How to Form an LLC in Houston, TX — 2026 Filing Guide

Required?

Yes

Who can serve

Texas resident individual with a physical TX street address (no PO boxes), or a business entity authorized to transact business in Texas and maintaining a TX street address

Can I serve myself?

Yes

Commercial RA cost

~$100/yr

Texas Certificate of Formation does not require member names on the public filing — the registered agent address is the primary public record. For owners who want privacy, a manager-managed structure with a commercial RA address limits personal address exposure. Texas offers better member privacy than Illinois (which requires member names on Articles for member-managed LLCs).

Renewing or switching? Compare standalone registered agent services — Northwest, Harbor Compliance, Registered Agents Inc., InCorp, and more.

1. Confirm name availability with the Texas SOS Search the Texas SOSDirect or Comptroller business name database at sos.state.tx.us to confirm your desired name is available and not deceptively similar to an existing TX entity. The name must include an LLC designator (LLC, L.L.C., Limited Liability Company, Limited Company, LC, or L.C.). Optional: reserve the name for 120 days with Form 501 ($40) while you prepare the Certificate of Formation.
2. Appoint a Texas registered agent Designate a registered agent with a physical Texas street address (no PO boxes). Texas residents may self-serve as RA. Out-of-state owners and non-Houston residents operating remotely use a commercial RA service ($50–$150/yr). The RA must provide written consent to serve before the Certificate of Formation is filed.
3. File the Certificate of Formation ($300) with TX SOS File online at sos.state.tx.us via SOSDirect. The Certificate (Form 205) requires the LLC name, registered agent name and TX street address, governing authority structure (member-managed vs. manager-managed), purpose clause, and organizer signature. Pay the $300 filing fee by credit card. Standard online processing: 3–5 business days; expedited 24-hour processing available (+$25).
4. Draft a Company Agreement (Operating Agreement) Texas Business Organizations Code § 101.052 authorizes members to adopt a Company Agreement — the Texas equivalent of an Operating Agreement. While not required to be filed with the state, a detailed Company Agreement is essential for Houston LLCs in industries where member roles, capital calls, profit splits, and buyout triggers must be clearly documented. Multi-owner Houston real estate LLCs, oilfield service companies, and construction ventures should have all members execute the Company Agreement before any capital contributions.
5. Obtain an EIN from the IRS After the Certificate of Formation is approved, apply for an EIN at irs.gov/ein. The online application takes under 15 minutes and provides the EIN immediately. Print the CP 575 EIN Confirmation Letter for bank account opening and state tax registrations.
6. Register with the Texas Comptroller for franchise tax / PIR filings All Texas LLCs must register with the Texas Comptroller and file a Public Information Report (PIR) by May 15 each year — even if no franchise tax is owed. Register at comptroller.texas.gov/taxes/franchise/. LLCs with total revenue under $2.47M file a No Tax Due Report and PIR ($0 fee). Failure to file results in a $50 late penalty and, after continued non-compliance, forfeiture of the LLC's right to do business in Texas. The Comptroller sends notice to the registered agent address on file.
7. Obtain industry-specific permits from City of Houston, TABC, or Harris County The City of Houston has no general business license requirement, but regulated industries must obtain specific permits. Food service businesses need a City of Houston food establishment permit from the Health Department (fee varies by establishment type and seating capacity). Alcohol and beer sales require a TABC permit (visit tabc.texas.gov for permit type and fee schedule). Exterior signage requires a City of Houston sign permit from the Planning & Development Department. Construction and renovation require City of Houston building permits. Confirm permit requirements at houstontx.gov/permits.
8. Register for Texas sales tax if selling taxable goods or services If your Houston LLC sells taxable goods or services, register with the Texas Comptroller for a Texas Sales and Use Tax Permit (free). Houston's combined sales tax rate is 8.25%: state 6.25% + City of Houston 2%. Businesses must collect and remit the 8.25% on taxable Houston sales. Register at comptroller.texas.gov/taxes/sales/.
9. Open a business bank account Bring your EIN Confirmation Letter, Certificate of Formation, and Company Agreement to the bank. A separate business account is the single most important step for maintaining the LLC's liability protection. Houston's major commercial banks (Chase, Wells Fargo, Frost, Amegy) require an EIN and formation documents. A clean separation between business and personal accounts also simplifies the annual franchise tax PIR calculation.

Texas Business Organizations Code (TX BOC) §§ 101.001 et seq. (LLC formation); § 3.005 (Certificate of Formation); § 101.052 (Company Agreement); TX BOC § 9.001 (foreign LLC registration); Texas Tax Code Chapter 171 (franchise tax); Texas Tax Code § 151 (sales and use tax); City of Houston Code Chapter 20 (food establishment permits); Texas Alcoholic Beverage Code (TABC); IRS guidance on single-member LLC disregarded entity treatment.

Direct filing portal: https://direct.sos.state.tx.us/

Formation context

Who should form in Texas?

Recommended for

Houston-area entrepreneurs, contractors, and small business owners who want to avoid dual-state filing costs by forming directly in Texas; Oil & gas services, construction, healthcare, logistics, and hospitality businesses headquartered in the Houston metropolitan area; Out-of-state investors or remote operators establishing a Texas presence — Houston's no-general-business-license environment reduces operational overhead

Tax treatment (default)

Pass-through by default at the federal level: single-member LLCs are disregarded entities (Schedule C); multi-member LLCs are partnerships (Form 1065). Texas has no state income tax — LLC pass-through income is not taxed at the state level. The Texas franchise tax applies to total revenue, not net income — LLCs with total revenue under $2.47M owe $0 in franchise tax but must still file the annual PIR.

For businesses physically operating in Texas, forming directly in Texas avoids the dual-state cost trap. A Wyoming or Delaware LLC that operates in Houston must register as a foreign LLC in Texas ($750 fee), pay that state's annual fees, AND meet all Texas requirements. The 'formation-only state' strategy makes sense for holding structures and investor-facing entities — not for an operating Houston business. Texas's $0 franchise tax below threshold and $0 state income tax eliminate the traditional cost-advantage argument for forming elsewhere.

No publication requirement in Texas — unlike New York or Nebraska, you do not need to publish notice in a newspaper after filing.

FAQ

Common Texas (Houston) LLC formation questions

Still deciding between an LLC, sole proprietorship, S-Corp, or C-Corp? Our entity-type comparison breaks down formation cost, tax treatment, liability shield, and compliance complexity for all four structures side by side.

Once your LLC clears ~$80K in annual net profit, an S-Corp election (IRS Form 2553) typically saves $5,000–$15,000/year in self-employment taxes by splitting owner income into a W-2 salary + tax-free distributions. The election is free — Form 2553 has no IRS filing fee. The key decision factors: your net income level, a defensible reasonable-compensation salary, and the 75-day Form 2553 filing window after LLC formation.

Already operating as a sole proprietor, or wondering whether a cheap county DBA filing ($10–$100) is enough instead of forming an LLC? A DBA lets you operate under a trade name — but provides zero liability protection. Our DBA vs LLC comparison breaks down exactly when a DBA is sufficient and when you need a state LLC filing.

Missing your annual report deadline triggers late fees and — if left long enough — administrative dissolution, which voids your LLC's liability shield until reinstated. Know your Texas deadline, fee, and the consequences of missing it.

Also see the LLC annual report requirements hub for state-by-state deadlines, fees, late penalties, and reinstatement rules.

If your LLC opens an office, hires employees, or regularly does business in another state, you must foreign-qualify there — or face fines, back taxes, and loss of standing to sue. Our foreign qualification guide covers when you need it, how to file a Certificate of Authority, and what it costs.

Your Articles of Organization are filed — now make your LLC operational. Four actions every new LLC owner needs to take:

Formation gets your LLC into existence; contracts, trademark protection, operating agreement review, and vendor-document review keep it usable. Compare subscription and per-document legal platforms before you rely on a template or pay a local attorney retainer.

Commingling personal and business funds is the #1 way LLC owners lose their liability shield. A separate business account — in your LLC's legal name, with your EIN — is the foundational act of corporate formality. Mercury, Novo, Bluevine, Relay, and Found open same-day with no monthly fees. Compare online banks vs. Chase and Bank of America.

How you pay yourself depends on your LLC's tax classification — not what you call the transfer. A disregarded single-member LLC pays via owner draw with SE tax on all net profit. An S-Corp-elected LLC splits income between a W-2 salary (FICA applies) and tax-free distributions. Getting this wrong triggers IRS audit risk and SE-tax errors.

Single-member LLCs file Schedule C with their personal Form 1040 (due April 15). Multi-member LLCs file Form 1065 by March 15. S-Corp-elected LLCs file Form 1120-S by March 15. Know your form, your deadline, and the common deductions — home office, vehicle, retirement contributions, and startup costs — before your first April filing.