How To Start An LLC In Texas: A Step-By-Step Guide (May. 2026)

In Texas, starting a Limited Liability Company (LLC) is uncomplicated. Plus, it’s a process that legally protects your personal assets.

That said, business owners can benefit from separating their personal and business liabilities due to this setup. They can also stay flexible with management and taxes through this arrangement.

In this guide, I’ll take you step by step through the process of how to start an LLC in Texas.

How To Start An LLC In Texas

To establish your LLC in Texas, it’s important to know about certain essential requirements. This will allow you to stay compliant with state laws.

If you’re wondering how to start an LLC in Texas for free, I’ll also share some practical tips to minimize your costs throughout this guide.

Below is a list of the steps you will need to go through to form your LLC:

1. Selecting A Name For Your Texas LLC

Picking a name for your business is your first move toward starting your LLC.

In terms of selection criteria, the name has to be original and not already exist in the Texas Secretary of State records.

To verify if a name is available, you can look through the Texas Comptroller’s Taxable Entity Search tool.

Additionally, your LLC name has to satisfy the state’s naming regulations. This comprises using “LLC” or “Limited Liability Company” in the name.

Do you want to know more about Texas naming rules? If so, I recommend reading my guide: Texas LLC Business Name.

2. Nominating A Registered Agent For Your Texas LLC

The next step involves selecting a Registered Agent for your LLC.

The following entities can fulfill the role of a Registered Agent:

• You.
• A friend.
• A commercial Registered Agent.

If you decide to nominate a friend to be your Registered Agent, you will need their consent before applying. Their consent can be given in writing or electronically.

If you submit the application without their consent, there can be consequences. These include liabilities and penalties under the Texas Business Organizations Code (BOC) § 4.007 and 4.008.

This obligation is ruled by BOC § 5.207.

The consent form doesn’t need to be submitted to the Secretary of State. However, it should be kept with your Texas LLC’s internal records.

Your Registered Agent must have a physical street address in Texas. This is essential to allow service of process (Legal documents) to be personally delivered during regular business hours.

The registered office doesn’t have to be your company’s main business location. That being said, it still cannot be a mailbox or a telephone answering service.

Something else worth noting is that your Registered Agent’s name and address will be visible on public records.

Knowing this, it might be worth employing a commercial Registered Agent if you want to protect your privacy. This way, you will be using their address instead of yours or a friend’s.

If you want the cheapest way to start an LLC in Texas, you can list yourself as the Registered Agent instead of paying for a commercial service.

To help you decide, I wrote a guide on the Best Registered Agents In Texas.

3. Submit The Certificate Of Formation

To create your LLC in Texas, you need to submit Form 205, which is the Certificate of Formation for Texas. This is one of the main Texas LLC filing requirements.

Once filed with the Texas Secretary of State, this document officially establishes your LLC.

To file Form 205, you can do so in one of the following ways:

• By mail: Send the filled-out form to the Corporations Section at the James Earl Rudder Office Building.
• Online: Submit the completed form through SOSUpload or file directly via SOSDirect.

The filing fee for the Texas Certificate of Formation is $300, regardless of whether you file by mail or online.

However, processing times vary depending on the filing method you use. Below are some time estimates for each method:

• By mail: 4 to 8 weeks (Plus mailing time).
• Online through SOSDirect: 10 to 12 business days.
• Online through SOSUpload: 13 to 15 business days.

For more detailed instructions, read my comprehensive article: Texas LLC Certificate Of Formation.

4. Produce An Operating Agreement For Your Texas LLC

An Operating Agreement is an essential legal document that defines how your LLC is structured, managed, and operated.

Even though the State of Texas doesn’t legally require one, it’s highly recommended for every LLC. The same advice also applies to single-member entities.

Certain banks will ask for an Operating Agreement when you open a business bank account for your Texas LLC.

Plus, this document provides valuable protection if your business ever faces legal disputes. This is because it helps prove your LLC is properly organized and functions as a separate legal entity.

The Operating Agreement is an internal document. This means it doesn’t need to be filed with the State of Texas or the Internal Revenue Service (IRS). Even so, you should hold on to a signed copy stored with your company’s official business records.

Below, you will be able to download a free template of an Operating Agreement.

Once you have downloaded it, your next step will be to write the Operating Agreement for your Texas LLC. For guidance on this topic, read my article: Texas LLC Operating Agreement.

5. Obtain An EIN For Your Texas LLC

An Employer Identification Number (EIN) is a distinct nine-digit number provided by the Internal Revenue Service (IRS). It allows your business to be recognized for tax and financial purposes.

After your LLC is approved, the only way to get an EIN is through the Texas Secretary of State.

This identification number is sometimes referred to as a Federal Tax ID Number or a Federal Employer Identification Number (FEIN). All of these have the same meaning.

Your EIN serves several important goals, including:

• Setting up a business bank account.
• Submitting and paying federal and state taxes.
• Taking on employees and managing payroll.
• Requesting business licenses and permits.

For a more explanation on this topic, check out my article: How To Get An EIN For A Texas LLC.

The good news is that the IRS does not charge any fees for providing an EIN.

Here are the options available to apply for an EIN:

• Online: You can use this option if you possess a Social Security Number (SSN) or a Taxpayer Identification Number (TIN). It’s also available if you are a U.S. citizen. To apply using this method, follow the procedure in this guide: How To Apply EIN Online.
• By mail with Form SS-4: You can apply by mail if you don’t have a SSN or a TIN. This is also the option you should use if you’re not a U.S. citizen. To obtain an EIN by mail, follow these guidelines: How To Apply For An EIN With Form SS-4.

As for the time it takes to get your EIN approved, it will vary depending on the filing method:

• Online: You can get your EIN in approximately 15 minutes.
• By mail or fax: You will obtain your EIN within 4 weeks (This includes mailing time).

After approval of your application, you will get an EIN Confirmation Letter (Form CP 575) from the IRS.

6. Secure Texas Business Licenses And Permits

The State of Texas does not make it mandatory for LLCs to obtain a general state business license.

That being said, you may need to obtain a local business license from your city or county or an industry-specific permit. This will depend on your location and the type of business you operate.

For more information about these requirements, read my detailed guide: Texas Business Licenses.

The Next Steps After The Approval Of Your Texas LLC

To keep your LLC operating smoothly and compliant with the State of Texas, you’ll need to complete additional steps. These include the following:

1. Set Up A Business Bank Account

Opening a business bank account is essential for keeping your personal and business finances separate.

This separation helps protect your personal assets from potential business debts and liabilities.

Plus, having a dedicated business account reinforces your LLC’s limited liability protection and helps preserve the corporate veil.

Another benefit of this separation is that it makes bookkeeping and accounting easier. This is because it keeps your income and expenses clearly organized.

Finally, maintaining a business account guarantees accurate financial records. This is something crucial for both tax reporting and legal compliance.

2. Fill Out The Texas Franchise Tax Questionnaire

The Texas Franchise Tax Questionnaire is an online form used to gather details about your company’s operations.

Completing this questionnaire is required in order to obtain your XT number. You will need this number when filing Texas Franchise Tax Returns, if those apply to your LLC.

Usually, new Texas LLCs get a notice from the Comptroller’s Office within a few weeks after formation. This document contains instructions on how to complete the questionnaire.

3. Submit The Texas Franchise Tax Return (If Applicable)

The Texas Franchise Tax is a privilege tax applied to every taxable entity that is formed, registered, or conducting business within Texas.

Your LLC is only required to pay this tax if it earns over $2.47 million in annual revenue.

If your business makes less than $2.47 million per year, you’re exempt from filing a Franchise Tax Return.

It costs $0 to lodge the Franchise Tax Return.

If you do need to file the annual Franchise Tax Report, it will be due on May 15th of each year. If that date lands on a weekend or legal holiday, the deadline automatically moves to the next business day.

Keep in mind that the $2.47 million “no-tax-due” threshold can vary yearly. Therefore, it’s important for LLC owners to confirm the current amount on the Texas Comptroller’s official website before filing.

4. File The Public Information Report

Every Texas LLC is required to file a Public Information Report (PIR) annually, no matter the income level.

This report must be submitted along with your Texas Franchise Tax Return and is due each year on May 15. If the deadline falls on a weekend or public holiday, it automatically shifts to the next business day.

Your LLC’s first Annual Report is due the year following its formation. For example, if your LLC was approved on April 15, 2026, your first report will be due on May 15, 2027.

You can submit your Public Information Report using one of the following methods:

• Online: Use the WebFile (Recommended).
• By mail: Send Form 05-102 to the Texas Comptroller of Public Accounts.

Once again, the fee is $0 for this filing.

You can submit the Franchise Tax Report and the Public Information Report together using WebFile. This will allow for quicker processing.

For more information on this topic, I recommend reading my article: Texas Franchise Tax
Public Information Report (PIR).

5. Record And Pay Taxes

At baseline, the IRS taxes an LLC based on how many owners it has.

Therefore, a Single-Member LLC is taxed as a Sole Proprietorship, whereas a Multi-Member LLC is taxed as a Partnership.

You can also decide to have your LLC taxed as a C-Corporation or S-Corporation if that is more suitable.

In Texas, married couples have the option to classify their LLC as a Single-Member LLC, known as a Qualified Joint Venture. This is available because the state follows community property laws.

Beyond federal taxes, your LLC may also owe state and local taxes, such as sales tax, depending on your business activities.

Read more: Texas Free LLC For Veterans.

Frequently Asked Questions