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LLC in Texas: Formation, Taxes, and Ongoing Compliance
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If you are setting up a Texas LLC, you have a few decisions to make before you file anything with the state. You need to settle on a name the Secretary of State will accept, then decide who will serve as the registered agent to receive legal papers on the company's behalf.
The company name and the agent both go on the Certificate of Formation, which is filed with the state to create your LLC. Afterward you set up whichever tax accounts your business needs and file a Public Information Report, which is due to the Texas Comptroller by May 15 of the following year and every year after that.
Below are the costs for setting up an LLC in Texas, the filings in the order you make them, and what the state does if the May 15 deadline passes.
At a Glance
- To form a Texas LLC, you file Form 205 with the Secretary of State and pay $300.
- Your LLC must keep a registered agent in Texas at all times.
- The Secretary of State requires no annual report from Texas LLCs. Starting the year after you form, you file a Public Information Report (PIR) with the Texas Comptroller by May 15 each year, even when you owe no tax.
- Texas has no general state business license, though your city, county or industry may require a permit.
- LLCs with annualized total revenue at or below $2,650,000 owe no franchise tax on 2026 and 2027 reports.
Cost of Starting an LLC in Texas
The $300 formation fee is the one state charge on this list that every Texas LLC pays as part of the formation process. The rest depend on your business and how fast you want the filing back.
| Item | State fee | When it applies |
|---|---|---|
| Certificate of Formation (Form 205) | State fee: $300 | When it applies: Every new LLC |
| Name reservation (Form 501) | State fee: $40 | When it applies: Optional |
| Assumed name certificate (Form 503) | State fee: $25 | When it applies: If you use a DBA |
| Standard expedited filing | State fee: $50 | When it applies: Optional |
| Next-day expedited filing | State fee: $500 | When it applies: Optional, in person in Austin |
| Same-day expedited filing | State fee: $750 | When it applies: Optional, in person in Austin |
| Employer Identification Number (EIN) | State fee: $0 | When it applies: Free from the IRS |
| Sales and use tax permit | State fee: $0 | When it applies: If you sell taxable items, a bond may apply |
| Franchise tax | State fee: $0 | When it applies: At or under the $2,650,000 threshold |
| Public Information Report | State fee: $0 | When it applies: Every year |
If you pay by credit card on SOSPortal, you'll pay $0.25 per transaction plus 2.25% in processing fees, according to the Secretary of State's filing and payment options page. SOSPortal also accepts ACH payments.
How to Form an LLC in Texas
Choose and Check Your LLC Name
Your LLC's name has to include "limited liability company" or "limited company," or an abbreviation of either one, under Section 5.056 of the Texas Business Organizations Code. It also has to be distinguishable from other names in the Secretary of State's records.
| Name Search: | Texas Secretary of State - Corporations Section Name search |
| Name Reservation: | Optional |
| Suffix: | The name of a limited liability company or a foreign limited liability company doing business in this state must contain: (1)the phrase "limited liability company" or "limited company"; or (2) an abbreviation of one of those phrases. |
You can run a preliminary check by calling the Secretary of State at (512) 463-5555 or by sending an email to CorpInfo@sos.texas.gov, but the name is not official until your filing is processed. If you're not ready to file yet, you can reserve an LLC name for 120 days by filing Form 501 with a $40 fee.
Appoint a Texas Registered Agent
Under Section 5.201 of the Business Organizations Code, you name a registered agent in Texas when you form the LLC and keep one in place continuously after that. The registered agent identifies your company’s contact person for legal documents and notices.
Your agent can be a Texas resident or an organization registered to do business in Texas. You can also name yourself: the Secretary of State's registered agent FAQs say an officer, owner or employee may serve.
The registered office must be a Texas street address where someone can hand the agent legal papers in person; a mailbox service alone doesn't qualify.
When you name an agent on Form 205, you're confirming that the agent agreed to serve, so keep a record of that consent. If you'd like a professional agent, Harbor Compliance can serve as your registered agent through our registered agent service. We receive legal notices for your LLC and forward them to you.
File Your Certificate of Formation (Form 205)
You can submit your Certificate of Formation, Form 205, online through SOSPortal or on paper by mail or in person in Austin. SOSPortal replaced SOSDirect on September 29, 2026, so older instructions that mention SOSDirect are out of date.
On Form 205, you say whether your LLC initially has managers. If it does, you list them. If it doesn't, you list the initial members, who run the company themselves. In a member-managed LLC, every member has management authority, so any owner can sign a contract and bind the company. In a manager-managed LLC, the members appoint managers to run it, and a manager does not have to be an owner.
The filing fee is $300. If you want the filing back sooner, expedited service costs an extra $50 per document and typically takes two to three business days. Next-day service costs $500 per document and same-day service costs $750, for filings the Secretary of State receives in person in Austin by noon.
| Agency: | Texas Secretary of State - Corporations Section |
| Form: | Form 205: Certificate of Formation for a Limited Liability Company |
| Filing Method: | Mail, in-person, or online. |
| Agency Fee: | $300 |
| Turnaround: | ~3-5 business days by mail or fax. |
| Law: | Texas Statues - Business Organizations Code - Title 3: Limited Liability Companies |
| Notes: |
|
Write a Company Agreement
In Texas, an LLC operating agreement is called a company agreement. Section 101.052 of the Business Organizations Code governs the relationship between members and managers, as well as the LLC's internal affairs. You don’t file the company agreement, just keep it with your company records.
A company agreement is the owners’ own rulebook for how the business runs internally. Texas recognizes a written, oral, or implied agreement, and a company with a single member can have one, though only a written agreement is valid if a bank, a buyer, or a court asks. Anything the agreement leaves out, the Business Organizations Code decides instead.
Hold the Organizational Meeting
The first meeting of the members of the LLC is the organizational meeting. You will need your filed articles of organization and your operating agreement in order to conduct this meeting. Keep minutes of this meeting and store them in your company record book.
Get Your EIN and Texas Tax Accounts
An Employer Identification Number (EIN) is the federal tax ID the IRS assigns to your LLC. You can apply with the IRS online and get the number immediately. There's never a fee.
| Agency: | United States Internal Revenue Service (IRS) |
| Form: | |
| Instructions: | Applying for an EIN without a SSN/TIN:
|
| Filing Method: | Mail, phone, fax, or online. |
| IRS fee: | $0 |
| Turnaround: | Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail. |
| Notes: | The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, see IRS Pub 1635: Understanding Your EIN. |
If your LLC sells or leases tangible goods in Texas or sells taxable services, you need a Texas sales tax permit. Online applications take about two to three weeks. It's free unless the Comptroller has reason to believe that a tax due is likely to become delinquent, in which case it may require a security bond.
Once your LLC pays $1,500 in gross wages in a calendar quarter or has an employee during 20 different weeks in a year, it has 10 days to register with the Texas Workforce Commission. You also report each new hire to the Attorney General's Child Support Division within 20 days.
Check Whether You Need a Business License
Texas has no general state business license. The Governor's Business Permit Office says the certificate of formation you receive from the Secretary of State serves the role a general business license plays in other states.
Specific activities still need their own permits, but the license usually comes from an agency other than the Secretary of State. The Texas Department of Licensing and Regulation covers most licensed trades, among them:
- Electricians
- Air conditioning and refrigeration contractors
- Barbers and cosmetologists, including salons and schools
- Massage therapists
- Tow truck operators and vehicle storage facilities
- Driver education and safety schools
- Mold assessors and remediators
- Water well drillers and pump installers
- Auctioneers
- Residential solar retailers
Some trades answer to a board of their own instead. Plumbers are licensed by the Texas State Board of Plumbing Examiners, so check which agency covers your work before you apply anywhere.
Your city and county might have requirements of their own on top of the state's. The Business Permit Office does not keep track of local rules, so contact the local city and county offices directly.
The state's 2026-2027 Texas Business Licenses and Permits Guide lists which state-level license applies to which business activity. Harbor Compliance researches, files and renews those licenses through our business licensing service.
File an Assumed Name Certificate If You Use An Alternate Company Name
A DBA ("doing business as") is a name your LLC uses in place of its legal name. To use one, you file an assumed name certificate (Form 503) with the Secretary of State for $25. There's no separate county filing.
Each certificate lasts up to 10 years. To keep using the name, you file a new certificate before the current one expires. Harbor Compliance can file and renew it for you through our DBA filing service.
How Your New LLC Is Taxed
By default, the IRS treats a single-member LLC as a disregarded entity, meaning the LLC isn't separate from its owner for federal income tax. A multi-member LLC is taxed as a partnership by default. You can file Form 8832 to be taxed as a corporation, or Form 2553 to make an S corporation election.
Texas has no state income tax. LLCs are subject to the Texas franchise tax instead, a yearly state tax the Comptroller collects from taxable entities. Single-member LLCs are taxable entities, too.
For reports due in 2026 and 2027, an LLC with annualized total revenue of $2,650,000 or less owes no franchise tax, according to the Comptroller's franchise tax page. That figure is the no-tax-due threshold. Above it, the standard rate is 0.75%, and retail and wholesale businesses pay 0.375%.
You don't have to file a beneficial ownership information report for a Texas LLC. FinCEN exempted U.S. companies from BOI reporting in March 2025 and made the exemption permanent with a final rule issued August 11, 2026.
Your First Public Information Report
The Secretary of State doesn't require LLCs to file an annual report, according to its formation FAQs. You'll still see this filing called the Texas annual report; the Comptroller's name for it is the Public Information Report, Form 05-102.
Your first PIR is due May 15 of the year after your LLC becomes subject to the franchise tax. An LLC that became subject to the tax during 2025 had its first report due May 15, 2026, according to the Comptroller's franchise tax reports FAQ.
The PIR is due every year after that, even when your LLC owes no franchise tax, under the Comptroller's PIR filing requirements. So an LLC that earned nothing in its first year still files a PIR by May 15 of the following year. If your LLC's revenue is above the no-tax-due threshold, you file a franchise tax report as well.
If you want to have this filing handled for you, we can prepare and file your PIR each year through our annual report service.
What Happens If Your LLC Misses A Filing Deadline
If you miss a filing deadline, you may be subject to a penalty fee. The Comptroller charges a $50 penalty on a franchise tax report filed after the due date, even when no tax is due with it. If you owe tax and pay late, the Comptroller adds a 5% penalty the day after the due date and a second 5% on the 31st day, according to its penalty waiver FAQ.
A late PIR carries no fine, but leaving it unfiled can cost your LLC its standing. The Comptroller can forfeit your LLC's right to transact business in Texas after at least 45 days' notice, whether or not the LLC owes any tax. A forfeited LLC generally can't sue or defend itself in a Texas court, and its members and officers may be held personally liable for certain LLC debts.
Getting back to good standing means filing every overdue report and paying what's owed, then requesting a tax clearance letter and filing with the Secretary of State. Our guide to reinstating a Texas LLC walks through each step.
Changing Your LLC After Formation
Changes to what's on your Certificate of Formation are filed with the Secretary of State. A certificate of amendment (Form 424) costs $150, and changing your registered agent with Form 401 costs $15.
Keep Your Texas LLC in Good Standing With Harbor Compliance
Keeping your LLC in good standing means maintaining a registered agent in Texas and filing your Public Information Report with the Comptroller by May 15 each year.
Work with our team, and we'll serve as your registered agent and file your Public Information Report each year, so neither one slips while you're running the business.
Assumed name certificate - The Form 503 filing for a name your LLC uses in place of its legal name.
Certificate of formation - Form 205, the filing that creates a Texas LLC.
Company agreement - The Texas term for an LLC operating agreement.
Franchise tax - The yearly Texas tax on LLCs, reported to the Comptroller.
No-tax-due threshold - The revenue level at or below which an LLC owes no franchise tax.
Public Information Report - Form 05-102, filed with the Comptroller every year.
Registered agent - The Texas-based person or organization that accepts legal papers for your LLC.
SOSPortal - The Secretary of State's online filing system.
Frequently Asked Questions
The state fee to start an LLC in Texas is $300 for the Certificate of Formation (Form 205). Optional costs include $40 to reserve a name and $50 or more to expedite. An assumed name certificate for a DBA costs $25.
Yes, Texas requires every LLC to name a registered agent and keep one in place continuously. The agent can be a Texas resident or an organization registered to do business in Texas, with a Texas street address. You can name yourself; what your LLC can't do is act as its own agent.
For 2026 and 2027 reports, the no-tax-due threshold is $2,650,000 in annualized total revenue. An LLC at or below that amount owes no franchise tax, but it still files a Public Information Report with the Comptroller by May 15.
The Texas Secretary of State doesn't publish a standard processing time for non-expedited LLC formations. The $50 standard expedited service typically takes two to three business days. Next-day ($500) and same-day ($750) service are available for filings received in person by noon.
A late PIR carries no $50 penalty, but an LLC that leaves it unfiled can lose its right to transact business in Texas. The $50 late-filing penalty applies to a franchise tax report, which your LLC files only if its revenue is above the no-tax-due threshold.
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