Ortholo

Forming your Texas LLC is step one — but the Secretary of State filing is just the beginning. Within weeks of formation, most Texas LLCs must get a federal EIN, register with the Texas Comptroller's WebFile system, and confirm their registered agent is active. Ignore these steps and you risk a forfeited LLC, missed tax deadlines, and personal liability for company debts under Texas Tax Code §§ 171.251 and 171.255.

Step 1: Get Your Federal EIN

An Employer Identification Number (EIN) is your LLC's federal tax ID — the business equivalent of a Social Security number. You need it to open a business bank account, hire employees, and complete your Texas franchise tax registration.

How to apply: Go directly to the IRS and apply online. The process takes about 10 minutes and your EIN is issued immediately at no charge.

Cost: Free. Never pay a third party to obtain your EIN — the IRS issues it directly.

Common mistake: Many single-member LLC owners assume they don't need an EIN without employees. Wrong — banks require it, and the Texas Comptroller's WebFile system uses it as part of your taxpayer registration.

This should take about 10 minutes.

Step 2: Confirm Your Registered Agent Is Active

Every Texas LLC must maintain a registered agent with a physical Texas street address at all times. This is the person or service that receives lawsuits, legal notices, and official state mail on behalf of your LLC.

What to verify:

  • Your registered agent's address is current in the Texas Secretary of State records
  • Your registered agent will be available at that address during normal business hours
  • If you used a formation service, confirm they are still actively serving as your agent

How to check: Search your LLC at sos.state.tx.us to confirm the registered agent on record.

To change your registered agent: File Form 401 with the Secretary of State ($15 fee).

Common mistake: Assuming your registered agent arrangement is permanent. If your agent resigns or moves without updating the SOS, you may miss lawsuit service — leading to a default judgment against your LLC without you ever knowing a suit was filed.

This should take about 5 minutes to verify.

Step 3: Register With Texas WebFile for Franchise Tax

The Texas Comptroller's WebFile system is where you'll file your annual Franchise Tax Report and Public Information Report (PIR). You need an account before your first May 15 deadline.

How to register:

  1. Go to comptroller.texas.gov/taxes/franchise
  2. Click "WebFile" and create an eSystems account using your email
  3. Add your LLC using your 11-digit taxpayer number (printed on your SOS filing confirmation)

Why this is urgent: Texas requires every LLC to file a Franchise Tax Report by May 15 each year — even if you owe $0. The 2026 no-tax-due threshold is $2,650,000 in annualized total revenue. If you're below it, you still file the Public Information Report (PIR, Form 05-102). Missing the deadline triggers a $50 penalty immediately, and continued non-filing leads to forfeiture of your LLC.

Common mistake: New LLCs often miss their first May 15 filing because they assume the clock starts the year after formation. It does not — your LLC owes a report in the May following the calendar year it was active.

This should take about 15 minutes.

Step 4: Open a Dedicated Business Bank Account

This is not a legal requirement, but it is one of the most important things you can do to protect your limited liability. Commingling personal and business funds — known as "piercing the corporate veil" — is one of the top reasons courts hold LLC members personally liable for company debts.

What you'll need:

  • Your EIN (from Step 1)
  • Your Texas Certificate of Formation from the Secretary of State
  • Your LLC's Operating Agreement (most banks require this)
  • A government-issued ID

Common mistake: Running all business income and expenses through a personal checking account. Even occasional personal charges can undermine your liability protection if your LLC is ever sued.

Step 5: Apply for a Texas Sales Tax Permit (If Required)

If your LLC sells tangible personal property or taxable services in Texas, you must collect and remit Texas sales tax — and you must register before your first taxable sale. There is no grace period.

Who needs a permit:

  • Retailers selling physical products
  • Businesses providing taxable services (auto repair, data processing, certain amusement services, and others listed by the Comptroller)
  • Any business with Texas sales tax nexus

Who does NOT need a permit:

  • Most pure service businesses (consulting, coaching, most professional services)
  • Sellers of exempt items only (groceries, prescription drugs)
  • Note: Digital goods and SaaS are generally NOT taxable in Texas

How to apply: Register free at comptroller.texas.gov/taxes/permit. Your permit number is issued immediately.

Cost: Free. Texas charges no fee for a sales tax permit.

Filing frequency: The Comptroller assigns monthly, quarterly, or annual reporting based on your sales volume. Returns are due on the 20th of the month following each reporting period. You must file zero-dollar returns if you had no taxable sales.

This should take about 10 minutes.

Step 6: Register as a Texas Employer (If You Have Employees)

If you hire W-2 employees, two additional registrations are required in Texas.

Texas Workforce Commission — UI Tax: Register at twc.texas.gov to get your TWC account number for quarterly Unemployment Insurance (UI) tax filings. New employers typically start at a 2.7% rate on the first $9,000 of each employee's wages. Quarterly reports are due the last day of the month following each quarter: April 30, July 31, October 31, and January 31.

New Hire Reporting: Within 20 days of each new hire or rehire, report the employee to the Texas Attorney General at portal.cs.oag.state.tx.us. This is required by both federal and Texas state law for child support enforcement. The penalty is $25 per late report; $500 if the failure is part of a conspiracy not to report.

Important: Texas has no state income tax, so there is no employee withholding registration — only the UI tax and new hire reporting requirements above.

Step 7: File Your First Franchise Tax Report + PIR by May 15

This is the most time-sensitive recurring obligation. Every Texas LLC active in a calendar year must file by May 15 of the following year.

What to file:

  • Franchise Tax Report — Form 05-169 (EZ Computation) if annual revenue is $20M or less; Form 05-158-A/B (Long Form) if higher
  • Public Information Report (PIR) — Form 05-102, listing your LLC's officers and registered agent

Even if you owe $0 in tax: You still must file. As of 2024, the old standalone "No Tax Due Report" was discontinued. If your revenue is below the $2,650,000 threshold, you simply file the PIR. Failing to file results in a $50 immediate penalty, plus 5% of any tax owed (1–30 days late) or 10% (30+ days late). Continued non-filing leads to forfeiture of your LLC's right to do business in Texas.

File online at comptroller.texas.gov/taxes/franchise via WebFile.

Quick Reference

DetailInfo
EINRequired; apply free at IRS.gov
Registered AgentMust be active at all times; change via Form 401 ($15)
WebFile RegistrationRequired for franchise tax; free at comptroller.texas.gov
Franchise Tax DueMay 15 annually
PIR (Form 05-102) DueMay 15 annually (filed with franchise tax)
Sales Tax PermitRequired if selling taxable goods/services; free
UI Tax RegistrationRequired if hiring W-2 employees; via twc.texas.gov
New Hire ReportingWithin 20 days of each hire; via OAG portal

Frequently Asked Questions

When does my Texas LLC's first franchise tax report come due?

Your first Franchise Tax Report is due May 15 of the year following your formation year. If you formed your LLC in 2025, your first report is due May 15, 2026. Every LLC active as of January 1 of a given year owes a filing by May 15 of that same year.

Do I need a sales tax permit for my Texas LLC?

Only if you sell taxable items. Most service-based LLCs — consulting, design, coaching, freelance work — do not need a permit. If you sell physical goods, or if you provide any of the taxable services enumerated by the Comptroller (such as auto repair or data processing), you do. Check the Comptroller's taxable services guide at comptroller.texas.gov/taxes/sales when in doubt.

What happens if I don't complete these post-formation steps?

The consequences vary by step. Missing the May 15 franchise tax or PIR deadline triggers a $50 immediate penalty, and sustained non-filing leads to forfeiture — your LLC loses the right to transact business in Texas and officers can become personally liable for company debts under Texas Tax Code §§ 171.251, 171.252, 171.255. Selling without a required sales tax permit exposes you to back taxes, penalties, and interest. Missing new hire reporting costs $25 per incident.

Is an operating agreement required for a Texas LLC?

Texas law does not require a written operating agreement, but every LLC should have one. Banks require it to open accounts. Courts look to it to resolve member disputes. Without one, your LLC defaults to the Texas Business Organizations Code's standard rules, which may not match how you intend the business to operate.

Do I need a general business license in Texas?

Texas does not have a statewide general business license. However, many industries require specific state licenses (contractors, healthcare providers, cosmetologists, real estate agents) and some cities require local business permits or registrations. Check your industry's state licensing board and your city's website for requirements specific to your business type.

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.

Check my obligations — free →

Disclaimer: This page is for general informational purposes only and does not constitute legal or tax advice. Laws and thresholds change — verify all deadlines, fees, and requirements with the official state sources listed below before taking action.

Last verified: 2026-05-18

Sources: