Quick Answer

To start a Texas LLC, file a Certificate of Formation with the Texas Secretary of State ($300 fee). By May 15 every year, you must file a Franchise Tax Report and a Public Information Report. Filing these reports is free, and the Franchise Tax itself is $0 for small businesses making less than $2.65 million. Texas is an excellent choice due to its lack of personal and corporate state income tax.

Texas LLC filing fee

The state filing fee for your Certificate of Formation is $300. You can submit this document online using the Texas Secretary of State's SOSDirect system. Standard processing generally takes 7 to 12 business days. If you are in a rush, you can pay a $25 expedite fee for same-business-day processing (provided you file online before noon).

After you you have got approved for your LLC, it is time to get an EIN for your Texas LLC. Read more in our EIN guide. Getting an EIN for your LLC is free from the IRS.

Step 1: Choose a name

When choosing a name for your LLC in Texas, the name must include the words "Limited Liability Company" or an abbreviation such as "LLC" or "L.L.C.". The name must also be unique and distinguishable from other business entities registered in Texas. You can search the Texas Secretary of State's database to verify name availability.

Also, be aware that some words are restricted in business names in Texas. This could delay the approval of your LLC which also means you will not be able to get an EIN for your business.

Step 2: Appoint a registered agent

Every Texas LLC must designate a registered agent. This is an individual or authorized business entity responsible for receiving service of process, lawsuits, and official state correspondence on behalf of the LLC. The agent must have a physical street address in Texas (P.O. Boxes are not permitted) and must be available during regular business hours.

You can be your own registered agent in Texas as long as you have a physical Texas address (not a PO Box) and are available during normal business hours. Many business owners hire a professional registered agent for privacy and reliability. To learn more about how to choose a registered agent, read our guide on how to choose a registered agent.

Step 3: File formation documents

Your LLC is officially created when you file the Certificate of Formation (Form 205) with the Texas Secretary of State. Here you will need to provide your LLC's name, the name and address of your registered agent, and whether the LLC will be managed by its members or by managers. The state filing fee is $300.

After your Texas LLC is approved, you will receive a confirmation email with a link to download a PDF of your Certificate of Formation. You can then use this document to open a business bank account and apply for an EIN for your Texas LLC . Read more in our guide about EINs.

Step 4: Create an operating agreement

Even though Texas law does not strictly require you to file an operating agreement with the state. However, drafting one is highly recommended since it serves as the internal governing document for your LLC, establishing ownership percentages, voting rights, and how profits are divided. But banks in Texas will require a copy of your operating agreement to open a business bank account. Without an operating agreement, it may be difficult to separate your personal and business finances, which could result in your personal assets being at risk in the event of a lawsuit.

Step 5: Get an EIN

An Employer Identification Number (EIN) is a free 9-digit tax ID assigned by the IRS. It functions like a social security number for your business. You will need an EIN to hire employees, open a business bank account, and file federal tax returns. You can apply for an EIN online directly through the IRS website.

To get an EIN for your Texas LLC, you will need to visit IRS.gov and apply or you can use a third party, but be aware that they charge a fee for preparing the application. It may seem convenient to have a company prepare your application for you, but it is not necessary and will cost you extra money. But usually these third party services bundle the EIN application with their state filing fee. So if you are using a service to file your LLC formation documents, they will usually prepare the EIN application for you for free.

Official EIN application website IRS.gov EIN application

Step 6: Register for state taxes if needed

Why many small business owners choose Texas is that the state is famous for having no personal state income tax. Your pass-through LLC profits are entirely tax-free at the personal state level. It also depends if you have an Online business or physical business. If your LLC sells physical goods, you must register with the Texas Comptroller to collect the state's 6.25% base sales tax, plus any local additions (which can bring the total to 8.25%).

Step 7: File annual reports and stay compliant

In Texas it is very simple to maintain your LLC. In fact, Texas LLCs do not file an annual report with the Secretary of State. Instead, every year by May 15, you must file two forms with the Texas Comptroller:

  • Public Information Report (PIR): Updates the state on your LLC's managers and directors.
  • Franchise Tax Report: Calculates your margin tax. However, the 2026 exemption threshold is $2.65 million. If your LLC makes less than this, you owe $0 in Franchise Tax, but you still must file the "No Tax Due" report.

Filing these reports is free, but failing to file them on time will result in a $50 penalty and the eventual forfeiture of your LLC's right to transact business.

Texas LLC Cost

Fee Type Amount
Formation fee $300
Registered agent estimate $39 - $150 / year
Annual report fee $0 (None)
Franchise tax $0 (if revenue < $2.65M)
Publication fee if applicable $0 (None)
WHEN THIS MAY NOT APPLY

If you do not live in Texas, do not operate from Texas, and do not have a specific Texas-related reason for forming there, a Texas LLC may not be the best default choice. You may still need to register the LLC as a foreign LLC in the state where you actually operate, which can create duplicate filing fees, registered agent costs, and annual compliance requirements.

Texas currently charges $300 to form a domestic LLC. Annual reports are currently a $0 Public Information Report. For many purely online businesses, it is usually worth comparing your home state with commonly used business-friendly states such as Wyoming, which charges $100 to form an LLC and has a $60 minimum annual license tax, before choosing Texas.

Should you form your LLC in Texas?

To start a Texas LLC it usually makes sense if you live in Texas, operate your business from Texas, or have a clear legal or tax reason to use Texas. If you live and operate somewhere else, forming in Texas may create extra registered agent costs, foreign qualification requirements, and duplicate compliance obligations. Texas may appeal to some owners, but compare it with Wyoming, Delaware, Nevada, and your home state in our guide to the best state for an online business LLC. For a comprehensive overview of starting a business, visit our LLC formation hub.

Situation Is a Texas LLC usually a good fit?
You live in Texas Usually yes
Your business operates in Texas Usually yes
You want privacy Depends on state rules
You live in another state Usually only if you have a specific reason
You are a non-US resident Depends on banking, taxes, and compliance needs

Texas LLC vs Wyoming LLC

For non-resident business owners, Wyoming remains a better option than Texas. While both states offer zero personal state income tax and negligible ongoing compliance fees (Texas is $0; Wyoming is $60 minimum), Wyoming provides superior privacy. Wyoming offers robust statutory anonymity, keeping your ownership details entirely off public registries. Texas, conversely, requires the filing of a Public Information Report that exposes manager details to the public. Additionally, Wyoming's initial formation fee is only $100, compared to Texas's $300. If you operate a brick-and-mortar business inside Texas, you must register a Texas LLC. If you run a purely online business, Wyoming is a better choice due to its privacy protections and lower upfront costs.