Forming a limited liability company (LLC) comes with many benefits. An LLC combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship.
If you want to start a small business in Texas, then an LLC could be a great fit. Follow the steps below to form an LLC in Texas. For more on how to form an LLC in any state, see our article on how to start an LLC. You can also use our online LLC formation service to register your LLC.
Texas, like other states, has rules about what you can and can't name your LLC. Make sure you follow these rules when choosing a name for your business.
LLC name must be distinguishable. Your LLC's name must be distinguishable from the names of other business entities already on file with the Texas Secretary of State (SOS). In other words, your LLC can't have the same name as another business in Texas. (Tex. Bus. Org. Code § 5.053 (2024).)
You can check which names are already taken by searching the taxable entity database on the Texas Comptroller of Public Accounts (CPA) website. You can also use SOSDirect to search for businesses, assumed names, and trademarks that have been registered with the SOS.
LLC name must include an entity designator. Your LLC's name must include the phrase "limited liability company," "limited company," or an abbreviation of one of those two phrases. (Tex. Bus. Org. Code § 5.056 (2024).)
Name reservation. If you've picked a name for your business but aren't ready to register your LLC, you can reserve your business name for 120 days with the SOS. File an Application for Reservation or Renewal of Reservation of an Entity Name (Form 501) with the SOS to reserve your name. You can file the reservation online through SOSDirect or by mail. As of 2024, the filing fee is $40. (Tex. Bus. Org. Code §§ 5.101 and following (2024).)
Using an assumed name. A company can register one name on its certificate of formation with the SOS (known as its "legal name") and use a different name to do business. When an LLC uses a name that's different from its legal name, it's using an assumed name—also known as a "trade name," "DBA" (short for "doing business as"), or "fictitious business name." If your LLC uses an assumed name, you'll need to register it with the SOS. File an Assumed Name Certificate (Form 503) with the SOS to register your assumed name. You can register online through SOSDirect or by mail. As of 2024, the filing fee is $25. (Tex. Bus. & Com. Code §§ 71.101 and following (2024).)
You can find more answers on the SOS's name filings FAQ page.
Every Texas LLC must have an agent for service of process in the state—known as a "registered agent." A registered agent is an individual or business entity that agrees to accept legal papers on the LLC's behalf—for example, if someone sues the company. The agent can be a Texas resident or a business entity authorized to do business in Texas but can't be the LLC itself. The registered agent must have a physical street address in Texas. (Tex. Bus. Org. Code § 5.201 (2024).)
You can find information, including forms and answers to frequently asked questions, on the SOS's registered agents webpage.
You can create a Texas LLC by filing a Certificate of Formation (Form 205) with the SOS. The certificate must include:
(Tex. Bus. Org. Code § 3.005 (2023).)
You can file the certificate online through SOSDirect or by mail. As of 2024, the filing fee for a Certificate of Formation is $300.
An LLC operating agreement isn't required in Texas, but is strongly recommended. The operating agreement is an internal document that details the rules and procedures for how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed.
The agreement can also help preserve your limited liability by showing that your LLC is truly a separate business entity from the owners. Without an operating agreement, state LLC law will govern how your LLC operates.
The operating agreement should include the following:
For help creating an LLC operating agreement, you can use our online LLC formation service. Your LLC's operating agreement is a critical document and its terms will govern your LLC. If you need help crafting an LLC that will work best for you and your business partners, consider working with a local business attorney.
Other tax and regulatory requirements might apply to your LLC. For example, your LLC might need to obtain an EIN, apply for business licenses and permits, and register for business taxes.
EIN. If your LLC has more than one member, it must obtain a federal employer identification number (EIN), even if it has no employees. If you form a single-member LLC, you must obtain an EIN for your LLC only if either you elect to have your business taxed as a corporation instead of a sole proprietorship (disregarded entity) or your single-member LLC has employees. You can get an EIN by completing an online EIN application on the IRS website. There's no filing fee.
Business licenses. Depending on your LLC's business activities and location, your LLC might need to obtain local and state business licenses or permits. Visit your city's website for information about local licenses and permits. You can find licensing information for most professionals and occupations on the Texas Department of Licensing and Regulation website. For more detailed information, see our article on Texas business licenses.
Tax registration and filings. If you have employees or will be selling goods and collecting sales tax, you'll need to register with a Texas taxing authority. For example, if you collect sales tax, you must register with the CPA. For more information on Texas LLC tax registration, check out our article on Texas annual tax and LLC filing requirements.
Here are some other questions you might have about your Texas LLC.
If you're just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business.
To learn more about LLCs and decide if it's the right business structure for you, see our article on LLC basics.
Below are the fees (as of 2024) you might need to pay to form your LLC in Texas:
Note for veterans: If you're forming a 100% veteran-owned business, the SOS will waive the Certificate of Formation filing fee for qualifying veterans (honorable discharges only). For more information, visit the SOS's Business Information for Veterans page.
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but it will often cost you hundreds, if not thousands, of dollars in the process. If you'd like help completing all the filings, try our online LLC formation service.
To learn more about the costs associated with forming and running an LLC, see our article on how much it costs to form an LLC.
Kind of. Unlike most states, Texas doesn't require LLCs to file annual reports with the SOS. However, LLCs must file annual franchise tax reports. This report is called a "public information report." The details for computing the tax can be complicated. For more information, check the CPA annual reports webpage and our article on Texas LLC annual tax and filing requirements (see above).
If you're looking for additional help with your LLC's formation, the state government offers many free resources to help small business owners. Check out Texas Economic Development's start a business in Texas webpage for a step-by-step guide to business registration. This guide also provides links to other resources.
Apart from public information reports, your LLC will need to file and pay applicable taxes to the local, state, and federal governments. In addition, your LLC might need to obtain and periodically renew any required general or special business licenses or permits. You'll be responsible for keeping track of these maintenance requirements to keep your LLC in good standing and legally compliant.
Starting in 2024, all LLCs were previously required to submit a beneficial ownership information (BOI) report to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury. However, in March 2025, after some constitutional challenges, FinCEN revised the BOI reporting rule so that the requirement only applies to companies created outside the U.S. So, if you form your LLC within the U.S., then you no longer need to worry about the BOI reporting requirement.
You're not required to have an operating agreement in Texas but it's highly advantageous to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default.
The State of Texas doesn't require a general "business" license. However, some types of businesses require statewide licenses. For more information, download the Texas Business Licenses & Permits Guide.
Most Texas cities and counties don't require a local general business license but instead require licenses for specific types of businesses. Check with your city or county government website to determine your local requirements.
In addition to your local business license, you could need professional licenses, tax licenses or registrations, safety certifications, environmental permits, and building permits.
You can find extensive details about state and local regulatory requirements in our Texas business license article.
In some cases, yes. For example, if you'll be selling goods and collecting sales tax, you'll need to register with the Texas Comptroller of Public Accounts. (Texas also imposes an annual franchise tax on most LLCs.) Depending on the tax involved, you could be able to register online, by mail, or in person at a Comptroller field office.
Texas doesn't have a personal income tax. So if your LLC is a pass-through entity, the individual members won't need to worry about paying taxes on their share of the income. You also don't need to worry about withholding tax from employees. But you might be responsible for other business taxes.
See our article on Texas tax filing requirements for more details.
Yes. To do business in Texas, all LLCs organized outside of the state (called "foreign LLCs") must register with the SOS. Your foreign LLC must appoint a registered agent for service of process that's physically located in Texas.
To register your out-of-state business, file an Application for Registration of Foreign Limited Liability Company (Form 304). You can file the application online through SOSDirect or by postal mail. As of 2024, the filing fee is $750.
Before filing the application, make sure the LLC's name is available in Texas by checking the Texas business name database. If the name isn't available, the foreign LLC must adopt an assumed name for use in Texas by filing an assumed name certificate.
(Tex. Bus. Org. Code §§ 9.001 and following (2023).)
For more information on foreign LLC registration requirements, see the foreign or out-of-state entities page on the SOS website. You can also check out our guide to qualifying to do business outside your state for more information.
Yes. For most formation purposes, a Texas single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Texas are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see our article on how single-member LLCs pay federal income tax.
Yes. If you provide a licensed professional service in Texas and want to form an LLC, you can form a professional LLC (PLLC). Examples of providers of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain a Texas state license before practicing, then you provide a professional service. (Tex. Bus. Org. Code §§ 301.001 and following (2023).)
Read how to form a professional LLC in Texas for more on PLLC requirements and step-by-step instructions on how to form a PLLC in the Lone Star State.
If you reach the point where it's time to close your business and cease all operations, then you'll want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Your dissolution process will include obtaining tax clearance, filing a certificate of dissolution, settling debts, and distributing assets.
Read our article on dissolving a Texas LLC for an explanation of these steps.
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