Forming an LLC in Texas is one of the most popular choices for small business owners seeking liability protection with flexible management. Texas has no state income tax, straightforward $300 state filing fee, and a business-friendly environment. Follow these exact steps to form your Texas LLC correctly in 2026.
Official source: Texas Secretary of State (SOS) Certificate of Formation Form 205. Always verify current fees and forms on sos.state.tx.us before filing.
Texas LLC Formation: Step-by-Step Guide
1. Choose a Compliant Texas LLC Name
Your LLC name must be distinguishable from all existing Texas entities on file with the SOS and must include one of these designators: “Limited Liability Company”, “LLC”, “L.L.C.”, “Limited Company”, or “L.C.”
- Search availability instantly via the free Texas SOSDirect Business Search (or SOS name reservation tool). Full name search guide: Texas LLC Name Search & Availability.
- Do not use restricted words (bank, insurance, trust, college, etc.) without approval.
- Optional: File a name reservation ($40) to hold your name for 120 days while you prepare other docs.
- Also search county assumed name (DBA) databases if you plan to operate under a trade name.
Pro tip: Run both exact and similar-name searches. Texas SOS rejects names that are “deceptively similar.”
2. Appoint a Texas Registered Agent
Every Texas LLC must have a registered agent with a physical street address in Texas (no P.O. boxes) who is available during normal business hours to accept legal service of process and state notices.
- You (or a Texas resident member/manager) can serve for free.
- Commercial registered agent services ($125/yr typical) provide privacy, reliability, and compliance reminders.
- The agent’s name and Texas street address must appear on your Certificate of Formation.
See our full Texas Registered Agent Requirements guide and cost comparison. Or compare all best Texas LLC formation services.
3. File the Certificate of Formation (Form 205) – $300
This is the official formation document. File online via SOSDirect (fastest), by mail, or in person.
- Fee: $300 (plus ~2.7% convenience if paying by card online).
- Information required: LLC name, registered agent details, management structure (member or manager-managed), purpose (can be “any lawful purpose”), organizer signature.
- Processing: Online ~1-3 business days typical in 2026; mail longer.
- Download the current Form 205 PDF and instructions.
Veterans may qualify for fee waiver — check SOS veterans page.
4. Create an Internal Operating Agreement
Not filed with the state, but critical for multi-member LLCs and strong liability protection. It governs ownership percentages, voting, profit/loss allocation, buy-sell, and management.
Free templates exist; customize for your situation or have an attorney draft for $300–$1,500. Single-member LLCs still benefit from having one on file.
5. Obtain EIN, Bank Account, and Permits
- Get a free federal Employer Identification Number (EIN) instantly from IRS.gov — required for banking, hiring, taxes.
- Open a dedicated business bank account (most banks require the stamped Certificate of Formation or filed-stamped docs).
- Apply for Texas sales tax permit (if selling taxable goods/services) via Comptroller Webfile — free in most cases.
- Local city/county business licenses, occupational permits, or zoning — check your city clerk.
6. Handle Ongoing Texas Compliance (PIR + Franchise Tax)
Texas does not charge an annual report fee like Delaware or California. However, you must file annually with the Comptroller:
- Public Information Report (PIR) — Form 05-102 — updates owners/managers/registered agent. Due May 15 every year for almost all LLCs.
- Franchise Tax Report — most small LLCs (under ~$2.65M revenue) file “No Tax Due” or just the PIR combo. Check current thresholds.
Use our Franchise Tax Estimator and Compliance Checklist Generator.
Texas LLC Formation Costs (2026 Breakdown)
| Item | DIY Cost | With Service (typical) |
|---|---|---|
| Certificate of Formation (SOS) | $300 | $300 (included) |
| Name Reservation (optional) | $40 | $0–40 |
| Registered Agent (year 1) | $0 (self) | $0–$125 (often free yr 1) |
| Operating Agreement (template or attorney) | $0–$200 | $0–$300 |
| EIN + basic setup | $0 | $0–$99 |
| Total first-year typical range | $300–$550 | $300–$799 + state |
Prices vary by provider and add-ons (expedited, EIN service, compliance plans). Use our full pricing & cost calculator.
DIY vs Professional Formation Service
DIY works great if you are comfortable with forms and have time. Use a formation service (Northwest, Bizee, LegalZoom) when you want hand-holding, privacy via commercial agent, or bundled compliance for the first year.
Common Mistakes to Avoid When Forming a Texas LLC
- • Choosing a name that is too similar to an existing entity
- • Listing a PO Box or non-Texas address for registered agent
- • Skipping the operating agreement (especially multi-member)
- • Forgetting to file the annual Public Information Report (PIR)
- • Not searching county DBA/assumed name if using trade name
- • Using personal bank account instead of business account
After You Form: First 90 Days Checklist
Frequently Asked Questions — Forming an LLC in Texas
How much does it cost to form an LLC in Texas?
The state filing fee for the Certificate of Formation is $300. Total first-year costs typically range $300–$800 depending on whether you use a registered agent service and other add-ons.
How long does it take to form an LLC in Texas?
Online filings with SOSDirect are often approved in 1–10 business days in 2026. Mail filings take longer (weeks to months).
Can I be my own registered agent in Texas?
Yes, if you have a physical Texas street address where you (or an authorized person) are reliably available during business hours. Many owners prefer commercial services for privacy and reliability.
Do Texas LLCs need an annual report?
Texas does not have a traditional annual report fee. You must file a Public Information Report (PIR) every year (usually by May 15) along with any franchise tax report. Most small LLCs owe $0 tax but still file the PIR.
Is an operating agreement required for a Texas LLC?
Not filed with the state, but strongly recommended for liability protection and to avoid disputes, especially with multiple members.
Can a non-resident form an LLC in Texas?
Yes. Many out-of-state founders form Texas LLCs. You still need a Texas registered agent and must comply with Texas rules if you have Texas nexus.
Compare Formation Providers
We may earn a commission if you use these links. Estimates on Corporations TX are educational; partner pricing may differ.
Popular for registered agent
Northwest Registered Agent
Texas registered agent services, privacy-focused filings, and annual compliance support.
Budget-friendly packages
Bizee
Affordable LLC and incorporation packages with optional rush filing add-ons.
Brand recognition
LegalZoom
Well-known online legal platform for entity formation and ongoing business legal tools.
Get the Printable Version of This Checklist
Download the complete Texas LLC Formation Checklist as a PDF so you can follow along step-by-step offline.
Free Texas Business Formation Lead Magnet
Instant access. No credit card. We only send what we promise.
Ready to form your Texas LLC?
Get a free personalized checklist or let a partner formation service handle the paperwork for you.