Forming a Texas LLC takes seven straightforward steps: pick an available name, appoint a registered agent, file your Certificate of Formation (Form 205) with the Texas Secretary of State for $300, draft an operating agreement, get a federal EIN, open a business bank account, and register for any required state taxes. Once formed, your LLC must file a franchise tax report with the Comptroller every May 15 — even if you owe nothing.

Step 1: Choose and verify your LLC name

Your LLC's name must be distinguishable from every other business entity already on file with the Texas Secretary of State. It must also include "Limited Liability Company," "LLC," or "L.L.C." in the name.

Search name availability for free at the Texas SOS Name Availability tool before you file — the SOS will reject your Certificate of Formation if your chosen name conflicts with an existing entity.

Common mistake: Searching Google or the Secretary of State website and assuming a unique result means the name is available. Use the official SOS name search tool — it checks against the actual entity database.

A few naming rules to know:

• You cannot include words implying the entity is a bank, government agency, or licensed profession (e.g., "Bank," "City of," "Attorney") without additional approvals
• Restricted terms like "University" or "Insurance" require written consent from the relevant state agency
• If you plan to do business under a different name (a "DBA"), you'll need to file an Assumed Name Certificate separately — see Step 7 below

Estimated time: 5–10 minutes.

Step 2: Appoint a Texas registered agent

Every Texas LLC must maintain a registered agent with a physical Texas street address (no P.O. boxes) at all times. The registered agent receives legal documents — lawsuits, state notices, and official correspondence — on behalf of your LLC.

Your options:

• Be your own registered agent: Any member or manager with a Texas street address who is present during normal business hours can serve. This is free but exposes your personal address in the public record.
• Use a registered agent service: Professional services typically charge $50–$300 per year. They handle receipt of legal documents and forward them to you, and they keep your home address off the public record.

See our guide on Texas registered agent requirements for a deeper comparison.

Common mistake: Using a P.O. box or a mailbox service address. Texas requires a physical street address in Texas. If your registered agent moves or resigns without a replacement, your LLC can miss critical legal notices. To change your registered agent later, file Form 401 with the SOS.

Estimated time: 5 minutes to designate; same day if using a registered agent service.

Step 3: File Certificate of Formation (Form 205) with the SOS

This is the official filing that creates your LLC under Texas law. File Form 205 — Certificate of Formation for a Limited Liability Company with the Texas Secretary of State.

What to include on Form 205:

1. Your LLC's legal name (as verified in Step 1)
2. Your registered agent's name and Texas street address
3. Whether the LLC will be managed by members or by managers
4. The names and addresses of each organizer (the person filing — does not have to be a member)
5. An effective date (optional; defaults to the filing date)

How to file:

• Online: Through SOSDirect — fastest option, typically 3–5 business days processing
• By mail: Send to P.O. Box 13697, Austin, TX 78711-3697
• In person or by fax: Available at the SOS office in Austin

Filing fee: $300 (non-refundable). Pay online by credit card, or include a check made payable to the Secretary of State.

The SOS will return a file-stamped copy of your Certificate of Formation, which is your official proof that the LLC exists. Keep this document.

Estimated time: 15–20 minutes to complete the form.

Step 4: Draft an operating agreement

Texas does not require an operating agreement, but you should create one before doing any business. This internal document governs:

• How profits and losses are allocated among members
• Voting rights and decision-making procedures
• What happens when a member wants to leave or transfers their ownership interest
• How the LLC is dissolved if needed

Without an operating agreement, Texas default rules under the Business Organizations Code apply — which assume equal ownership and may not reflect your actual arrangement. Banks often ask for a copy of your operating agreement when you open a business account.

Common mistake: Assuming a one-page template is sufficient for a multi-member LLC. If multiple people own the business, cover exit scenarios explicitly — buyout procedures, valuation methods, and what happens at a member's death or incapacity.

Estimated time: 1–3 hours to draft (longer if negotiating with co-founders).

Step 5: Apply for a federal EIN

An Employer Identification Number (EIN) is your LLC's federal tax ID number, issued by the IRS. You need it to open a business bank account, hire employees, and file taxes.

Apply for free at the IRS EIN Assistant. Online applications are processed immediately and you receive your EIN the same day.

Multi-member LLCs must have an EIN. Single-member LLCs technically can use the owner's Social Security Number instead, but getting an EIN is free and separates your business identity from your personal SSN — strongly recommended.

See our guide on Texas LLC EIN application for the full walkthrough.

Estimated time: 10–15 minutes online.

Step 6: Open a business bank account

After you have your Certificate of Formation and EIN, open a dedicated business checking account before you make any business transactions. This is one of the most important steps for protecting your personal assets.

The LLC's limited liability protection can be weakened — or lost entirely — if you routinely mix personal and business funds (called "piercing the corporate veil"). A separate account makes bookkeeping, tax preparation, and liability protection all easier.

Most banks require:

• Your Certificate of Formation (SOS file-stamped copy)
• Your EIN confirmation letter from the IRS
• Your operating agreement
• A government-issued ID

Estimated time: 30–60 minutes at a bank branch (some banks offer online business account opening).

Step 7: File a DBA if you operate under a different name

If your LLC plans to do business under any name other than its exact legal name as filed with the SOS, you must file an Assumed Name Certificate (Form 503) before using that DBA name.

Texas requires filing with both the Secretary of State and the county clerk of every county where you do business:

• SOS fee: $25
• County clerk fee: Varies by county (typically $15–$25)

Failure to file means you cannot legally enforce contracts made under the assumed name. DBA certificates are valid for 10 years and must be renewed.

See our guide on the Texas DBA assumed name certificate for step-by-step instructions.

Common mistake: Filing only with the county and skipping the SOS. Texas requires both filings.

Step 8: Register for state taxes and ongoing compliance

Your LLC is now formed. Before you open for business, make sure you have the right tax registrations:

Franchise tax (required for all LLCs): Every Texas LLC must file a franchise tax report with the Texas Comptroller by May 15 each year, starting the year after formation. The no-tax-due threshold for 2026 is $2,650,000 in annualized revenue — if you're below that, you still file but owe no tax. See our franchise tax guide for full details.

Sales tax permit (required if you sell taxable goods or services): If your LLC sells tangible goods or taxable services in Texas, you must register for a sales tax permit with the Comptroller before your first sale. The permit is free. See our sales tax permit guide.

Employer taxes (required if you hire W-2 employees): If you hire employees, register with the Texas Workforce Commission for unemployment insurance tax and comply with new hire reporting requirements within 20 days of each hire.

Quick reference

FAQ

How much does it cost to form a Texas LLC?

The required filing fee is $300 paid to the Texas Secretary of State. Beyond that, a registered agent service runs $50–$300 per year, and a DBA filing adds $25 at the SOS plus a county fee. See our Texas LLC cost guide for a full breakdown of first-year and ongoing costs.

How long does it take to form a Texas LLC in Texas?

Online filings through SOSDirect are typically processed in 3–5 business days. Mail filings take 10–15 business days. The SOS offers expedited processing (same-day or 24-hour) for an additional fee.

Do I need an operating agreement for my Texas LLC?

Texas does not legally require one, but every LLC should have one. It governs profit splits, decision-making, and what happens when a member exits. Without it, Texas default rules under the Business Organizations Code apply, which may not reflect your intentions — and banks routinely ask for it when opening a business account.

What taxes does a new Texas LLC have to pay?

Every Texas LLC must file a franchise tax report by May 15 each year, even if no tax is owed. If your LLC sells taxable goods or services, you also need a sales tax permit. Texas has no personal state income tax, so there is no employee state income tax withholding. If you have W-2 employees, you must pay unemployment insurance tax quarterly to the Texas Workforce Commission.

Can I be my own registered agent for my Texas LLC?

Yes. Any individual with a Texas street address — P.O. boxes are not permitted — who is available during normal business hours can serve as the LLC's own registered agent at no cost. The main trade-off is that your personal address becomes part of the public record. See our guide on being your own registered agent in Texas.

Not sure what else your Texas LLC owes?

Most business owners are surprised by how many filing obligations they have. Ortholo's free compliance checker shows you everything you owe, when it's due, and what happens if you miss it — personalized to your entity.

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Last verified: 2026-05-03

Sources: Texas Secretary of State — Forms & Fees | Texas Comptroller — Franchise Tax | Texas Comptroller — Sales Tax | IRS — Apply for an EIN