How to Start an LLC in Texas

Last updated on 05 Apr 2025

How to Form an LLC in Texas | Complete Guide

A Step-by-Step Guide

How to Form an LLC in Texas

Forming a Limited Liability Company (LLC) in Texas is an excellent method of securing your personal assets and establishing a legal business entity. This complete guide will take you through each step to successfully create your LLC in Texas and share some useful information regarding the process.

What is an LLC?

Limited Liability Protection

An LLC (Limited Liability Company) is a type of business entity that gives personal liability protection to its owners (known as members). That is, your home or vehicle assets are usually shielded from any debt of the business or business law suits.

Tax Advantages

LLCs also get pass-through taxation, meaning profits get taxed only once on the personal tax return of the members.

Management Flexibility

Texas LLCs provide flexibility in management structure, allowing you to choose between member-managed or manager-managed operations to suit your business needs.

Formation Process

Select a Non-Copy Business Name for Your LLC

Your first step to creating your LLC in Texas is naming it. Your business name should be distinct and not already taken by another company in the state. Search name availability using the Texas Secretary of State's online name search tool.

Required Words: Your LLC name will need to contain "Limited Liability Company," or an abbreviation such as "LLC," "L.L.C.," "Ltd.," "Company," or "Co."
Prohibited Words: The name will not contain words such as "Agency," "Commission," "Bureau," "Board," or "Department," which could suggest connection to government agencies.
Name Restrictions: The name will not be close to any government agency, including "FBI" or "State Department."
Domain Name: To avoid potential future problems, it's a good idea to verify the availability of your business domain name early, even if you don't intend to establish a website immediately.

Select Your Texas Registered Agent

Every LLC in Texas is required to have a registered agent. The registered agent receives official documents, tax forms, legal notices, and communications from the state on behalf of your business.

Agent Options

This individual can be you, another owner of your LLC, or a professional registered agent service. If you use a professional service, ensure they have a Texas street address and are willing to accept documents during regular business hours.

Professional Services

Below are a couple of highly-rated registered agent services for Texas LLCs:

Best Texas Registered Agent Services

ZenBusiness

ZenBusiness offers LLC formation and registered agent services, beginning at $0 plus state fees. It includes worry-free compliance and lifetime support for plus state fees.

TailorBrands

TailorBrands provides LLC formation services in addition to a variety of branding tools, including logo design and website design. It also provides registered agent services for a separate price of $199/year.

LegalZoom

LegalZoom is a reputable company that offers LLC formation, legal services, and business support, including licensed attorney support. It's ideal for businesses that need legal expertise.

File Your Certificate of Formation with the State

The last step in creating your LLC in Texas is to file the Certificate of Formation (Form 205) with the Secretary of State of Texas. It can be filed either online using the website of the Texas Secretary of State or by mail.

Filing Fee

The filing fee for the Certificate of Formation is $300.

Processing Times

Online submissions generally take 5-7 business days. Mailed filings could take longer to process. The process can be expedited as well for extra cost.

Filing Options

Online Filing: File through the online system of the Secretary of State.
Mail Filing: Send the completed form and payment to the Texas Secretary of State.

Mail Filing Address:

Secretary of State
P.O. Box 13697
Austin, TX 78711-3697

Once your Certificate of Formation is approved, your LLC will be officially registered with the state.

Next Steps After Your LLC Is Formed

After successfully forming your LLC, it's essential to handle a few other important tasks to ensure your business runs smoothly:

Separate Personal and Business Finances

It's crucial to keep your personal finances separate from your LLC's finances. This means opening a business bank account and credit card to ensure your personal assets are protected in the event of a lawsuit.

Hire an Accountant

An accountant can help with tax planning, payroll, and managing finances. They ensure that you're compliant with tax laws and avoid any costly mistakes.

Obtain an EIN

You will require an Employer Identification Number (EIN) if your LLC will have employees or if you intend to have a business bank account. The IRS issues EINs at no cost.

Consider Business Insurance

Even the smallest of businesses ought to consider business insurance. It can cover your business against potential risks, such as property loss, employee harm, or lawsuits. You may also want to consider workers' compensation insurance if you hire employees.

FAQs

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

The filing cost for an LLC in Texas is $300. This is what it costs to file the Certificate of Formation with the Texas Secretary of State.

Does a "Doing Business As" (DBA) name need to be used in Texas?

No, the majority of Texas LLCs do not require a DBA unless you want to conduct your business under another name than which you registered. If you'd like to do business under a different name for your business, you can register for a DBA (which is also called an assumed name) with the state.

How long does it take to process my Certificate of Formation?

Online submissions generally take 5-7 business days. Mailed filings could take longer to process. The process can be expedited as well for extra cost.

Can I create an LLC in Texas even if I'm not a Texas resident?

Yes, you can create an LLC in Texas without being a Texas resident. All you need to do is provide an official resident with a registered agent whose office address must be within the state so they can accept documents sent to you formally.

Do I have to use an Operating Agreement in my Texas LLC?

Texas does not mandate that an LLC have an operating agreement, but it is very much advised. An operating agreement sets out the roles and duties of LLC members and can avoid conflicts in the future.

Can I modify my LLC name after registration?

Yes, you can amend your LLC name by filing an amendment to your Certificate of Formation with the Texas Secretary of State. This has a fee.

Are Texas LLCs required to have annual reports?

No, Texas does not require LLCs to file annual reports. However, you should make sure your registered agent information is current, and you should remain compliant with any state taxes required.

Ready to Start Your Texas LLC?

Starting your LLC in Texas is a relatively simple process. By following these steps and using the resources available, you'll be well on your way to successfully launching your business. Just remember to stay compliant with state regulations, keep personal and business finances separate, and seek professional assistance as needed to ensure smooth operations.

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