Texas law requires that all folks who want to start an LLC with the state file officially. This is not free of course. The state fees for filing must be paid as well. Now, however, the Texas LLC cost is not standard. Although state fees as reported by the Texas secretary of state will often remain fixed, there are so many other charges that you must account for. Remember forming an LLC in Texas with a business bank account may require the help of a Texas registered agent service. This will lead to more costs, especially for a foreign LLC. In this post, you are going to learn about LLC costs in Texas to get the LLC operating agreement filed and your business in Texas entity certified.

LLC Cost In Texas: How Much Is This?

As noted above, the only thing you have to pay to the Texas comptroller is the state filing fee. For now, this fee stands at $300. It is set by the office of the secretary of state pursuant to existing state laws. However, please note that the Texas business registration process takes more than just the filing fee. 

For example, if you are a foreign LLC, you may need additional services like additional liability protection, an employer identification number, and even a registered agent service to help you pay federal income tax. All these costs will be crucial if you want to get your certificate of formation faster. 

As a rule of thumb, it is not advisable to register an LLC without an LLC’s registered agent in Texas. You may end up making mistakes that cost you down the road, especially when you start filing the annual franchise tax reports. So, while the base fee is $300, it may cost you a bit extra to have a smooth experience.

Texas LLC Filing Fee

The Texas secretary of state charges $300 for any business owner who wants to get an LLC in the state. The fee is for a Texas resident only. Please also note that you are obliged to pay a 2.7% convenience fee. This is not included in the $300 Texas filing fees. If you are not sure about what to do, get some professional service and good legal or tax advice.

Texas Annual Report Fee

According to the legal documents on the website of the Texas Secretary of State, the cost to file an annual report stands at $200 right now. The $200 fee is also charged per general partner. This does not include the state filing fees or the annual franchise tax report.

Registered Agent Fee

LLC owners who need a registered agent service will need to pay a $15 fee to the county clerk. The fee is however not the same for a Texas foreign LLC. Please note that the $15 simply allows filing a consent for a registered agent. However, in case it’s a nonprofit organization or a cooperative, the fee drops to just $5. Registered agent services can be quite helpful when you file federal tax and business licenses.

Cost To Form A Foreign LLC In Texas

In case you are thinking of getting a foreign limited liability company in Texas, the final Texas cost will be much higher. According to data from the secretary of state, the fee right now stands at $750. You may also need a law firm to help you especially if you intend to hire employees in the future. 

The law firm will deal with the Texas LLC operating agreement and your physical street address. It will ensure you get the right business structure for federal taxes too. In the end, it will be much easier to get the Texas certificate.

Other LLC Filing Costs

There are also other costs for an individual or business entity that wants to conduct business as other Texas LLCs. The following is a breakdown of some of these fees.

LLC Name Reservation Fee

Texas offers some very flexible name reservation regulations for any S corporation or LLC that wants to file in the state. However, you will be required to pay a small $40 fee to reserve the name. All requests must be filed within the right business hours to ensure they are processed fast.

“Doing Business As” (DBA) Name

If you want to separate a business entity from a personal business, you can file a ‘Doing Business As’ (DBA) name in the state. For every name certificate issued, the Texas Secretary of State will charge you a fee of around $25. Also, for every DBA name abandoned, the state will impose a $10 fee too.

Business Domain Name & Website

LLC formation is not just about filing articles of incorporation. Although this is important, there are still other business-related services that you may need including a business domain name and website. 

Now, this one will be done either by your registered agent or by the law firm helping you. The costs will differ greatly depending on the hosting service you are using. But it will largely be around $10 – $30 per year.

Articles Of Organization Fee

The articles of the organization are filed as part of the initial LLC filing. This, therefore, means that the $300 fee will be enough for this. While some states may charge extra for these articles, in Texas once you pay the $300 you are good to go.

Attorney Fees

Most people will need the help of a lawyer to get their businesses incorporated. However, the attorney fees are not standard. It will often depend on the lawyer you are using, their experience, and where you are filing. However, on average most people will pay around $900 for attorney fees. This money is paid directly to the lawyer and not the Texas comptroller’s office.

Tax ID Number (EIN)

Once you get your Texas LLC name, it will come with a Tax ID number.^[1] You do not need to pay anything for this in fact, filing is free of charge. 

Why Should You Form An LLC In Texas?

Anyone is free to form an LLC in whatever state they want. But Texas has some unique advantages. But despite this, it is important to highlight why people actually form LLCs in the first place. The main reason why you want your business entity to have an LLC business structure is to protect your personal assets from the liabilities of that business. 

But if you choose to form an LLC in Texas, you may also qualify for additional tax benefits as well. Also, you can use your own registered agent to get the process done. The rules and regulations set out by the Texas Secretary of State and the filing fee are all easily manageable. 

Texas also offers flexible ownership for any limited liability company and you will also be able to get a business name approved in no time. It is also one of the fastest states in the US to get your business incorporated.

5 Basic Steps To Start An LLC In Texas 2024

Most people will often use a licensed professional service to incorporate an LLC in Texas. But if you want to do this on your own, there are some steps you must take. Here are five of the main ones:

Name Your Texas LLC

The first step in your journey to start a Texas LLC is to actually come up with a name for it. Now, a name search must be done to ensure that there is no other similar business name in that given state.

It may also be a good idea to be as creative as possible with the business name. Remember at the end of the day, people will identify your services or products based on the name of the company. It is therefore important to take extra care just to be sure you get this right. Do not forget that the name will be included in the domain as well.

Choose Your Registered Agent

It is also advisable to get a registered agent address to ensure you have all the professional help you can get as you file for your Texas LLC. The registered agent will help you navigate through the whole filing process in the state. They will also give advice on how business entities in Texas are created.

File Articles Of Organization

Once the name and the registered agent are in, it is time to file the articles of organization. This is often the penultimate process in this whole experience. The agreement simply outlines the managerial structure of the business and its shareholding. It must be up-to-date information to ensure the process goes on smoothly.

Prepare An Operating Agreement

Your LLC formation agent will also help you craft an operating agreement that states how the LLC will work. In most cases, the state will require that you follow a certain template. The registered agent will of course have this template and will also help you fill everything as correctly as possible. 

Obtaining An EIN

The final step is to obtain an employer identification number.^[2] This is actually offered free of charge but it’s a very important document. You will need it to file the Texas franchise tax in applicable cases and other important tasks. The best way to approach this is to apply for the EIN as you are applying for the LLC formation service.

Top 2 LLC Services In Texas

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Name	ZenBusiness	Northwest Registered Agent
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ZenBusiness

ZenBusiness offers many of the same services as Northwest, but they also provide after-hours customer support and ongoing assistance with things like taxes and accounting. If you hire ZenBusiness to help you out with resident agent support, they’ll start your LLC for free.

Northwest Registered Agent

Northwest regularly receives excellent reviews from customers and provides a wide variety of business services at affordable prices. Whether you want support with starting your LLC or you want a resident agent from a professional provider, they can give you the services and resources you need to run your company more effectively.

Alternative Business Structures In Texas

There are several alternative business structures in Texas; some of them are:

• Sole proprietorship:  A sole proprietorship involves only one owner who assumes complete control over the operation of the business. While independence reigns supreme in such scenarios, lone decision-making may lead to challenges when faced with tough choices.
• Partnership: A partnership, however, brings together two or more individuals who co-own and manage a business, benefitting from shared expertise and diverse perspectives. Success hinges on effective communication and well-defined roles.
• Corporation: The corporation form offers both C-Corporations and S-Corporations, each is governed by unique tax considerations but is commonly characterized by limited liability protections afforded to shareholders due to their recognition as distinct legal entities.
• Non-profit organizations: The non-profit organizations prioritize philanthropic pursuits, attaining tax exemptions, and adhering to particular regulatory requirements.
• Joint Venture: Joint ventures constitute temporary associations between two or more entities seeking to achieve specific objectives without any formal commitment. Collaborators must judiciously assess compatibility and clarify expectations from the outset, ensuring mutual success.
• Professional associations: professional associations pool professionals from similar disciplines to furnish services while maintaining limited liability protections for their members. Each type of organization holds opportunities and potential drawbacks, mandating careful evaluation before selecting the optimal path forward.

Final Thoughts

Texas is one of the most business-friendly states in the US. If you are looking for a certificate of formation here, then you are in for a great experience. The cost of filing can however be steep for foreign entities that want to enter to Texas business community. But for locals, it is way cheaper. 

Over the years, the state of Texas has also streamlined LLC formation to make it as easy as possible for companies to get a certificate of formation. You are even allowed to use your own registered agent to smoothen the process further. 

This will allow you to get the LLC as soon as possible. Finally, you will be happy to know that there are so many legal and business experts who specialize in the Texas LLC formation sector. If you need some help, you will get it very easily.

Frequently Asked Questions (FAQs)