Texas charges $300 to file an LLC, has no state income tax, and raised its franchise tax no-tax-due threshold to $2,650,000 for the 2026 report year. That’s the short version. The longer version involves one specific state agency, one form number, and a May deadline that’s easy to miss if nobody warns you about it in advance. Here’s the whole process, step by step.
We update this guide whenever the Texas Secretary of State or Comptroller changes a fee, a form, or a deadline, and every figure below is sourced from their own sites rather than from another blog. See how we test for the full method, including how we handle formation-service recommendations. Short version: carefully, and not yet for Texas. More on that at the end.
1. Name your LLC
Texas requires the name to contain “Limited Liability Company,” “LLC,” or “L.L.C.” Beyond that, it has to be distinguishable on the record from every other entity already registered with the Secretary of State, under comparison rules that are stricter than a quick search engine check will tell you.
Run the name through SOSDirect’s entity search before you get attached to it. If you’re not ready to file yet but want to hold the name, Form 501 reserves it for 120 days.
2. Appoint a registered agent
Every Texas LLC has to continuously maintain a registered agent with a physical street address in the state; a P.O. box doesn’t qualify. The agent’s job is to accept legal documents and state notices on the LLC’s behalf during normal business hours, and anyone named as an agent since 2010 has to have consented to the role in writing or electronically.
You can be your own registered agent if you have a Texas address and expect to actually be there during business hours. Plenty of owners do exactly that. The tradeoff is that the address becomes part of the public record, and if you’re out when something gets served, that’s a real problem. That’s the whole reason commercial registered agent services exist.
3. File the Certificate of Formation
This is the actual LLC filing: Form 205, filed with the Texas Secretary of State. The fee is $300. Pay by credit card through SOSDirect and Texas adds a statutory 2.7% convenience fee, which brings the real total closer to $308.
Processing time depends on how backed up the Secretary of State’s office is that week. SOSDirect filings have cleared in as little as 2 business days in mid-2026, though 3 to 4 business days is a safer number to plan around, and mailed filings take considerably longer. If a bank account or a closing date depends on the timing, check the Secretary of State’s current processing times before you file, not after. Expedited handling is available for an extra $25 per document.
4. Get an EIN from the IRS, for free
You’ll need an Employer Identification Number to open a business bank account, hire anyone, or file federal taxes. Apply directly at irs.gov. It takes about 15 minutes online and costs nothing.
This is the one step where paying a formation service to handle it for you buys almost nothing but time. If a package charges extra for “EIN filing,” you’re paying for convenience, not access. The IRS doesn’t gatekeep this.
5. Write an operating agreement
Texas doesn’t require you to file this with the state, and technically your LLC exists without one. It’s still the document that settles who owns what percentage, how profits split, what happens if a member wants out, and who can sign contracts for the LLC. Skip it on a multi-member LLC and you’re setting up the exact disagreement that turns friendships into lawsuits. On a single-member LLC, it’s one more piece of paper that shows a court you’re actually running a company, not just wearing an LLC as a costume.
6. Handle the Public Information Report and franchise tax
Texas doesn’t use the words “annual report.” What LLCs actually file every year is the Public Information Report, Form 05-102, submitted to the Texas Comptroller by May 15.
For the 2026 and 2027 report years, LLCs with annualized total revenue at or below $2,650,000 owe zero franchise tax, up from a $2,470,000 threshold for the 2024-2025 reports. “No tax due” isn’t the same as “nothing to file,” though: the PIR itself is still mandatory even at $0, and it’s now the only form most small LLCs need since the state eliminated the separate No Tax Due Report in 2024. Above the threshold, the standard rate is 0.75% of taxable margin for most entities, or 0.375% for businesses primarily in retail or wholesale.
Miss the May 15 deadline and the LLC risks forfeiture of its right to do business in Texas. At that point, members and managers can become personally liable for the LLC’s debts, which is the exact protection an LLC exists to provide. Confirm the current threshold on comptroller.texas.gov before you file, since the state adjusts it periodically.
7. Check for local licenses and permits
Texas doesn’t issue one general statewide business license. What you actually need depends on your city, county, and industry: a sales tax permit from the Comptroller if you sell taxable goods or services, a health permit if you handle food, a professional license in a regulated field, and sometimes a local zoning or occupancy permit just to operate at a given address. Check with your city and county clerk directly rather than assuming the state filing covers it. It doesn’t.
Should you file it yourself or pay someone?
Filing it yourself costs exactly $300, about $308 online, plus an afternoon of your time, assuming you’re comfortable being your own registered agent. That’s the real comparison: not “DIY versus a service” but “$300 versus $300 plus whatever a registered agent and a May 15 reminder are worth to you.”
A formation service just means a company that files the paperwork for you, usually bundled with a year of registered agent coverage. Northwest Registered Agent and ZenBusiness are two well-known names in that space. We’re not going to rank them here yet. Per our testing method, we only recommend a service after we’ve actually paid for and used it ourselves, and that testing isn’t finished for Texas. When it is, this paragraph gets replaced with a real comparison instead of a guess.
Frequently asked questions
How much does it cost to start an LLC in Texas?
The state charges $300 to file the Certificate of Formation, or about $308 if you pay by card online through SOSDirect. That’s separate from anything a formation service charges on top of it.
How long does it take to form an LLC in Texas?
It depends on the Secretary of State’s workload that week. SOSDirect filings have cleared in as little as 2 business days recently, though 3 to 4 business days is a more reliable estimate, and mailed filings take longer. Expedited processing adds $25 per document.
Do I have to hire a registered agent?
No. You can serve as your own registered agent if you have a Texas street address where you’re reliably present during business hours. A commercial service is optional. It mainly buys privacy and consistency, not a legal requirement you’d otherwise be missing.
Does a Texas LLC have to file an annual report?
Not by that name. Texas LLCs file a Public Information Report (Form 05-102) with the Comptroller by May 15 each year, and owe franchise tax only if revenue is above the no-tax-due threshold: $2,650,000 for the 2026 and 2027 report years.
Want the formation-service comparison?
We test before we recommend, and that testing isn’t done for Texas yet. Here’s exactly how the process works and what we check.
