Last updated January 17, 2021
Texas Veteran LLC
(Senate Bill 1049 has not been renewed)
How to form an LLC in Texas
This Quick Start Guide is a brief overview of how to form an LLC in Texas.
Texas LLC costs:
State filing fee: $300
Annual franchise tax: $0 (for most LLCs)
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Veterans can no longer form free LLCs in Texas
This means that Veterans can no longer form free LLCs in Texas. If you want to form an LLC in Texas, you need to pay the LLC filing fee of $300. Please see Texas LLC Certificate of Formation for filing instructions.
In the meantime, our team at LLC University® will monitor any updates on Senate Bill 1049. However, it’s important to note that Senate Bill 1049 will not be up for renewal until the next Texas legislative session, which will happen sometime between Q1 and Q2 of 2021. We will update this page as soon as we have any news.
If you would like Senate Bill 1049 to be renewed, please let your state senator know. Enter your address on the Who Represents Me page. Then click on the Texas Senate box under the map. On the next page, look in the right sidebar for the “Email your senator” link.
Most of the information below is no longer applicable and has been struck out for archival purposes.
If you have a Veteran-owned Texas LLC that was approved between 1/1/2016 and 1/1/2020 (see the date on your Certificate of Formation), you are still exempt from Texas franchise tax for the first 5 years. However, you still need to file a No Tax Due Report every year.
Veterans, thank you for your understanding and thank you for your service!
– The LLC University® Team
Dear Veteran, Thank you for your service! And good news, Texas LLCs are free for veterans. In addition, you are also exempt from paying franchise tax for 5 years. Texas LLCs became free for veterans after Senate Bill 1049 was passed.
In summary, veterans forming a Texas LLC:
don’t have to pay the $300 LLC filing fee
- don’t have to pay franchise tax for 5 years
Requirements for the SB 1049 exemption
In order to form your LLC for free and be exempt for franchise tax for 5 years, the LLC Member (or Members) must:
- own 100% of the LLC (no non-veteran members allowed)
- all LLC members must have been honorably discharged
- you must certify that all LLC members are veterans
1. Active service members cannot be LLC Members (you must be finished with your service and honorably discharged).
2. You can form a veteran-owned LLC in Texas with just 1 Member or as many Members as you’d like. All Members just have to meet the requirements.
LLC must be formed before 1/1/2020
Currently, Senate Bill 1049 is in effect until January 1st, 2020.
This means in order to qualify for your exemption, your LLC must be filed by 1/1/2020. Specifically, that means your LLC effective date must be 12/31/2019 or earlier.
How to form a Texas Veteran LLC Please follow the steps below. 1. Get a copy of your DD-214 A DD-214, also known as DD Form 214, certifies your release or discharge from active duty. You can request a copy of DD-214 from either: You’ll need either one of the following types of Form DD-214: Member Copy 4 Service Copy 2 2. Block out sensitive information in your DD-214 The Texas Veteran Commission states: We cannot ensure data integrity for documents sent digitally. Please take the necessary precautions to protect your information and redact or block sensitive credentials you send via email.” LLC University® recommendation: We recommend making a copy of DD-214 and blacking out your Social Security Number, date of birth, and any other sensitive information. You can either: use editing software (if you’re good with computers) or do it the old-fashioned way: make a copy of DD-214, use a black marker and cross out your SSN, DOB, and other sensitive information; then make a copy again 3. Get a Letter of Verification of Veteran’s Honorable Discharge After you have a copy of your DD-214 (with sensitive information blacked out), you then need a “Letter of Verification” from the Texas Veterans Commission (TVC). In order to get the “Letter of Verification”, you must send them a Request Letter. You can submit your Request Letter and your DD-214 in 1 of 2 ways: by email ([email protected]) by mail: Texas Veterans Commission
PO Box 12277
Austin, TX 78711 Processing time: Please allow the TVC 7-10 business days to return your “Letter of Verification”. Having said that, and depending on how busy they are, you may receive it in as little as 1-3 business days. You will get back the following: Letter of Verification Unique ID (which you’ll enter in Form 05-904; explained below) 4. Complete Form 05-904 After you have your “Letter of Verification” from the TVC, the next step is to complete Form 05-904. Form 05-904 is called the “Certification of New Veteran-Owned Business“. It can be downloaded from the Texas Comptroller website: scroll down to “Additional Franchise Tax Forms” click “Certification of New Veteran-Owned Business” click “05-904, Certification of New Veteran-Owned Business” to download the form Form 05-904 instructions: Enter your LLC name at the top. List each Member’s name, Unique ID (from the TVC), and how much of the LLC they own. Each LLC Member must sign the form Note: Because you are forming an LLC, Form 05-904 doesn’t need to be sent to the Texas Comptroller’s office. It only needs to be sent to the Secretary of State as discussed below. 5. Complete your Texas LLC Certificate of Formation (Form 205) download Form 205 (Certificate of Formation) this is the form that officially creates your LLC make sure you checked your LLC name and selected a registered agent you can find step-by-step instructions here: Texas Certificate of Formation Note: You cannot form a Texas veteran LLC online via SOSDirect. It must be submitted by mail as discussed in the next section. 6. Mail your forms to the Corporations Section (Secretary of State) Gather your 3 final documents: “Letter of Verification” from the TVC Form 05-904 (Certification of New Veteran-Owned Business) Form 205 (Certificate of Formation) Mail them to the Texas Corporations Section: Corporations Sections
Secretary of State
PO Box 13697
Austin, TX 78711 Important LLC name rules for Veterans As per Section 5.062 of the Texas Business Organization Code: 1. Unless you have written permission from a congressionally recognized Veterans Organization, your LLC name cannot imply that your business is created by, or for the benefit of, war veterans or their families. 2. Your LLC name cannot contain the following words (or abbreviations): Veteran Legion Foreign Spanish Disabled War World War How long does it take for my LLC to be approved? Once the Secretary of State receives your Texas veteran LLC filing, it will be reviewed and approved within 7 to 10 business days. It then takes the state about 1 additional week before they get your LLC approval documents to you. They will arrive by mail. You’ll receive back the following documents: Note: Click the links above if you’d like to see an example. You can check the status of your LLC filing on the Secretary of State’s website:
Texas Business Filing Tracker
What if I’m a veteran and I already paid?
If you paid $300 and formed a Texas LLC (anytime after 1/1/2016), you can get a refund.
You’ll need to send the following to the Secretary of State:
- Cover letter asking for a refund (include your name, your contact info, LLC name, and LLC file number)
- “Letter of Verification” from the TVC
- Form 05-904 (Certification of New Veteran-Owned Business)
Once the Secretary of State determines your Texas LLC is qualified for exemption, they’ll:
- refund your filing fee
- and will reclassify your LLC as a Veteran-Owned Business in the state database
Helpful video from Veteran Circles Brandon Wong, from Veteran Circles, has recorded a helpful video which we have embedded below:
While you’re exempt from franchise tax, you still have to file Form 05-163
While you don’t have to pay franchise tax for 5 years, you still have to file a “no tax due report” every year.
The full name of the form is “Texas Franchise Tax No Tax Due Report” (Form 05-163).
Since 2016, this form can no longer be filed by mail.
It must be filed online. You can file it online via the TxComptroller eSystems.
For more information, see our Texas LLC Franchise Tax lesson.
Next Step: Operating Agreement Once you file your Texas Veteran LLC documents, and they are approved by the Secretary of State, you can proceed to the next lesson: Texas LLC Operating Agreement.
Questions? State Contact Info
Texas Secretary of State:
You can contact the Texas Secretary of State at 512-463-5555. Their hours are Monday through Friday from 8am to 5pm, Central Time.
Texas Veterans Commission:
You can contact the Texas Veteran Commission at 512-463-6564. Their hours are Monday through Friday from 7:30am to 5:30pm, Central Time.
You can contact the Texas Comptroller at 800-252-1381. Their hours are Monday through Friday from 8am to 5pm, Central Time.