Fees
Texas LLC formation costs
$300 to form + $0 franchise tax (under $2.47M revenue threshold) = ~$300 first-year cost (before registered agent service)
| Fee | Amount | Notes |
|---|---|---|
| Certificate of Formation filing fee | $300 | One-time state filing fee payable to the Texas Secretary of State via SOSDirect. Highest LLC formation fee among the FL/TX/CA/NY/DE comparison set. |
| Expedited processing (optional) | $25 | Adds 24-hour processing on top of the standard fee. Standard SOSDirect processing is 3–5 business days; mail filings can take 4–8 weeks. |
| Franchise tax / Public Information Report (annual) | $0 if under $2.47M revenue | Texas has no flat annual report fee. The franchise tax owed is $0 below the no-tax-due threshold ($2.47M for reports due in 2024 and later), but the PIR and No Tax Due Report must still be filed by May 15 each year. |
| Name reservation (optional) | $40 | TX Form 501. Reserves a name for 120 days. Most filers skip this and file the Certificate of Formation directly once availability is confirmed. |
| EIN application | Free | IRS Form SS-4 — free online at irs.gov/ein. No state fee. |
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LLC formation services — Bizee primary placement.
Requirements
What you need to know before filing
- Name must contain 'LLC', 'L.L.C.', 'Limited Liability Company', 'Limited Company', 'LC', or 'L.C.' — TX accepts any of these designators.
- A registered agent with a physical Texas street address (no PO boxes) must be named on the Certificate of Formation; the RA must consent in writing.
- Certificate of Formation (Form 205) is filed with the Texas Secretary of State through SOSDirect or by mail.
- An Operating Agreement (called 'Company Agreement' under TX Business Organizations Code) is not filed with the state but is strongly recommended.
- Texas LLCs are subject to the franchise tax, but there is no tax due if total revenue is under the no-tax-due threshold ($2.47M as of 2024). The Public Information Report (PIR) and No Tax Due Report are still required annually by May 15.
- An EIN from the IRS is required to open a business bank account and for federal tax filing.
- Foreign LLCs (formed outside TX but operating in TX) must register as a foreign LLC with the Texas Secretary of State — separate Application for Registration form and $750 fee.
- Houston-based LLCs operating in regulated industries (oil & gas services, healthcare, contracting) may need additional Harris County or City of Houston permits beyond state formation.
Documents
What you'll need to file
- Certificate of Formation (Form 205) — filed through SOSDirect. Requires LLC name, registered agent name and TX street address, governing authority (member-managed vs manager-managed), purpose, and organizer signature.
- Registered agent consent — TX Form 401-A or written consent retained in LLC records; the RA must accept appointment in writing.
- Company Agreement (Operating Agreement) — not filed with the state but strongly recommended. TX BOC § 101.052 explicitly authorizes member-adopted company agreements.
- IRS SS-4 (EIN Application) — completed online at irs.gov/ein after the LLC is formed.
- Texas Comptroller WebFile registration — required for franchise tax / PIR filings, even if no tax is due.
- Business bank account documentation — EIN letter, Certificate of Formation, and Company Agreement.
Registered agent
Who receives legal mail for your LLC
Required in every state. Florida requires a physical FL street address.
- Required?
- Yes
- Who can serve
- Texas resident age 18+ with a TX street address, or a registered TX business entity, who has consented in writing
- Can I serve myself?
- Yes
- Commercial RA cost
- ~$125/yr
Serving as your own RA places your home address on the public Texas SOS record, indexed by search engines and accessible to anyone. Commercial RA services ($50–$150/yr) preserve privacy and ensure legal mail is never missed.
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Process
How to form a LLC in Texas
Sequential — each step gates the next.
-
Confirm name availability with the Texas SOS Search the Texas SOSDirect or Comptroller name database 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).
-
Appoint a Texas registered agent Designate a registered agent with a physical TX street address (no PO boxes) who is available during normal business hours. The RA must consent in writing (Form 401-A or signed consent retained in records). Houston-based filers commonly self-serve from a home or office address inside Harris County, but the address becomes part of the public SOS record.
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File Certificate of Formation (Form 205) on SOSDirect Create a SOSDirect account at direct.sos.state.tx.us and file Form 205. You will need the LLC name, RA name and TX address, governing-authority structure (member-managed or manager-managed), purpose, and organizer signature. Pay $300 by credit card. Add $25 for 24-hour expedited handling if needed. Standard processing is 3–5 business days.
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Draft a Company Agreement TX BOC § 101.052 explicitly authorizes the LLC's members to adopt a Company Agreement (Operating Agreement). Although not filed, the agreement governs membership percentages, profit allocation, voting, transfer restrictions, and dissolution. Single-member LLCs still benefit from a written agreement to reinforce liability separation.
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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 EIN Confirmation Letter (CP 575) for the bank.
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Register with the Texas Comptroller for franchise tax / PIR Even if your LLC owes no franchise tax, you must register with the Texas Comptroller and file the No Tax Due Report and Public Information Report annually by May 15. Register at comptroller.texas.gov/taxes/franchise/.
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Check Houston / Harris County local requirements Houston-based businesses in regulated trades (food service, contracting, alcohol, transportation, oil & gas services) may need additional City of Houston business permits and/or Harris County registrations beyond state-level formation. The state LLC creates the entity; local permits authorize specific activities.
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Open a business bank account Bring your EIN Confirmation Letter, Certificate of Formation, photo ID, and Company Agreement. A separate business account is the single most important step in maintaining the LLC's liability shield.
Annual obligations
What your LLC owes every year
Year-2+ costs most formation guides omit.
| Obligation | Due date | Fee | Consequence if missed |
|---|---|---|---|
| Public Information Report + No Tax Due Report (or Franchise Tax Report) | May 15 each year | $0.00 | Forfeiture of the right to transact business in Texas and personal liability for members under TX Tax Code § 171.255 if not filed. |
Provenance
Statute basis & official sources
Last verified 2026-05-06.
Texas Business Organizations Code, Title 3, Chapter 101 (Limited Liability Companies); Title 1, Chapter 5 (Names of Entities); Texas Tax Code, Chapter 171 (Franchise Tax); IRS Rev. Rul. 77-137 and subsequent guidance on single-member LLC tax treatment.
Direct filing portal: https://direct.sos.state.tx.us/
If you skip the LLC
- Operating as a sole proprietor with no LLC means unlimited personal liability — a business debt or lawsuit can reach your personal assets (home, savings, car).
- Without an LLC, the business name is not protected in Texas; another entity can register the same name and force a rebrand.
- Sole proprietors lose the flexibility to elect S-corp tax treatment (available to LLCs) once revenue justifies it, costing thousands in self-employment tax annually for a profitable business.
- Banks, payment processors, and commercial landlords routinely require an EIN and formal business entity for account opening and lease execution.
- Failure to file the annual PIR and No Tax Due Report by May 15 results in forfeiture of the LLC's right to transact business in TX and personal liability for members under TX Tax Code § 171.255 — among the most punitive consequences in any state.
Formation context
Who should form in Texas?
- Recommended for
- Texas residents forming a business operating primarily in TX; Houston-based founders, contractors, and small business owners across Harris County; Energy-services, healthcare, and trades professionals looking to formalize
- 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 imposes no state income tax. Franchise tax applies but is $0 below the no-tax-due threshold.
If you live outside Texas but form here for the no-state-income-tax advantage, note that you will likely need to register as a foreign LLC in your home state — usually paying both states' annual obligations. Form in the state where you actually do business.
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
How much does it cost to form an LLC in Texas?
The Certificate of Formation filing fee is $300 — the highest among Florida, Texas, California, New York, and Delaware. There is no flat annual report fee, but Texas LLCs must file a Public Information Report and franchise tax report each year by May 15. The franchise tax is $0 if total revenue is under the no-tax-due threshold ($2.47M as of 2024).
How long does it take to form an LLC in Texas?
Standard SOSDirect processing is 3–5 business days. Expedited 24-hour processing is available for an additional $25. Mail filings can take 4–8 weeks and should be avoided. After formation, an EIN is issued immediately online at irs.gov/ein.
Does Texas have a franchise tax on LLCs?
Yes, but most small businesses owe $0. The no-tax-due threshold is $2.47M in total revenue (for reports due in 2024 and later). Below that, the LLC owes no franchise tax but must still file the No Tax Due Report and Public Information Report each May 15. Failure to file triggers forfeiture and personal liability under TX Tax Code § 171.255.
Does Texas require a registered agent for an LLC?
Yes. Every Texas LLC must maintain a registered agent with a physical TX street address (no PO boxes) who consents in writing to serve. You can be your own RA if you have a TX street address, but your address becomes part of the public SOS record. Commercial RA services ($50–$150/yr) preserve privacy.
Do I need a separate Houston or Harris County business license?
The state-level LLC formation creates the entity, but Houston-based businesses in regulated industries (food service, alcohol, contracting, transportation, oil & gas services) typically need additional City of Houston permits and/or Harris County registrations. There is no general 'Houston business license' for unregulated activities — most service-based and online businesses operate on the state LLC alone.
Should I form my LLC in Texas or Delaware?
For most small businesses operating in Texas, form in Texas. Delaware's advantages (Court of Chancery, investor familiarity) apply primarily to venture-backed startups. If you form in Delaware but operate in Texas, you must register as a foreign LLC in Texas — paying $750 plus annual obligations in both states. The cost advantage of Delaware evaporates for a typical Houston-based small business.
What is the annual filing requirement for a Texas LLC?
All Texas LLCs must file the Public Information Report (PIR) and either the No Tax Due Report or franchise tax report by May 15 each year. The fee is $0 below the no-tax-due threshold ($2.47M revenue for 2024+ reports). Failure to file triggers forfeiture of the right to transact business and exposes members to personal liability under TX Tax Code § 171.255.
Not sure yet?
Should I form an LLC?
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.
LLC vs S-Corp vs Sole Prop vs C-Corp — compare all four →Is a DBA enough?
DBA vs LLC — do you actually need a full LLC?
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.
DBA vs LLC — cost, liability shield & when to upgrade →After you file
Next steps after forming your LLC
Your Articles of Organization are filed — now make your LLC operational. Three actions every new LLC owner needs to take:
§ A Building permits in Texas / Houston
§ B Other states & comparisons
§ C Companion tools
Disclaimer: Informational only — not legal advice. LLC laws change; verify with a Texas business attorney or CPA before filing.