How to Form an LLC in Texas — Step-by-Step Guide
Everything you need to file your Texas Certificate of Formation, meet the Comptroller's annual requirements, and stay in good standing — start to finish.
Updated 2026-08-15
Key Takeaways
- Forming an LLC in Texas means filing a Certificate of Formation (Form 205) with the Secretary of State for a $300 fee.
- Texas has no state personal income tax, and most small LLCs owe $0 in franchise tax under the No Tax Due threshold.
- Online filings through SOSDirect typically process the same business day — Texas doesn't charge extra for that speed.
- An operating agreement isn't legally required in Texas, but it's strongly recommended for asset protection and clarity between members.
- The Comptroller's annual Public Information Report (Form 05-102) is due May 15 every year, even if you owe $0 tax — it's the most commonly missed Texas requirement.
- CompanySage submits every Texas LLC filing to the state within 24 hours at no extra cost, with no rush fees.
Why Form an LLC in Texas
Texas consistently ranks among the most business-friendly states in the country, and its LLC framework reflects that. Forming a Texas LLC gives your business the same core benefits an LLC provides anywhere — personal liability protection separating your assets from business debts and lawsuits, pass-through taxation so profits are only taxed once on your personal return, and flexibility to structure ownership and management however you and your members agree.
What sets Texas apart is what it doesn't ask of you. There's no state personal income tax, no mandatory operating agreement filing, and no annual report requirement with the Secretary of State itself. Instead, most obligations run through the Texas Comptroller of Public Accounts, and for the large majority of small LLCs the annual franchise tax bill comes out to $0. Combined with a large economy, a growing population, and an online filing system built for speed, Texas is a practical home base for freelancers, e-commerce sellers, real estate investors, and service businesses alike.
How to Form an LLC in Texas: Step by Step
Search and reserve your LLC name
Your name must be distinguishable from every other entity on file with the Texas Secretary of State and include "Limited Liability Company," "LLC," or "L.L.C." Search the state's business name database before you file, and optionally reserve your name for 120 days using Form 501 (a modest filing fee applies) while you finish your paperwork.
Appoint a Texas registered agent
Every Texas LLC needs a registered agent with a physical Texas street address — P.O. boxes don't qualify — who's available during business hours to accept legal mail on the company's behalf. Many owners hire a professional service instead of using their own address to keep it off the public record. See our Texas registered agent guide for the specific requirements.
File your Certificate of Formation
File Form 205, the Certificate of Formation, with the Texas Secretary of State. It names your registered agent, principal office, and whether the LLC is member-managed or manager-managed. Filed online through the state's SOSDirect system, it typically processes the same business day — Texas doesn't have a separate paid expedite tier for online filings because standard processing is already fast.
Draft an operating agreement
Texas doesn't require an operating agreement by law, but skipping one leaves your LLC governed entirely by default state rules. A written agreement spells out ownership percentages, voting rights, and what happens if a member leaves — and most banks want to see one before opening a business account. Read our operating agreement guide for what to include.
Get an EIN from the IRS
An Employer Identification Number is free from the IRS and required for multi-member LLCs, LLCs with employees, and most business bank accounts. See our EIN walkthrough for the application steps.
Register for state taxes and local licenses
If you'll sell taxable goods or services, register for a Texas sales and use tax permit with the Comptroller. Texas has no statewide general business license, but many cities and counties require local permits, and certain professions need a state license through the Texas Department of Licensing and Regulation.
File your annual Public Information Report
Every Texas LLC files a Public Information Report with the Comptroller by May 15 each year, along with a franchise tax return — even when the tax owed is $0. This is where most Texas LLC owners fall behind, since it's a separate filing from anything the Secretary of State handles.
What It Costs to Form and Run a Texas LLC
Texas keeps state-level fees relatively low compared to many other states. Here's what you're likely to encounter, as of our last review:
| Item | Texas Fee | Notes |
|---|---|---|
| Certificate of Formation (Form 205) | $300 | One-time; filed with the Secretary of State, same-day online via SOSDirect |
| Name reservation (Form 501, optional) | $40 | Holds your name for 120 days before filing |
| Registered agent service | Included from $14.99/mo | Bundled into CompanySage's Standard Compliance plan with annual report filing and mail scans |
| Assumed Name Certificate (DBA) | $10–$35 | Filed at the county clerk's office, not with the state |
| Public Information Report (Form 05-102) | $0 | Due annually May 15 with the Comptroller, regardless of tax owed |
| Foreign LLC registration (Form 304) | $750 | For out-of-state LLCs registering to do business in Texas |
A "free" formation offer is never actually free once you count the state's own charges. Before any service fee, Texas itself collects $300 upfront for the Certificate of Formation. Add a registered agent and an operating agreement, and most complete Texas LLC setups land in the $400–$500 range. CompanySage's Starter package begins at $99 plus state fees, with formation documents, an operating agreement, and a bank-account resolution included — no hidden line items.
Timeline and Faster Filing Options
Texas is already one of the quickest states to file in. Submit your Certificate of Formation online through SOSDirect and it typically processes the same business day, as of our last review; mail filings run five to seven business days. Because online processing is already fast, Texas doesn't charge a separate expedite fee for it the way some other states do.
CompanySage adds its own layer of speed on top of that: we prepare and submit every Texas formation to the state within 24 hours of your order, standard on every plan, with no rush fees. See our same-day filing guide for exactly how that timeline breaks down and what's outside our control once your paperwork reaches the state.
Staying Compliant After You Form Your Texas LLC
Forming your LLC is the beginning of your compliance calendar, not the end of it. Two obligations land every year:
- Public Information Report (Form 05-102): due May 15 with the Texas Comptroller, required even if you owe $0 in tax.
- Franchise tax return: also due May 15; most small LLCs under the No Tax Due threshold (roughly $2.47 million in revenue, as of our last review) owe $0, while LLCs above it pay 0.375% or 0.75% on taxable margin depending on business type.
Missing the May 15 deadline
A late Public Information Report or franchise tax filing triggers a penalty — as of our last review, around 5% of tax due, rising if it stays unresolved — plus interest, and continued non-compliance can put your LLC's good standing with the state at risk.
Keeping your registered agent current matters too. If your agent becomes unreachable or moves without an update on file, Texas can involuntarily terminate your LLC after a notice-and-cure period — 91 days, as of our last review — under the state's business organizations code. Reinstatement is usually available, but waiting too long can cost you your original formation date. If you sell taxable goods or services, add periodic sales tax filings with the Comptroller to your calendar as well.
CompanySage's compliance plans start at $14.99 a month and bundle registered agent service with annual report filing (state fee only) and mail scanning, so these dates don't rely on you remembering them. See our pricing page for the full plan breakdown, or start with our general LLC formation guide if you're still comparing states — Texas is often weighed against other no-income-tax states like Wyoming and Nevada.
Frequently Asked Questions
How much does it cost to form an LLC in Texas?
Filing the Certificate of Formation (Form 205) with the Texas Secretary of State costs $300, as of our last review. Once you add a registered agent and an EIN, most new Texas LLCs land in the $300–$500 range before any formation-service fee. CompanySage's Starter package starts at $99 plus that state filing fee, with no hidden add-ons.
How long does it take to form an LLC in Texas?
Texas is one of the fastest states to file in: Certificates of Formation submitted online through SOSDirect typically process the same business day, as of our last review, while paper filings by mail can take five to seven business days. CompanySage submits every formation to the state within 24 hours of your order at no extra cost — no rush fees, ever.
Does Texas require an LLC operating agreement?
No. Texas does not legally require an operating agreement (Tex. Bus. Orgs. Code § 101.052), but it's strongly recommended. Without one, your LLC defaults to state law, which may not reflect how you actually want ownership, voting, or profit splits to work — and most banks ask to see one before opening a business account.
Do Texas LLCs have to pay franchise tax?
Most small Texas LLCs owe $0 in state franchise tax. As of our last review, the No Tax Due threshold sits around $2.47 million in annual revenue; LLCs above that pay 0.375% (wholesale/retail) or 0.75% (standard) on taxable margin. Texas has no state personal income tax, so this margin tax is the main state-level tax an LLC needs to track.
Does Texas require an annual report for LLCs?
Not with the Secretary of State — but every Texas LLC must file a Public Information Report (Form 05-102) with the Texas Comptroller of Public Accounts by May 15 each year, as of our last review, even when no franchise tax is owed. It's easy to miss because it's a Comptroller filing, not an SOS filing, so your LLC can look fine with the state while quietly falling behind on this one.
Can I be my own registered agent in Texas?
Yes, if you have a physical Texas street address (not a P.O. box) and can be reliably available there during business hours to accept legal mail. Many owners use a professional registered agent instead to keep a home address off the public Secretary of State record and to make sure nothing is missed while they're out of the office.
What happens if my Texas LLC doesn't maintain a registered agent?
The Secretary of State can involuntarily terminate your LLC after a notice-and-cure period, which as of our last review runs 91 days under Tex. Bus. Orgs. Code § 11.251. You can typically reinstate afterward, but the entity is only treated as never having lost its status if reinstatement happens within a set window (around three years) — after that, you may lose your original formation date and name priority.
Keep reading
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