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.
It takes 2-3 business days if you file the Certificate of Formation online, and
7-10 business days 3-4 months if you file by mail.
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
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.
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.
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.
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).
- 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
By forming your LLC yourself, being your own Registered Agent, and using our Operating Agreement template you can save over $400.
You can get an LLC in Texas approved in 3-4 business days if you file online. On the other hand, filing by mail takes about 3-4 months (including mail time).
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.
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.
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)