Texas LLC Cost In 2023: Listing, Alternatives, And Guides
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, the Texas LLC cost is however 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 how much it costs to get the LLC operating agreement filed and your business entity certified.
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 the 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.
How Much Does an LLC Cost in Texas?
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 at 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 all the operating agreements 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.
Most people will need the help of a lawyer to get their businesses incorporated. But 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 the 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. You do not need to pay anything for this in fact, filing is free of charge.
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5 Basic Steps to Start an LLC in Texas 2023
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
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The first step in your journey to own a business in the state of Texas 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 also 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. 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.
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 that specialize in the Texas LLC formation sector. If you need some help, you will get it very easily.
Frequently Asked Questions (FAQs)
The state of Texas will have your LLC ready in 4 -7 business days after the day of filing. This will however depend on whether the documents filed are accurate. You must also pay all the required state fees to ensure the approval is granted.
Texas law allows foreign entities to file for LLC formation. You will however need to fulfill certain legal obligations and besides, the fees for foreign LLC firms can be quite steep. Despite this, work with a legal consultant to ensure nothing is left to chance.
As long as you have an operating agreement and the state filing fee, you should be able to file for an LLC in the state of Texas. But if you are not sure about the documents needed, consult with the secretary of state office for more help.
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