How to Start an LLC in Texas: Step-by-Step (With Costs)
Texas makes it pretty tempting to start a business. No state income tax, a huge customer base, and cities where new companies pop up every week. If you are ready to make it official, learning how to start an llc in texas step by step is simpler than most people expect, and your LLC can be up and running in a few days.
If you want the short version of how to start an llc in texas step by step, it is this: choose a name, appoint a registered agent, file Form 205, and open a business bank account. the state filing itself takes less time than a trip to the DMV.
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An LLC gives you a real business structure without the heavy formality of a corporation. Your personal assets get a layer of separation from the business, and taxes stay flexible. Here’s how the process actually works, in order.
Step 1: Pick a Name You Can Actually Use
Your LLC name has to be different from other businesses registered in Texas, and it needs to include “Limited Liability Company” or an abbreviation like LLC or L.L.C.
Before you fall in love with a name, search the Texas Comptroller’s tax entity database and the Secretary of State records to see if it is taken. Also check whether the matching domain name and social handles are free. One small catch: certain words are restricted, terms like “bank” or “university” need extra approval.
Step 2: Choose a Registered Agent
Every Texas LLC needs a registered agent, a person or company with a physical address in Texas who accepts legal mail on behalf of the business during normal business hours.
That can be you, if you live in Texas and do not mind your address becoming part of the public record. Many owners use a commercial registered agent service instead, which typically costs around $100 to $300 a year. For home-based businesses, that privacy alone is often worth it.
Step 3: File the Certificate of Formation
This is the big step in how to start an llc in texas step by step, because this document officially creates your LLC. It is called Form 205, the Certificate of Formation, and you file it with the Texas Secretary of State.
You can file online through SOSPortal, the Secretary of State’s current online filing system, or by mail. The state filing fee is $300. Online filings also carry a small card convenience fee, currently a flat $0.25 plus 2.25% of the amount.
On the form you will list:
- Your LLC’s name and registered agent information
- Whether the LLC is member-managed or manager-managed
- The business purpose, which can stay general
- The organizer, the person filing the paperwork
Processing is fairly quick. Online filings often come back approved in a few business days, while mailed filings take longer. Once approved, the state returns a stamp
ed copy and a certificate. Save those files somewhere safe; banks will ask for them.
Step 4: Create an Operating Agreement
Texas does not require you to file an operating agreement with the state, and a lot of single-owner LLCs skip it. That is a mistake.
This internal document spells out who owns what, how profits get split, and what happens if an owner leaves or the business closes. If you have a business partner, it is essential, handshake deals get fuzzy fast when money is involved. Even solo owners benefit, because the agreement helps show that the LLC is a real, separate business, which supports that liability separation you formed the LLC for in the first place.
Step 5: Get an EIN From the IRS
An EIN is like a Social Security number for your business. You will need one to open a business bank account, hire employees, and handle federal taxes.
Apply on the IRS website, it is free, and you usually get the number the same day. Be careful here: plenty of third-party sites charge for this. The IRS never does. If a site asks for $200 to get your EIN, close the tab.
Step 6: Open a Business Bank Account
Mixing personal and business money is one of the fastest ways to weaken the protection an LLC gives you. Open a separate account as soon as the LLC is formed.
Most Texas banks and credit unions will want your approved Certificate of Formation, your EIN letter, and a photo ID. While you are at it, get a business debit card and run every expense through the account from day one. Your future tax preparer will thank you.
Step 7: Handle Texas Taxes and Local Permits
Texas has no state income tax, but it does have a franchise tax. The good news is that most small LLCs owe nothing because of the no-tax-due threshold, which has risen in recent years, it was $2.47 million in total revenue for reports due in 2024 and 2025, and $2.65 million for 2026 and 2027.
Even if you owe zero, you still have an annual filing, generally due May 15: LLCs at or under the threshold now file just a Public Information Report (the old No Tax Due report was discontinued), while LLCs above it file a franchise tax report and a Public Information Report. Miss it and the state can eventually forfeit your LLC’s right to do business.
Depending on what you sell, you may also need a Texas sales tax permit from the Comptroller, which is free to apply for online. Then check your city and county rules, permits and zoning differ by trade and town, and a quick call to your city clerk’s office can save you a fine later.
How Much Does It Cost Overall?
Beyond the $300 state filing fee, a lean DIY setup might add almost nothing: free EIN, a basic operating agreement template, and a no-fee bank account. Add a registered agent service and you are looking at roughly $400 to $600 in your first year. Hiring an attorney or a formation service pushes it higher, but for a straightforward single-member LLC, most owners in Texas keep it on the lower end. And if costs matter most, follow how to start an llc in texas step by step with a DIY filing and skip the add-ons.
Follow these steps in order and how to start an llc in texas step by step stops feeling like a maze. Name it, file Form 205, set up the paperwork, separate the money, and stay on top of that May franchise tax deadline. Then you can get back to the part you actually started this for, running the business. Whenever you review how to start an llc in texas step by step, the same seven steps do the job.
Frequently Asked Questions
How long does it take to form a Texas LLC?
Online filings are often approved within a few business days. Mail filings can take a week or more. After that, getting an EIN online is usually same-day, so most people can be fully set up within about a week.
Do I need a business license for an LLC in Texas?
Texas has no general statewide business license. Whether you need permits depends on your industry and your city or county. Regulated fields like childcare, food service, and construction have their own requirements, so check locally before you start operating.
Can I be my own registered agent in Texas?
Yes, as long as you are a Texas resident with a physical street address in the state and are available during business hours. Just remember that address becomes public record, which is why many owners use a service instead.
Does a single-member LLC pay franchise tax in Texas?
It files the same way as other LLCs, but most small businesses owe nothing because their revenue falls under the no-tax-due threshold. You still need to file the annual report by May 15, for LLCs under the threshold, that is now just the Public Information Report, to stay in good standing.