Texas LLC: 8 Steps for Forming an LLC in Texas

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:

1. Choose a name for your Texas LLC
2. Select your LLC members
3. Decide on a management structure
4. Assign a Texas registered agent
5. Create a Texas LLC Operating Agreement (Optional)
6. File Your Certificate of Formation
7. Register for an Employer Identification Number (EIN)
8. 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.

According to Tex. BOC § 101.251, the governing authority of a Limited Liability Company, can either be member-managed or manager-managed.

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)

Texas does not require an operating agreement or single-member LLC operating agreement to open an LLC; however, it’s highly recommended that members create one.

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.

You can apply for your Texas LLC Certificate of Formation online using the SOSDirect system, or by submitting a completed version of Form 205 by:

• 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:

Federal: 

• The U.S. Small Business Administration has provided a list of needed federal licenses and permits by industry

State:

• 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

Municipal: 

• 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:

State:

The tax section of the Texas Comptroller’s website

Federal:

Internal Revenue Service small business and self-employed tax information

Frequently Asked Questions