comptroller’s Office. They still have to file though.
Most of our readers just file a No Tax Due Report (if total revenue is below the threshold) as well as a Public Information Report (PIR). It doesn’t cost anything to file these reports.
For established businesses in the state that have to pay franchise tax, the rates are as follows:
- 0.375% of an LLC’s taxable margin (for retailers and wholesalers)
- 0.75% of an LLC’s taxable margin (for all other businesses; and those that don’t use the EZ computation method)
- 0.331% of total revenue (if the LLC is eligible for, and elects, the EZ computation method)
Check out Texas Annual Franchise Tax for more information about annual franchise tax reports.
Texas LLC Public Information Report ($0)
In addition to filing a franchise tax report, all LLCs in Texas have to file a Public Information Report (PIR) each year.
There is no cost (no filing fees) for submitting the PIR to the Secretary of State.
The PIR is due at the same time as your LLC’s franchise tax reports: by May 15th. The first PIR is not due until the year after your Limited Liability Company is formed.
Texas LLC Taxes (varies)
There are many different types of Texas LLC taxes that business owners must pay. Federal income tax, state taxes, payroll tax (if your LLC has employees), and more.
What kind of taxes and how much you’ll have to pay can be determined by working with a qualified accountant in Texas.
The amount you’ll pay your accountant will vary, but most small business owners pay their accountant between $400 to $900 per year.
Texas LLC Filing Cost
The total Texas LLC formation costs (the cost to create the LLC) is $300. These are the only amounts you have to pay if you file the Certificate of Formation yourself.
Texas LLC Annual/Recurring Costs
Depending on the income it earns, your LLC may be liable to pay a franchise tax (as well as other taxes) to the Texas Comptroller.
However, keep in mind that over 90% of LLCs just file franchise tax reports, but don’t pay a franchise tax.
Hiring a Registered Agent company will cost you about $125 per year.
And of course there’s taxes, which include the amount you pay in taxes and how much you pay your accountant for their services. This will vary quite a bit and we’re not able to provide an estimate. You’ll need to speak to a few accountants regarding your business.
Texas LLC Cost FAQs
How much does it cost to open an LLC in Texas?
It costs $300 to start a Texas LLC. This is a one-time filing fee for the LLC Certificate of Formation.
Some LLCs may need a business license in Texas. This depends on your industry and where your LLC is located. The cost of local business permits varies. And depending on what your LLC does, you may need to obtain business insurance.
How much does an LLC in Texas cost per year?
All Texas LLCs need to file an Annual Franchise Tax and Public Information Report every year. Most LLCs don’t pay anything to file these (the PIR is always free, and the Franchise Tax is based on business income).
If you hired a Registered Agent service, you’ll have an annual subscription fee to pay each year. This is usually about $125 per year.
Some LLCs may need a business license in Texas. This depends on your industry and where your LLC is located. You’ll need to check with your municipality to see if there are any annual renewal fees for the business permit.
Should I hire an LLC formation service?
You aren’t required to hire a professional service company (aka a Texas LLC formation service) to form your Texas LLC. You’re allowed to form your LLC yourself if you’d like. If you do it yourself, you’ll only pay the Texas LLC filing fee, not any service fees to a filing company.
However, if you want to save time and make sure your LLC is filed correctly, we recommend hiring Northwest Registered Agent.
Northwest Registered Agent has excellent customer service and they include Registered Agent services free for the 1st year. (Many LLC formation companies also offer Registered Agent services.) They also offer other services, like an Operating Agreement and filing your Annual Report.
Check out Best LLC Services for more suggestions.
Do I need to hire an attorney to form an LLC?
No, you aren’t required to hire an attorney to form your Texas LLC. You’re allowed to complete the LLC formation process yourself if you’d like.
However, some people may want to hire an attorney if their LLC has a complex ownership or management structure, has investors, or requires industry-specific documentation.
A business attorney usually charges between $800 and $2,500 to form an LLC (we can’t say for sure what the minimum fee would be, since every attorney charges differently).
How do I start an LLC in Texas?
Here are the steps to starting an LLC in Texas:
- Choose an LLC business name and make sure it’s available
- Choose who will be your Texas Registered Agent
- File the Texas Certificate of Formation
- Complete and sign an Operating Agreement
- Get a Tax ID Number (EIN) from the IRS
- Open an LLC bank account
- Check whether you need a business or sales tax license in Texas
What’s the cheapest way to start a Texas LLC?
You can get an LLC cheaply by filing your formation documents yourself. You’ll also save money by being your own Registered Agent, and using our free LLC Operating Agreement template.
By forming your LLC yourself, being your own Registered Agent, and using our Operating Agreement template you can save over $400.
How long does it take to get an LLC in Texas?
How long it takes to get an LLC in Texas depends on how you file your Articles of Organization.
You can get an LLC in Texas approved in 13-15 business days if you file online using SOS Upload.
If you file online using SOS Direct, your LLC will be approved in 10-12 business days.
On the other hand, filing by mail takes about 4-8 weeks (plus mail time).
How much does a Texas business bank account cost?
It varies. Some banks charge monthly fees ($10 to $20 per month), but these can sometimes be avoided by meeting certain requirements. For example, if you make a certain number of direct deposits or maintain a specified minimum balance, then they’ll waive the monthly fees.
And you might be able to find a bank that doesn’t charge any monthly fees.
Before you open your LLC business bank account, we recommend calling and asking if there are ways to avoid the monthly maintenance fees.
How much is a Foreign LLC in Texas?
A Foreign LLC is an LLC formed in another state that must register (aka Foreign Qualify) in Texas. This is because the LLC is doing business in both states.
The Texas Foreign LLC cost is $750.
If you form an LLC in Texas, it is called a “Domestic LLC”. If you formed your LLC in another state, it would be a Foreign LLC once you register it in Texas.
Is Texas a good state for an LLC?
Yes, Texas is a great state to start a business. Texas doesn’t charge a state business license fee, has simple LLC requirements; and the state has quick approval times and helpful representatives at the Secretary of State if you have questions.
However, the most important factors in deciding where to start a business are where you live and where you’re doing business.
Meaning, if you live in or do business in Texas, then you should start your business in Texas. While many websites talk about tax rates and advantages of certain states, none of that applies if it’s not the state where you live and do business. And just because a certain state has cheaper LLC fees doesn’t mean it’s a good idea to form your LLC there.
For example, if you form an LLC in Wyoming, but live in and conduct business in Texas, you’ll also need to register your Wyoming LLC in Texas (and pay a much higher registration fee than if you had formed a domestic Texas LLC). And you’ll end up paying Texas taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you are a Texas resident, then yes, Texas is the best state to form an LLC. If you don’t live in and do business in Texas, then no, Texas probably isn’t a good state to start an LLC.
(And don’t forget, an LLC is the best business structure for protecting personal assets)