Forming an Texas LLC
(2025 Guide)
2025 LLC Guide
How to Start an LLC in Texas (Step-by-Step Guide)
Discover how to start an LLC in Texas, our step-by-step guide. Learn the essential requirements and process to form your business today.
To establish an LLC in Texas, you need to submit a Certificate of Formation to the Texas Secretary of State. The filing fee is $308 and the process takes about 12 days for approval.
Here are the 5 steps you should follow:
Choose an LLC Name
Select a Registered Agent
File a Certificate of Formation
Create an Operating Agreement
Get an EIN
If you prefer to form your LLC on your own, you can use our free guide below. Alternatively, if you’d like professional assistance, we suggest hiring Northwest Registered Agent.
What is the cost to establish an LLC in Texas?
Starting an LLC in Texas requires a fee of $308. This amount covers the filing of the Certificate of Formation, which officially establishes the LLC.
Pro Tip: Great news for veterans! If you are an honorably discharged veteran from the US Armed Forces, including the Texas National Guard, you can start your LLC at no cost. Visit our Free LLC for Texas Veterans page to verify your veteran status and apply for a fee waiver. For further details on costs, refer to LLC Costs in Texas.
How long does it take to form an LLC in Texas?
Filing by mail results in approval within 4-8 weeks, excluding mail transit time. Filing online via SOSDirect leads to approval in 10-12 business days. Alternatively, using SOSUpload online results in approval in 13-15 business days. For updates on processing times, see How long does it take to get an LLC in Texas.
Here’s how to establish an LLC in Texas
1. Check Your LLC Name
Verify your LLC name to ensure it’s available in your state. This step is crucial because two businesses in the same state cannot share the same legal entity name.
Start by searching your desired business name and comparing it to the existing entities in Texas. You can use the Texas Comptroller’s Taxable Entity Search to ensure your LLC name stands out from other businesses.
Next, acquaint yourself with the state’s naming regulations to ensure your Texas LLC name gets approved. We provide further details on these aspects here: Texas LLC Name.
2. Select a Texas Registered Agent
The following step involves selecting a Registered Agent. A Texas Registered Agent is an individual or company responsible for receiving legal mail and state notices on behalf of your Texas Limited Liability Company.
Who is eligible to be an LLC Registered Agent? You have three options for appointing a Registered Agent:
You
A friend or family member
A Registered Agent Service
Texas mandates that LLC Registered Agents must maintain a physical street address within the state. PO Boxes are not permissible. The name and address of the Registered Agent will be included in public records.
If you lack an address in Texas or desire increased privacy, you can opt for a Registered Agent Service for your LLC.
We suggest Northwest Registered Agent
One of the aspects we appreciate most about Northwest is their willingness to allow you to use their office address for your LLC filing. This ensures your personal address is not listed in public records.
Additionally, they provide a service to scan any mail addressed to your LLC and upload it to your online account. Northwest offers exceptional customer service, and we trust them as our own Registered Agent.
3. Submit a Certificate of Formation
To establish an LLC, you must submit the Texas Certificate of Formation. This document, once filed with the Texas Secretary of State, officially creates your LLC.
The cost for filing the Texas Certificate of Formation online is $308. This is a one-time fee for setting up your LLC.
If you prefer to handle the filing yourself, refer to our step-by-step guide: Texas Certificate of Formation. Alternatively, you can hire a company to complete the filing on your behalf.
4. Draft an LLC Operating Agreement
An LLC Operating Agreement acts as a complementary document to the Certificate of Formation. While the Certificate of Formation establishes your LLC, the Operating Agreement identifies the owners of the LLC.
Moreover, many banks require an Operating Agreement when setting up an LLC bank account. It is also invaluable if legal issues arise, as it demonstrates the proper management of your LLC. For these reasons, we advise all LLCs, including Single-Member LLCs, to have an Operating Agreement.
Additionally, an Operating Agreement is considered an “internal document.” This means you don’t need to file it with the state or the IRS (Internal Revenue Service). Simply keep a copy with your business records. You can download a free template below. Then, watch our Texas Operating Agreement video for a step-by-step guide on how to complete it.
5. Obtain an EIN for Your LLC
The following step is to secure a Texas EIN from the IRS for your LLC. Note: An EIN, also known as a Federal Tax ID Number or Federal Employer Identification Number, is essential.
An EIN is needed to:
– Identify your LLC for tax purposes
– Open a business bank account
– Apply for business licenses and permits
How much does an EIN cost? The IRS provides an EIN at no charge.
How long does it take to receive an EIN? Online applications are processed in 15 minutes, while mail or fax applications may take 1-3 months.
How can I obtain an EIN?
– US Citizens/Residents: With an SSN or ITIN, apply online. Follow these instructions: Apply for an EIN online.
– Non-US Residents: You can’t apply online, but you can obtain an EIN via fax or mail. See these instructions: How to get an EIN without an SSN or ITIN.
What should I do after my LLC is approved?
Once your LLC is approved, there are a few important actions to consider.
Open a business bank account for your LLC
to streamline accounting and record-keeping, This will also help maintain your personal liability protection by keeping business finances separate from personal ones.
Obtain any necessary business licenses and permits.
Although Texas does not require a general state business license, you might need a local license or permit depending on your LLC’s location. For instance, starting a daycare might require a license from the city or county. More details can be found on our Texas Business License page.
Complete the Texas Franchise Tax Questionnaire,
which is required to obtain your XT number for filing Franchise Tax Returns, if necessary. Our guide will assist you step-by-step through the Texas Franchise Tax Questionnaire.
File the Franchise Tax Return and Public Information Report annually. Every Texas LLC must submit a Public Information Report (PIR) each year, and some must also file a Franchise Tax Return if annual revenues exceed $2.47 million. These filings ensure your LLC remains in good standing with the state.
The Franchise Tax Return and Public Information Report are free to file, and Franchise Tax is only due if the LLC earns more than $2.47 million annually. These documents must be submitted by May 15 each year. Your first report is due the year following your LLC’s approval, for example, if approved on March 15, 2025, the first due date is May 15, 2026.
Filing can be done online or by mail, though online filing is easier. Note: You’ll need your WebFile Number for the Public Information Report and Franchise Tax Return. Our step-by-step guide, Texas LLC Annual Report, provides more information.
Tax payments and filings are important for LLCs.
Federal income tax is paid by LLC members as part of their personal tax returns, not by the LLC itself.
Taxation depends on the number of owners: a Single-Member LLC is taxed like a Sole Proprietorship, while a Multi-Member LLC is taxed like a Partnership. You may also request the IRS tax your LLC as a C-Corporation or S-Corporation.
Married couples can opt for their LLC to be taxed as a Single-Member LLC (Qualified Joint Venture), which is permissible in Texas, a community property state.
Besides federal taxes, be aware of state and local taxes, such as sales tax. For further details, check Texas LLC Taxes.
Helpful Resources
How to Start an LLC in Texas FAQs
Can I start an LLC online in Texas?
Yes, you can file your LLC online in Texas. The Certificate of Formation filing fee is $308. When using SOSDirect to form your LLC online, approval typically takes 10-12 business days.
What are the benefits of an LLC?
One major benefit of an LLC is the protection of personal assets. If your business faces a lawsuit, your personal assets, such as your home, vehicles, and bank accounts, remain safeguarded. This protection extends to all LLC owners, whether you have a Single-Member LLC or a Multi-Member LLC. Conversely, Sole Proprietorships and Partnerships do not offer this protection, making LLCs a more favorable business structure. Additionally, LLCs benefit from pass-through taxation, meaning the LLC itself does not pay federal income taxes. Instead, profits pass through to the LLC Members, who then report them on their personal tax returns. For further details, see “How are LLCs taxed.”
Is Texas a good state to start an LLC?
Whether Texas is a suitable state for starting an LLC largely depends on your residence and business operations. If you reside or conduct business in Texas, it makes sense to form your LLC there. While some websites discuss tax benefits in certain states, these advantages are irrelevant if it’s not your home state. For instance, forming an LLC in Nevada while living and working in Texas would require registering the Nevada LLC in Texas, incurring additional fees and taxes. This approach results in unnecessary costs without benefits. Therefore, if you live and work in Texas, it is a favorable state to start a business. If not, forming an LLC in Texas isn’t advisable. However, if purchasing real estate outside Texas, establish your LLC in the property’s state. For more insights, refer to “Best State to Form an LLC.”
What is the difference between a Domestic LLC, a Foreign LLC, and a PLLC?
The primary distinctions between Domestic LLCs, Foreign LLCs, and Professional LLCs relate to their formation location and business purpose. A Domestic LLC is formed in its “home state,” where the owner resides and operates. For example, if you live and work in Texas, form your Domestic LLC there. A Foreign LLC is created in a state different from its home state. Here, “foreign” means foreign to the LLC’s home state. If you expand a Texas-based business into New Mexico, register your Texas LLC as a Foreign LLC in New Mexico. LLCs are established at the state level, so to operate in multiple states, you must form or register an LLC in each. This involves setting up a Domestic LLC in your home state and a Foreign LLC elsewhere.
What is a PLLC?
A Professional Limited Liability Company (PLLC) is an LLC designed for providing “professional services.” This term encompasses businesses requiring special state-granted permissions, such as licenses or certifications, to operate legally. Fields like architecture, law, social work, medicine, and veterinary services often use PLLCs. For more on PLLCs, their availability, and specific requirements, read “What’s a Professional LLC?” For further information on Foreign and Domestic LLCs, see: “Foreign LLCs by State” and “Difference between Domestic LLCs and Foreign LLCs.”
About Us
We specialize in guiding individuals through the process of forming LLCs across all states, while also offering a range of comprehensive business services tailored to entrepreneurs.
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