Texas LLC Formation Guide
Everything you need to know to form your LLC in Texas, from requirements to timeline to ongoing compliance. Start your business the right way.
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1. Overview
Forming an LLC in Texas is one of the most business-friendly decisions you can make. With no state income tax, low formation costs, and strong asset protection laws, Texas offers an ideal environment for entrepreneurs and small businesses.
Why Texas?
- ✓ No state income tax on LLCs
- ✓ No annual report requirement
- ✓ Fast 5-7 day processing
- ✓ Strong business court system
2. Texas LLC Requirements
File Certificate of Formation with Texas Secretary of State
Pay $300 filing fee
Choose a unique LLC name
Designate a registered agent in Texas
Create an Operating Agreement (recommended)
Obtain required business licenses and permits
3. Step-by-Step Formation Process
Step 1: Choose Your LLC Name
Your LLC name must be unique and include "Limited Liability Company," "LLC," or "L.L.C."
Name Requirements:
- • Must be distinguishable from existing businesses
- • Cannot contain prohibited words without permission
- • Search availability at Texas SOS Business Search
Step 2: Designate a Registered Agent
Every Texas LLC must have a registered agent with a Texas address to receive legal documents.
Registered Agent Options:
- • Yourself (if you have a Texas address)
- • Professional registered agent service ($50-300/year)
- • Attorney or business associate in Texas
Step 3: File Certificate of Formation
Submit your Certificate of Formation to the Texas Secretary of State with the $300 filing fee.
Filing Options:
- • Online (fastest): 5-7 business days
- • Mail: 10-15 business days
- • In-person: Same day (if complete)
Required Information:
- • LLC name and address
- • Registered agent details
- • Organizer information
- • Management structure
Step 4: Create an Operating Agreement
While not required by Texas law, an Operating Agreement protects your business and clarifies ownership, management, and operating procedures.
Step 5: Obtain an EIN
Get an Employer Identification Number (EIN) from the IRS for tax purposes and to open a business bank account.
4. Timeline & Costs
Formation Timeline
Formation Costs
5. After Formation
Ongoing Requirements
- ✓ No annual report required
- ✓ No franchise tax for small LLCs (under $1.18M revenue)
- ⚠ Maintain registered agent
- ⚠ File federal tax returns
- ⚠ Obtain required business licenses
Recommended Next Steps
- • Open a business bank account
- • Get business insurance
- • Set up accounting system
- • Apply for business licenses and permits
- • Create business contracts and agreements
6. Benefits of Texas LLC
No state income tax on LLCs
No annual report fee
Strong asset protection laws
Business-friendly regulations
No franchise tax for small LLCs
Fast processing time (5-7 business days)
7. Texas vs Other States
Texas vs Delaware
- ✓ Texas has no state income tax (Delaware has 8.7%)
- ✓ Lower filing fees ($300 vs $90, but no annual fee vs $300)
- ✓ Better for operating businesses in Texas
Texas vs Nevada
- ✓ Similar tax benefits
- ✓ Texas has stronger business courts
- ✓ Lower total costs over time
Texas vs Wyoming
- ✓ Similar low-cost structure
- ✓ Texas better for businesses with customers in Texas
- ✓ More established business infrastructure
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