Start an LLC in Texas

How to Start an LLC in Texas: A Step-by-Step Guide

Whether you already operate in Texas or plan to relocate your business there, the Lone Star State offers compelling advantages for entrepreneurs. Home to more than three million small businesses, Texas consistently ranks as one of the most business-friendly environments in the U.S. From local startups to international ventures, the state provides access to thriving national and global markets.

A Limited Liability Company (LLC) is a U.S. business entity that combines the flexibility of a partnership with the liability protection of a corporation. Essentially, an LLC is privately owned and managed by its members rather than shareholders, making it a preferred structure for many small business owners. Forming an LLC in Texas provides several benefits, including ease of setup, flexible management, favorable taxation, and personal asset protection. For a deeper comparison of business entities, see our comprehensive guide on starting an LLC.

If you've ever wondered how to register an LLC in Texas, this guide walks you through every essential step, cost, and state requirement so you can set up your business confidently.

Steps to Start an LLC in Texas

Launching an LLC in Texas might sound complex, but it's easier than you think. Follow these eight key steps.

Step 1: Choose a Name for Your Texas LLC

Your first task is to pick a unique and compliant name for your business. Texas law requires that your LLC's name be distinguishable from all other entities registered in the state. To confirm availability, you can perform a name search through the Texas Comptroller of Public Accounts or contact the Texas Secretary of State directly.

If you're not yet ready to register but want to secure the name, you can file a Name Reservation Application for $40. This reserves your chosen name for 120 days and can be renewed indefinitely.

• The name must contain Limited Liability Company, LLC, or L.L.C.
• It cannot duplicate or closely resemble another registered business name.
• Certain restricted words, such as bank, attorney, or credit union, may require additional approvals or licensing.
• Government-related terms, such as FBI or Treasury, are prohibited.

Step 2: Appoint a Registered Agent

Every Texas LLC must designate a Registered Agent, an individual or business authorized to receive legal and official documents on behalf of your company. The agent must maintain a physical address in Texas and be available during normal business hours.

This can be you, another member of your company, or a professional registered agent service. Note that your LLC itself cannot act as its own agent.

Step 3: File the Certificate of Formation

To officially create your LLC, you'll need to submit the Certificate of Formation, sometimes referred to as the Articles of Organization, to the Texas Secretary of State. You'll include details such as your LLC's name, purpose, business address, Registered Agent information, and management structure.

• Filing fee: $300 for domestic LLCs
• Foreign LLCs, those already registered in another state, must file an Application for Registration and pay a $750 fee.

Once approved, you'll receive a Certificate of Formation confirming your LLC's legal existence.

Step 4: Obtain Your Certificate of Formation

After submission, the state will review and process your filing. When approved, you'll receive an official certificate, proof that your LLC is now a recognized entity.

Processing times vary.

• Online filings: around 10–15 business days
• Expedited mail filings: 12–14 business days
• Standard mail filings: up to 70 business days

Once you have your certificate, you can apply for an EIN, open a business bank account, and obtain necessary permits or licenses.

Step 5: Draft an Operating Agreement

Although not legally required in Texas, an Operating Agreement is highly recommended. This internal document outlines each member's rights, responsibilities, profit shares, and operating procedures. Without one, your LLC will be governed by Texas default laws, which may not align with your preferred management style.

Step 6: Apply for an Employer Identification Number (EIN)

An EIN, or Employer Identification Number, is issued by the IRS and serves as your business's tax ID. It's required for tax filing, hiring employees, and opening financial accounts. You can apply for an EIN free of charge through the IRS online portal. It's also known as a Federal Tax ID or FEIN.

Step 7: File Your Franchise Tax and Annual Report

Unlike many states, Texas doesn't require a standard annual report, but LLCs must file a Franchise Tax Report and Public Information Report each year. These filings are due by May 15th, starting the year after your LLC's formation.

Correcting Filing Mistakes

If you discover an error in your LLC paperwork, you can fix it by submitting a Certificate of Correction along with a $15 filing fee. Mail it to the Texas Secretary of State, fax it, or hand-deliver it to their Austin office.

How Much Does It Cost to Start an LLC in Texas?

Here's a quick cost breakdown for forming your LLC.

• Business Name Reservation: $40
• Certificate of Formation (Domestic): $300
• Registration of Foreign LLC: $750
• Certificate of Correction: $15