How to Start an LLC in Texas

L L C members happy after starting an L L C

Whether you're starting a new business or upgrading your current one, starting an LLC in Texas is the best way to protect your personal assets and add credibility to your business. This guide will help make forming an LLC simple and easy.

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You can form an LLC yourself and save a little money or use a professional service and save a lot of time. 

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Starting an LLC in Texas is Easy

It’s easy to form an LLC in Texas yourself. Just follow these steps:

  1. Name Your LLC
  2. Choose a Registered Agent
  3. File the TX Certificate of Formation
  4. Create an LLC Operating Agreement
  5. Get an EIN

Follow our How to Start an LLC in Texas guide below to get started.

Steps to form an L L C in Texas

To learn how to form an LLC in any state, visit our How to Start an LLC guide.

Step 1: Create a Name For Your Texas LLC

Before you register your LLC, you'll need to come up with a name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes.

We go into depth on this topic in our LLC naming guide. We’ll go over the basics below.

Naming Your LLC

First, brainstorm some possibilities. Use our LLC name generator to get the ideas flowing.

Next, make sure your name meets Texas guidelines:

  • it must contain the words limited liability company or limited company, or LLC or L.L.C.
  • it can't contain restricted words like bank, college, veteran, etc without approval
  • it must be distinguishable from any other entity or DBA registered in Texas
  • full list of Texas naming guidelines

Next, do a Texas LLC name search with the Secretary of State to find out if your name is available in Texas.

If your business name is available and meets guidelines, you’ll be able to register it when you file your Texas Certificate of Formation with the Secretary of State.

Is the URL available? Before you commit 100% to a name, check to see if there’s a good web domain available.

We recommend buying your domain right away because even if launching a business website isn’t on your radar right now, it will be soon.

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Once you register a domain name for your LLC, consider setting up a business phone system to establish credibility and enhance your customer service. Nextiva provides a plethora of useful features and a quick, easy setup. Try Nextiva.

Using a Texas Assumed Name (DBA)

A Texas DBA (doing business as), also known as an assumed name, is any registered name that a business operates under that isn't its legal business name. An assumed name can be used by any type of business, including a sole proprietorship, partnership, or limited liability company (LLC).

Learn how to get a DBA in our Texas DBA guide.

Step 2: Choose a Texas Registered Agent

When you file your Certificate of Formation, you'll need to list a registered agent.

A registered agent's job is to accept legal documents like service of process and tax notices for your LLC. To learn more about Texas Registered Agents, read our guide.

Your registered agent can be a person or a registered agent service. You can act as your own registered agent, but many business owners choose to use a registered agent service.

Here are a few things to think about before you decide to act as your own registered agent:

  • You’ll need to be available during normal (9 am - 5 pm) business hours at the address you provide
  • If you run your business from home, you’ll have to make your personal address public
  • You could be served with a lawsuit in front of your family or coworkers
  • You'll have to remember and be responsible for all upcoming filing deadlines and the corresponding filing fee

Recommended: Northwest Registered Agent offers a free year of registered agent service when you form your LLC ($39 plus state fees).

Texas Registered Agent Consent

After the Certificate of Formation is filed, your registered agent must consent in writing or via email. The consent statement doesn't need to be filed with the Secretary of State. 

The statement should include:

  1. The name of your LLC
  2. A statement that the person or company consents to serve as registered agent
  3. The name and signature of the registered agent
  4. The date

Step 3: File the Texas LLC Certificate of Formation

It’s time to officially form your Texas LLC by filing your Certificate of Formation with the Secretary of State and paying the state filing fee with the Texas Secretary of State.

You can file online with the Secretary of State or fill out a hard copy of Texas Form 205 and mail it in. The Texas Secretary of State filing fee is $300.

 Recommended: Now is a good time to decide if your LLC will be member-managed vs manager-managed.

There are 4 main “Articles” on the Certificate of Formation. You'll be asked to provide your:

  1. Entity Name and Type
  2. Business Address
  3. Registered Agent Name and Registered Office Address
  4. Governing Authority Type
  5. Business Purpose

For detailed instructions, visit our Texas Certificate of Formation guide.

Mail Your Certificate of Formation:

Send the form and payment (payable to the Secretary of State) to:

Secretary of State
P.O. Box 13697
Austin, TX 78711

Deliver In Person:

James Earl Rudder Office Building
1019 Brazos
Austin, TX 78701

Or fax it to:

(512) 463-5709

How long does it take to get an LLC approved by the Texas Secretary of State? The LLC processing time is 3 days if filing online or 5 to 7 days if filing by mail.

Step 4: Create A Texas LLC Operating Agreement

Creating a Texas LLC operating agreement (also known in the state as a company agreement) is the only way to legally lock down your LLC’s management and ownership structure. Having this document in place will give you something to return to if a dispute or lawsuit arises. 

Even single-member LLCs benefit from having an operating agreement.

Your operating agreement should outline the following:

  • Each member’s responsibilities
  • How new members will be admitted
  • How existing members may transfer or terminate their membership
  • How profits and dividends will be distributed

You can add as many provisions as you want, as long as they don't conflict with Texas business law. Take a look at our What is an Operating Agreement guide to learn more.

Download a template or create a custom Free Operating Agreement using our tool.

Step 5: Get An EIN

An Employer Identification Number (EIN) is like a Social Security number (SSN) for your company. It is a federal tax identification number that the IRS and the state of Texas will use to track your business activity.

Your EIN will come in handy when it’s time to:

  • Open a business bank account
  • File Federal and State taxes
  • Hire employees

The best way to get an EIN for your LLC in Texas is by using the free online application on the IRS website.

If you prefer though you can mail in your Form SS-4 to the IRS to get your Employer Identification Number:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Read our Get an EIN guide for instructions.

Need Help Forming a Texas LLC?

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Steps After Forming an LLC

After forming your LLC, it's important to:

  • Open a business bank account. A business bank account helps separate personal expenses and company expenses, which is required to maintain your LLC's corporate veil. A corporate veil protects your personal assets from creditors in potential lawsuits against your LLC or Business.

    Learn more in this guide to Banking for Entrepreneurs. For a multi-member LLC, you'll also want to set up capital accounts for members.

  • Get a business credit card. A business credit card will help separate personal and business expenses while building your company’s credit history. Strong credit history will be useful for raising capital in the form of small business loans.

  • Hire a business accountant. A business accountant will help you save on taxes and avoid penalties and fines (e.g., forgetting to pay franchise tax). An accountant makes bookkeeping and payroll easier when hiring employees and they'll also help you manage public accounts. Find out how much you could be saving with a consultation with a business accountant.

  • Get business insurance. Business insurance helps manage risk. The most common forms of business insurance are general liability, professional liability, and workers’ compensation.

Find out the real cost of getting insurance for your business. Get a free quote or call 855-602-1925.

Keep Your Company Compliant

When starting a business in Texas, it's important to understand the licensing and permit requirements. Here's a basic overview of what you need to know:

You may also need to obtain other licenses and permits depending on your business type and location. For example, if you're operating a restaurant, you'll need a food service permit from the county health department. The best way to find out what's required for your specific business is to contact your local government offices or chamber of commerce.

When setting up a business structure as a foreign LLC in Texas you'll need to file Form 5471 and pay a filing fee. A foreign LLC is still required to pay sales tax the Texas annual franchise tax and the business owner must conduct business as any other domestic LLC owner would.

Keep in mind that compliance with licensing and permit requirements is not only necessary for legal reasons - it's also important for protecting individual and business entity interests.

More LLC Resources

  • Texas Foreign LLCs: Forming a foreign LLC allows your company to operate as one entity in multiple states. Download the Texas foreign LLC form to get started.
  • Texas Certificate of Good Standing: A certificate of good standing verifies that your LLC was legally formed. To order, follow our Texas certificate of good standing guide.
  • Dissolving a Texas LLC: If you are ready to dissolve your LLC, follow the steps in our Texas LLC Dissolution Guide.
  • LLC Legal Forms: TRUiC offers a number of free LLC legal forms including operating agreements, LLC resolutions, and hiring documents.

Need Help Forming an LLC?

Read our Best LLC Services review to learn more about pricing and packages.

Texas LLC FAQs

Can an individual or business entity own an LLC in Texas?

Yes, an LLC can be owned by an individual or business entity. The business assets are owned by the LLC, and the members own the LLC. A member can be another LLC or corporation or a single individual. Most LLCs are single-member LLCs.

How is a Texas LLC taxed?

On the federal level, a Texas LLC is taxed as a pass-through entity. This means that the income and losses of the LLC flow through to the individual members, and are reported on their individual tax returns. The LLC itself does not pay taxes on its income. LLCs can also choose to be taxed as an S corporation or C corporation.

On the state level, a Texas LLC is subject to state income taxes as a pass-through entity. LLCs in Texas are also subject to state franchise taxes.

Do I have to file an annual report for my Texas LLC?

Annual reports are called "franchise tax reports" in Texas. The report is due by May 15th of each year and it helps the state keep track of Texas LLCs and their officers. The report also helps the state keep track of any changes in the company, such as a change in management or a change in address.

Do I need to register my Texas LLC with the Texas comptroller?

Small businesses only need to register with the Texas Comptroller of Public Accounts if they are selling goods and therefore collecting sales tax. You can register online through the state website.

What Is an LLC Formation Service?

An LLC formation service is a great option for those looking to form an LLC. Services like these can provide you with the resources and assistance you need to complete the process quickly and easily. They can also help you save money on filing fees, as well as provide you with valuable resources and support along the way.

However, it's important to note that using an LLC formation service is not the cheapest option - it's typically more expensive than doing it yourself. But for most people, it's likely worth the extra cost in order to get the help and support of a professional service.

Do I have to submit any LLC paperwork to the IRS?

If you have formed a Texas LLC, you are not required to submit any paperwork to the IRS. The LLC is a separate legal entity, and as such, is not subject to federal income taxes. However, the LLC may be required to file informational tax returns with the IRS, depending on the amount of income generated by the business.

What are the benefits of an LLC?

LLCs offer personal asset protection, also known as limited liability protection. Forming a registered business entity for limited liability protection is important for all business owners because it protects their personal assets from creditors and other liabilities.

Other benefits of an LLC include increased tax options and credibility.