What is a Texas LLC?
A Texas LLC is an essential business structure that offers legal protection for your assets and access to tax benefits. LLC means limited liability company, allowing members to separate personal and business assets without forming a corporation (and paying corporate taxes). Creating an LLC in Texas will allow you to conduct business legally.
The phrase “Everything is Bigger in Texas” holds true for Limited Liability Companies (LLC) seeking business opportunities in the Lone Star State.
Flexible membership regulations and minimal record requirements make Texas one of the best states to form an LLC. And as one of the biggest states by population and land mass, you’ll have access to substantial real estate and labor markets.
Setting up an LLC in Texas is simple. We’ll show you how to start an LLC in Texas in 8 easy-to-follow steps.
Let’s get started:
How to Start an LLC in Texas
Whether you’re a local Texan or an out-of-state resident, forming an LLC in Texas is a relatively quick and low-cost process.
However, before you can display your “Open for Business” sign, you need to complete these eight steps:
- Choose a name for your Texas LLC
- Select your LLC members
- Decide on a management structure
- Assign a Texas registered agent
- Create a Texas LLC Operating Agreement (Optional)
- File Your Certificate of Formation
- Register for an Employer Identification Number (EIN)
- Obtain the necessary Texas business licenses, permits, and tax information
1. Choose a name for your Texas LLC
The first step in starting an LLC in Texas is selecting a company name.
Unfortunately, it’s not as simple as choosing a memorable and attractive name. Your business title needs to comply with the following regulations:
- Include either the phrase “Limited Liability Company,” “Limited Company,” or an abbreviation of one of those phrases, as stated in Tex. BOC §5.056(2), such as:
- “LLC” or “L.L.C”
- “LC” or “L.C.”
- Ltd. Company
- Ltd. Liability Co.
- Ltd. Liability Company
- Be distinguishable from the name of other businesses registered in the state of Texas.
- Not include words or phrases suggesting false implications of government affiliation. For example, “Commission”, “Secretary of State”, or “State Department”.
- It can’t contain or consist of grossly offensive language.
You’ll need to perform a Texas LLC search to check the availability of your prospective business name. You can use the Taxable Entity Search, email [email protected], or contact the State Information Business Line at (512) 463-5555.
For a detailed account of all naming regulations, consult the Entity Names Guide provided by the Office of the Secretary of State.
2. Select your LLC members
The next step in setting up an LLC in Texas is to declare the name(s) of the member(s). According to Section 101.101 of the Texas Business Organizations Code, a limited liability company can have one or more members.
If you’re forming a single-member Texas LLC, you’ll only need to submit one member name — your own. If your LLC has more than one member, also known as a multi-member LLC, you’ll need to contact all members joining your organization.
3. Decide on a management structure
You must report the governing authority of your Texas LLC, also known as management structure, on your Certificate of Formation.
The governing authority of your Texas LLC will manage the business and affairs of the company as stated in the company agreement.
4. Assign a Texas registered agent
According to Tex. BOC § 5.201, you’re required to designate and maintain a registered office and registered agent for your Texas LLC.
Your registered agent must be either a resident of Texas or an organization registered or authorized to conduct business in Texas.
The filling entity cannot also act as the registered agent. However, you may appoint a company member as the registered agent.
To serve as a registered agent, the individual or entity must accept an appointment and consent to their role in a written or electronic form. The completed document must not be filed with the state but should be kept with your LLC records.
Although your registered office isn’t required to be your organization’s principal place of business, it must be a street address where your registered agent can accept legal forms during regular business hours.
A registered agent is responsible for accepting legal documentation — processes, notices, or demands — required or permitted by law on behalf of your LLC.
5. Create a Texas LLC Operating Agreement (optional)
An operating agreement is an internal company document outlining ownership and company procedures. Creating an operating agreement protects members from potential disputes by defining roles, decision-making processes, and internal profit distributions.
Here is our Texas LLC Operating Agreement, you can use our builder for an easy process or you can download our free blank template and fill it out yourself.
6. File your Certificate of Formation
To register your LLC in Texas, you must file a Certificate of Formation with the Secretary of State (Tex. BOC § 3.001).
As stated in Tex. BOC § 3.005, a Certificate of Formation must include the following information:
- Name of your business
- Type of entity being formed
- Name of the registered agent
- Address of the registered office
- Governing authority of your LLC (member-managed or manager-managed)
- Lawful purpose(s) for which your LLC is being formed
- Name and address of the organizer
- Effectiveness of filing (when the document will become effective)
- Signature of the organizer
- Date of signature
If required, there is a designated space for supplemental provisions or information on your Certificate of Formation.
- Mail: Secretary of State P.O. Box 13697 Austin, Texas 78711
- Hand (In-person): James Earl Rudder Office Building 1019 Brazos Austin, Texas 78701
- Fax: to (512) 463-5701
You’ll need to pay a non-refundable $300 fee to file your LLC in Texas.
7. Register for an Employer Identification Number (EIN)
You must obtain an Employer Identification Number (EIN) if your LLC has more than one member — even if it has no registered employees.
Also referred to as a Federal Tax Identification Number, an EIN is used by the IRS for taxation and business identification purposes.
Think of an EIN as a Social Security Number for your business — it’s required to:
- Open a company bank account
- Register for taxes
- Hire employees and process payroll
Don’t apply for an EIN number until your Texas LLC application has been approved by the Secretary of State. After receiving approval, submit an online application form or send a completed SS-4 Form to the IRS via fax or mail — no fees are necessary.
8. Obtain necessary Texas business licenses, permits, and tax information
The formation of your Texas LLC isn’t complete until it’s legally ready to operate.
Texas does not have a general, state-level business license requirement. However, your Texas LLC must follow relevant federal, state, municipal, and industry-specific permit and license requirements.
Consult the following resources to find out which permits and licenses your Texas LLC may require:
- The U.S. Small Business Administration has provided a list of needed federal licenses and permits by industry
- The Texas Department of Licensing and Regulations website
- The Texas Commission on Environmental Quality’s list of permits, licenses, registrations, and other authorizations and industry-specific permits by rule
- The professional licenses listed in the work section of the Texas government website
- Contact your county clerk to find out more about municipal licenses and permits
Texas LLC Tax Information
Your LLC must be compliant with both Texas and federal tax requirements. Consult the following resources to learn about the tax requirements of your business:
Frequently Asked Questions
How much does it cost to start an LLC in Texas?
The basic cost to start a new LLC online in Texas is $300. You need to pay this fee when you apply your Certificate of Formation (Form 205) to the Texas Secretary of State.
How long does it take to get an LLC in Texas?
It takes an average of 4 to 7 business days if you file online to get your Texas LLC approval. However, if you decide to file by mail the whole process might take you around 7 weeks.
How do I know if my LLC is active in Texas?
You can check if a Texas LLC is active in two ways:
- Call the Texas Secretary of state – Call 512-463-5555 ( no fee ) and say “Hello, I formed forming an LLC and I’d like to check to see if it’s active”.
- Send an Email – you can email at [email protected] and ask the same as above, providing the name of your newly formed LLC.
Can a single person form an LLC in Texas?
Yes, Texas allows for a single person to incorporate as a single member LLC (SMLLC), and is one of the most common forms of incorporation.