How to Form an LLC in Texas

This is the complete guide to forming a limited liability company in Texas. We cover every step from choosing your LLC name to filing your Certificate of Formation with the Texas Secretary of State. The state filing fee is $300, filed through SOSDirect at sos.texas.gov, and standard processing takes 5-7 business days.

Table of Contents

1. Overview — Why Form an LLC in Texas
2. Choose a Name
3. Appoint a Registered Agent
4. File Your Certificate of Formation
5. Create an Operating Agreement
6. Get Your EIN
7. Costs
8. After You File
9. FAQ

Overview — Why Form an LLC in Texas

Texas is governed by the Texas Business Organizations Code (BOC), Title 3, Chapter 101, which provides one of the most flexible LLC frameworks in the country. Here is why Texas stands out for LLC formation:

• No state income tax — Texas is one of nine states with no personal income tax. LLC members keep more of their pass-through income without state-level taxation on earnings.
• High franchise tax exemption threshold — Most small LLCs owe zero franchise tax. The no-tax-due threshold is $2.47 million in annualized revenue for 2025 reports and $2.65M for 2026, meaning the vast majority of LLCs pay nothing.
• Series LLC availability — Under BOC sections 101.601 through 101.621, Texas allows Series LLCs that let you create separate protected series within a single entity — ideal for real estate investors and multi-venture entrepreneurs.
• Strong charging order protection — Texas the Texas Business Organizations Code limits creditor remedies to charging orders against LLC membership interests, protecting the LLC itself from a member's personal creditors.
• Community property advantages — Texas is a community property state, which provides planning opportunities for married couples forming single-member LLCs.

Compared to other business structures, an LLC in Texas gives you personal liability protection without a board of directors, shareholder meetings, or the double taxation of a C corporation. For detailed breakdowns, see our LLC vs Corporation and LLC vs Sole Proprietorship comparisons.

Choose a Name

Your Texas LLC name must comply with the Texas Business Organizations Code and include one of: "Limited Liability Company," "Limited Company," "LLC," "L.L.C.," "LC," or "L.C." The name must be distinguishable on the records of the Texas Secretary of State from other registered entities.

Restricted words — Names including "bank," "trust," "insurance," or "university" require additional approval from the relevant state regulatory agency. Words implying government affiliation are prohibited.

Before committing to a name, search the SOSDirect database to verify availability. If you need time to finalize formation paperwork, you can reserve your name for 120 days by filing Form 501 with a $40 fee.

Appoint a Registered Agent

Texas requires every LLC to designate a registered agent with a physical street address in the state . The registered agent accepts service of process, tax notices, and official correspondence on behalf of your LLC during regular business hours.

Under the Texas Business Organizations Code, a Texas LLC cannot serve as its own registered agent. An individual registered agent must be a Texas resident at least 18 years old. A business entity serving as registered agent must be authorized to do business in Texas.

The Secretary of State also cannot serve as a default agent in Texas — unlike some states, you must always maintain a valid registered agent or risk administrative forfeiture.

A professional registered agent service satisfies these requirements while keeping your personal home address off the public filing record at SOSDirect.

File Your Certificate of Formation

This is the legal act that creates your LLC. You file the Certificate of Formation (Form 205) with the Texas Secretary of State and pay the $300 filing fee. Note: Texas calls this document a "Certificate of Formation," not "Articles of Organization" — though both terms create an LLC, using the correct Texas terminology matters for your filing.

Required information on Form 205:

• Entity name with proper LLC designator
• Whether the LLC is member-managed or manager-managed
• Registered agent name and physical Texas address
• Duration of the entity (perpetual or specific date)
• Purpose (most filers use "any lawful purpose")
• Organizer name and address
• Governing authority (initial managers or members)

You can file online through SOSDirect at https://direct.sos.state.tx.us/ or by mailing the form to the Secretary of State at P.O. Box 13697, Austin, TX 78711. For a step-by-step walkthrough, see our detailed filing steps.

Create an Operating Agreement

Texas does not legally require a written operating agreement (called a "company agreement" under the Texas Business Organizations Code), but every LLC should have one. Your operating agreement defines ownership percentages, profit distribution, management responsibilities, voting rights, and what happens when a member leaves or dies.

Under the Texas Business Organizations Code, without a written agreement, your LLC defaults to the statutory provisions in the BOC — which may not align with member intentions. For example, the default in Texas is equal profit sharing regardless of capital contribution unless your agreement states otherwise.

Texas courts strongly enforce operating agreements. Under the Texas Business Organizations Code, properly drafted operating agreement provisions override statutory defaults, reinforcing why having one is critical.

Get Your EIN

An Employer Identification Number (EIN) is your LLC's federal tax ID number issued by the IRS. You need it to open a business bank account, hire employees, and file federal taxes. The IRS issues EINs free of charge — apply online at irs.gov for immediate issuance (available Monday-Friday, 7am-10pm Eastern).

Multi-member LLCs must have an EIN. Single-member LLCs technically can use the owner's SSN, but getting a separate EIN is strongly recommended for privacy, bank account requirements, and avoiding identity theft.

Costs

Here is the complete cost breakdown for forming and maintaining a Texas LLC:

For a full analysis of first-year and ongoing costs, see our complete cost guide.

Timeline

The formation timeline depends on your filing method:

• SOSDirect online filing: 5-7 business days (standard processing)
• Mail filing: 2-3 weeks typical
• Expedited online: 1-2 business days (additional fee varies)

After You File

Once your Certificate of Formation is approved and filed, you will need to handle several post-formation tasks:

• File your first Franchise Tax Report and Public Information Report with the Texas Comptroller (due May 15 following formation)
• Open a business bank account
• Obtain necessary business licenses — check with your city/county
• Understand your franchise tax obligations
• Consider whether to elect S-corp taxation for self-employment tax savings
• Review your annual compliance checklist

Popular Industry Guides

Forming an LLC for a specific industry? See our guides for real estate investors, freelancers and contractors, e-commerce sellers, and construction businesses.

Helpful Guides

• Do I need an LLC? — deciding if an LLC is right for your situation
• LLC for married couples — community property implications in Texas
• Convert sole proprietorship to LLC — upgrading your existing business
• LLC vs DBA — understanding the difference
• LLC asset protection — how Texas charging order protection works

FAQ

How much does it cost to form an LLC in Texas?

The state filing fee is $300 for the Certificate of Formation (Form 205). Ongoing, you must file an annual Franchise Tax Report and Public Information Report with the Texas Comptroller by May 15, but most LLCs owe $0 in franchise tax if revenue is under $2.47 million.

How long does it take to form a Texas LLC?

Standard online processing through SOSDirect takes 5-7 business days. Mail filings take 2-3 weeks. Expedited processing is available for an additional fee and typically completes within 1-2 business days.

Do I need a registered agent in Texas?

Yes. Under Texas the Texas Business Organizations Code, every LLC must maintain a registered agent with a physical street address in Texas. The LLC cannot serve as its own agent. Failure to maintain a registered agent can lead to administrative forfeiture of your LLC.

Can I form a Texas LLC if I do not live in Texas?

Yes. Texas does not require LLC members or managers to be state residents. However, you still need a registered agent with a physical address in Texas. See our non-resident formation guide.

Do I need an operating agreement?

Texas does not legally require one, but operating without an agreement means BOC default rules apply — including equal profit sharing regardless of capital contributions. An operating agreement protects member rights, clarifies management, and is typically required by banks to open a business account.

Does Texas have a state income tax on LLCs?

No. Texas has no personal or corporate income tax. LLC members pay no state income tax on their pass-through earnings. Texas does impose a franchise tax (margin tax) on entities with revenue exceeding $2.47 million, but most small LLCs fall below this threshold and owe nothing.

What is a Texas Series LLC?

A Series LLC lets you create separate "series" within one LLC, each with its own assets, liabilities, and members. Liability in one series does not affect the others. This is popular among real estate investors who want one LLC with a separate series for each property. See our Series LLC guide.

What are the ongoing requirements for a Texas LLC?

You must file a Franchise Tax Report and Public Information Report with the Texas Comptroller annually by May 15. You must also maintain a registered agent and keep your registered office address current with the Secretary of State. Missing the May 15 deadline results in penalties and eventual forfeiture of your LLC's right to transact business.