Table of Contents
Texas ranks second in the nation for new business formations, trailing only California in total business registrations. The Lone Star State attracts entrepreneurs with its business-friendly environment, no personal income tax, no corporate income tax for LLCs, minimal regulatory burden, and a thriving economy supporting businesses across all industries.
Every year, over 100,000 new LLCs register with the Texas Secretary of State through SOSDirect, the state's online filing system. Technology startups in Austin, oil and gas companies in Houston, ranching operations in West Texas, and retail businesses in Dallas all choose Texas LLC structures for the same reasons—liability protection, tax advantages, and operational flexibility. This comprehensive guide on how to start an LLC in Texas covers step-by-step instructions for forming your LLC in Texas, from choosing a name and filing formation documents to understanding ongoing compliance requirements and Texas LLC formation services.
What is a Texas LLC?
A Texas Limited Liability Company (LLC) is a business entity formed under Texas state law that separates the owners' personal assets from business liabilities. LLC members (owners) are not personally responsible for the company's debts or legal obligations beyond their investment in the company. Understanding how to start an LLC in Texas begins with choosing the right structure for your business goals.
Step 1: Choose a unique LLC name
Texas requires your LLC name to be distinguishable from all other business entities registered with the Texas Secretary of State.
Texas LLC naming requirements
Your LLC name must include one of the following:
- Limited Liability Company
- Limited Company
- LLC
- L.L.C.
- LC
- L.C.
Example acceptable names: Lone Star Ventures LLC, Austin Tech Limited Liability Company, Dallas Consulting L.L.C.
Your LLC name cannot include words suggesting the business is a bank, insurance company, trust company, or other regulated entity without proper licensing. Restricted words include "bank," "trust," "insurance," and "university."
Search Texas LLC name availability
Before filing your Certificate of Formation, search the Texas Secretary of State database at sos.state.tx.us/corp/sosda/index.shtml to confirm your desired name is available.
If you're not ready to file your Certificate of Formation immediately but want to secure your LLC name, you can reserve it for 120 days by filing a Name Reservation Application through SOSDirect. The reservation fee is $40.
Name reservation is optional—most people skip this step and file their Certificate of Formation immediately once they've confirmed name availability.
Step 2: Appoint a Texas registered agent
Every Texas LLC must designate a registered agent with a physical street address in Texas. The registered agent receives service of process, legal notices, tax documents, and official correspondence on behalf of your LLC.
Registered agent requirements
Your registered agent must:
- Have a physical street address in Texas (not a P.O. box)
- Be available during normal business hours to accept documents
- Be either an individual who is a Texas resident or a business entity authorized to do business in Texas
- Provide written consent to act as your registered agent
You can serve as your own registered agent if you have a physical Texas address and are available during business hours. Most LLC owners use themselves or hire professional Texas LLC formation services that include registered agent support.
Registered agent costs
Professional registered agent services charge $50-$150 annually. Many LLC formation services include the first year of registered agent service free. You must list your registered agent's name and Texas address on your Certificate of Formation. You cannot file without designating a registered agent.
Step 3: File the Certificate of Formation
The Certificate of Formation is the legal document that creates your Texas LLC. It's filed with the Texas Secretary of State through SOSDirect or by mail using Form 205.
The Texas Certificate of Formation (Form 205) is more detailed than many other states' formation documents, requiring specific governance information upfront. Understanding each article ensures accurate filing and helps you avoid the $300 refiling fee for rejected documents.
Article 1: Entity Name and Type
Enter your LLC's complete legal name with one of the required designators: "Limited Liability Company," "Limited Company," "LLC," "L.L.C.," "LC," or "L.C.". The name must be distinguishable from all existing entities registered with the Texas Secretary of State.
Article 2: Registered Agent and Registered Office
Select either Option A (organizational registered agent) or Option B (individual registered agent). Your LLC cannot serve as its own registered agent. Provide the registered agent's physical street address in Texas—P.O. boxes are not permitted.
Article 3: Governing Authority
This is Texas's most unique requirement—you must declare your management structure upfront and list specific managers or members with their addresses.??
Select Option A if your LLC is manager-managed, then list each initial manager's name and address. Select Option B if your LLC is member-managed, then list each initial member's name and address. You must list at least one governing person.??
For individuals, use: First Name, Middle Name, Last Name, and Suffix (Jr., Sr., III only—not professional titles like Dr. or CPA).?
Article 4: Purpose
Form 205 includes pre-filled general purpose language: "The purpose for which the company is formed is for the transaction of any and all lawful purposes for which a limited liability company may be organized under the Texas Business Organizations Code".?
Pro-tip: Leave the general purpose language as-is unless you're forming a professional LLC (lawyers, doctors, CPAs) or need specific tax-exempt status. For professional services, use Form 206 (Professional LLC) instead of Form 205
Mailing Address
Provide the mailing address where the Texas Comptroller should send franchise tax correspondence and state tax documents. This can be a P.O. box, street address, or your registered agent's address.?
Supplemental Provisions/Information (Optional)
This section allows you to add custom provisions such as specific LLC duration periods, dissolution triggers, or special governance rules. Most filers leave this entirely blank.?
Pro-tip: Unless you specifically need a limited-duration LLC (which dissolves automatically after a set period), leave this section completely blank. Anything included here becomes public record and requires filing an amendment with fees to change.
Organizer Execution (Signature)
The organizer—the person forming the LLC—must provide their name, address, and signature. The organizer can be anyone 18 or older, including members, managers, attorneys, or formation services. No Texas residency is required.
Effectiveness of Filing
Select one of three options for when your LLC officially begins existence:?
Option A: Effective immediately when the Secretary of State processes your filing (most common)
Option B: Delayed effective date up to 90 days from signing date?
Option C: Effectiveness contingent on a future event or fact (requires follow-up filing within 90 days confirming the event occurred)?
Pro-tip: If you're filing in late December but don't want to trigger current-year tax obligations, select Option B with a January 1 effective date. This delays your LLC's existence until the new year and pushes your first Texas Franchise Tax Report back by one full year, reducing immediate compliance burdens
Texas LLC filing fee
The Texas Secretary of State charges $300 to file the Certificate of Formation. This is a one-time fee paid when you form your LLC.
If you file online through SOSDirect, add approximately 2.7% credit card processing fee—bringing the total to approximately $308. Mail filings accept checks or money orders for exactly $300.
Expedited processing options
Texas offers expedited processing for an additional fee:
- 24-hour processing: Add $25 ($325 total)
- Same-day processing: Add $100 ($400 total)
Standard processing takes 10-12 business days for online filings and 2-3 weeks for mail filings.
When is your LLC officially formed?
Your LLC exists as a legal entity on the effective date shown on your filed Certificate of Formation. The Texas Secretary of State will process your filing and send confirmation showing your file number and effective date.
Step 4: Create an LLC Operating Agreement
An Operating Agreement is the internal document that governs how your LLC operates.
Is an Operating Agreement required in Texas?
No—Texas law does not require LLCs to have an Operating Agreement. Section 101.052 of the Texas Business Organizations Code explicitly states that Operating Agreements are not required.
However, creating a written Operating Agreement is strongly recommended even though it's not legally mandated. Without an Operating Agreement, the default provisions of the Texas Business Organizations Code govern your LLC—and these default rules may not align with your intentions.
What does an Operating Agreement include?
Your Operating Agreement should address:
- LLC member names and ownership percentages
- Initial capital contributions from each member
- Profit and loss allocation among members
- Management structure (member-managed or manager-managed)
- Voting rights and decision-making procedures
- Member meeting requirements (if any—Texas doesn't mandate meetings)
- Procedures for adding or removing members
- Transfer restrictions on membership interests
- Dissolution procedures
Single-member LLCs benefit from Operating Agreements too—they demonstrate the LLC is separate from the owner, protecting limited liability status if challenged in court.
Do you file the Operating Agreement with Texas?
No—you do not file your Operating Agreement with the Texas Secretary of State. The Operating Agreement is an internal document kept with your LLC records.
Banks and lenders typically require a copy of your Operating Agreement when opening business bank accounts or applying for financing.
Step 5: Obtain an Employer Identification Number (EIN)
An Employer Identification Number (EIN) is a federal tax identification number issued by the IRS. It functions like a Social Security number for your LLC.
Does your Texas LLC need an EIN?
Most Texas LLCs need an EIN. You need an EIN to:
- Open a business bank account
- Hire employees
- File federal tax returns
- File Texas Franchise Tax Reports
- Apply for business licenses
- Establish business credit
Single-member LLCs with no employees can use the owner's Social Security number instead of an EIN for federal tax purposes—but most still obtain an EIN to separate personal and business finances and protect privacy.
How to apply for an EIN
Apply for an EIN online at irs.gov. The application takes 10-15 minutes and you receive your EIN immediately upon completion.
The IRS does not charge any fee for EIN applications. Be wary of third-party services charging $50-$200 to obtain an EIN—you can do it yourself free.
Can you get an EIN without a Social Security number?
Yes—you can legally form a Texas LLC and obtain an EIN from the IRS even if you don't have a US Social Security number or Individual Taxpayer Identification Number (ITIN).
The person applying online for the EIN must have a valid US taxpayer identification number. If you don't have one, you can mail Form SS-4 to the IRS instead of applying online.
Step 6: File Beneficial Ownership Information (BOI) Report
The Corporate Transparency Act requires most Texas LLCs to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN), disclosing individuals who own 25% or more of the LLC or exercise substantial control.
BOI filing deadlines
LLCs formed in 2025 or later must file within 30 days of formation. If you form your Texas LLC in February 2026, your BOI report is due within 30 days of your Certificate of Formation approval date.
Who is exempt from BOI reporting?
Most small businesses and startups must file. Common exemptions include large operating companies with 20+ full-time US employees, $5+ million in gross receipts, banks, SEC-registered entities, and certain inactive entities.
BOI penalties: $591 per day
Failure to file carries civil penalties up to $591 per day with no cap, plus criminal penalties up to $10,000 and two years imprisonment. Missing your deadline by just 30 days could result in penalties exceeding $17,700.
How to file
File free at boiefiling.fincen.gov. You'll need each beneficial owner's full legal name, date of birth, residential address, and a copy of their driver's license or passport.
You must update your BOI report within 30 days of any ownership changes, address changes, or name changes.
Step 7: Obtain business licenses and permits
Texas does not issue a general "business license" at the state level. However, your LLC may need specific licenses or permits depending on your industry and location.
State licenses: Professional services (real estate, contracting, cosmetology, accounting, healthcare) require Texas state professional licenses from agencies like the Texas Department of Licensing and Regulation or Texas State Board of Public Accountancy.
Sales tax permit: If your LLC sells tangible personal property or certain taxable services in Texas, you must register with the Texas Comptroller for sales tax collection. Registration is free but required before making taxable sales.
Local licenses: Texas cities and counties may require local business licenses, permits, or registration. Requirements vary significantly by location—Houston has different requirements than Austin or Dallas.
Industry-specific permits: Food service, alcohol sales, healthcare, childcare, and other regulated industries require permits from Texas Department of State Health Services, Texas Alcoholic Beverage Commission, or other state agencies.
Federal licenses: Certain industries (firearms, alcohol distribution, transportation, agriculture) require federal licenses from agencies like ATF, DOT, or USDA.
Research licensing requirements for your specific industry and locations where you'll conduct business. The Governor's Business Permit Office provides guidance at gov.texas.gov/business.
Foreign qualification: Operating in other states
If your Texas LLC conducts business in states other than Texas, you must foreign qualify in those states.
What is foreign qualification?
Foreign qualification (also called "registering as a foreign LLC") is the process of registering your Texas LLC with another state's Secretary of State to legally conduct business there.
You're generally required to foreign qualify if your LLC:
- Maintains a physical office or storefront in another state
- Hires employees in another state
- Owns real estate in another state
- Regularly conducts in-person business activities in another state
Simply selling products online to customers in other states or attending occasional trade shows does not typically require foreign qualification.
How to foreign qualify your Texas LLC
To foreign qualify in another state, you typically must:
- Obtain a Certificate of Good Standing from Texas proving your LLC is active and compliant
- File a foreign qualification application with the other state's Secretary of State
- Pay the other state's filing fee (varies by state, typically $100-$750)
- Appoint a registered agent in the other state
- Pay annual fees and file annual reports in the other state
Each state has different foreign qualification requirements, fees, and annual compliance obligations.
Registering a foreign LLC in Texas
If you formed an LLC in another state and want to conduct business in Texas, you must register as a foreign LLC by filing Form 304 (Application for Registration) with the Texas Secretary of State. Understanding the process of registering a foreign LLC in Texas is essential if your out-of-state business operates in the Lone Star State.
The foreign qualification fee is $750, significantly higher than the $300 domestic LLC formation fee.
Foreign LLCs that conduct business in Texas without proper registration face penalties of $750 for every year (or partial year) operating without registration. Penalties begin accumulating after 90 days of doing business without registration.
How NSKT Global can help with your Texas LLC formation and compliance
NSKT Global specializes in how to start an LLC in Texas, providing comprehensive Texas LLC formation services including entity formation, compliance, and tax optimization for businesses of all sizes. Our LLC formation services include complete entity formation from name availability search through EIN application, Texas registered agent service with a physical address in your preferred Texas location, customized Operating Agreement drafting tailored to your ownership structure and management preferences, Franchise Tax and Public Information Report filing, and foreign qualification coordination in states where you operate or register a foreign LLC in Texas.
Contact NSKT Global today for expert guidance on how to register an LLC in Texas and comprehensive LLC formation services to keep your business compliant and thriving.
Frequently Asked Questions
How much does it cost to register an LLC in Texas?
The cost to register an LLC in Texas is $300 for the Certificate of Formation filing fee. If you file online through SOSDirect, add approximately 2.7% credit card processing fee ($308 total). Additional costs include optional name reservation ($40), professional registered agent service ($50-$150 annually), expedited processing ($25-$100), and Operating Agreement preparation. Many businesses use Texas LLC formation services that bundle these services for $400-$600 total.
How do I register my LLC in Texas by myself?
To start an LLC in Texas yourself, choose a unique business name with "LLC" or "Limited Liability Company," search name availability at sos.state.tx.us, appoint a Texas registered agent, file Form 205 (Certificate of Formation) through SOSDirect for $300, create an Operating Agreement, obtain an EIN from the IRS, and file required BOI reports. The entire process takes 10-12 business days for standard processing or 1-2 days with expedited filing.
What do I need to know to register a foreign LLC in Texas?
Registering a foreign LLC in Texas requires filing Form 304 (Application for Registration) with the Texas Secretary of State and paying a $750 filing fee. You must provide a Certificate of Good Standing from your LLC's formation state, appoint a Texas registered agent, and list your LLC's governing persons. Failure to complete registration within 90 days of doing business results in $750 annual penalties. Foreign LLCs must also file annual Public Information Reports.
Does your Texas LLC need an EIN?
Yes, most Texas LLCs need an EIN (Employer Identification Number) from the IRS. You need an EIN to open business bank accounts, hire employees, file federal and Texas franchise tax returns, apply for business licenses, and establish business credit.
What are the ongoing compliance requirements for a Texas LLC?
Texas LLCs must file an annual Public Information Report and Franchise Tax Report by May 15 each year, maintain a Texas registered agent continuously, file BOI reports with FinCEN within 30 days of ownership changes, renew required business licenses and permits, and file sales tax returns if collecting Texas sales tax. Using Texas LLC formation services can help automate compliance reminders and reduce the risk of penalties for missed deadlines.
