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How do I form an LLC in Texas?

Federal & State Law Editorial TeamLast reviewed: 2026-04-30

Texas LLCs are governed by the Texas Business Organizations Code (BOC), Title 3, Chapter 101.

1. Filing Fee and Processing Time

  • Certificate of Formation (Form 205): $300 filing fee with the Texas Secretary of State (one of the higher state filing fees).
  • Processing: 5-7 business days online via SOSDirect or SOSUpload; paper filings 4-8 weeks. Expedited service available for $25 extra (next business day).

    • 2. Name Reservation

  • Optional. Form 501 reserves a name for 120 days for $40. The name must include "Limited Liability Company," "Limited Company," "LLC," "L.L.C.," "LC," or "L.C." and must be distinguishable (BOC § 5.053).

    • 3. Registered Agent

  • Required under BOC § 5.201.
  • Must be a Texas resident individual OR a domestic/foreign entity registered to do business in Texas, with a Texas street address (registered office). Consent (Form 401-A) is required from the agent.

    • 4. Operating Agreement (Company Agreement)

  • Permitted but NOT required to be filed with the state (BOC § 101.052).
  • A written company agreement is strongly recommended, especially to preserve charging-order protection and define member rights.

    • 5. No Annual Report Requirement

  • Texas does NOT require an annual report with the Secretary of State. (Contrast with most other states.)

    • 6. Texas Franchise Tax

  • Administered by the Texas Comptroller, not the Secretary of State.
  • Texas has no state income tax, but every LLC is subject to the franchise tax (Tex. Tax Code Ch. 171).
  • No-tax-due threshold: For reports due in 2024-2025, LLCs with annualized total revenue at or below $2.47 million owe $0 in franchise tax.
  • Even when no tax is due, an LLC must file a Public Information Report (PIR) annually (Form 05-102). Effective 2024, Texas eliminated the standalone "No Tax Due Report" — entities below the threshold simply file the PIR.
  • Tax rate above the threshold: 0.75% (retail/wholesale: 0.375%) of margin.

    • 7. Federal EIN and Texas Tax IDs

  • Obtain a federal EIN from the IRS (free).
  • Register with the Texas Comptroller for sales tax permit if selling taxable goods/services.
  • Register with the Texas Workforce Commission if hiring employees.

    • 8. Series LLCs

  • Texas recognizes Series LLCs (BOC § 101.601), allowing internal "series" with separate assets and liabilities under a single LLC umbrella — useful for real estate investors.

    • 9. Local Permits

  • Texas does not impose a statewide business license, but cities and counties may require local permits.

    • This is legal information, not legal advice.

    When to Talk to a Lawyer
    • You want to form a Series LLC for multiple properties or business lines
    • Your annualized revenue exceeds the franchise tax threshold
    • You are admitting investors and need a sophisticated company agreement
    Related Statutes & Laws
    • Tex. Bus. Orgs. Code § 5.053
    • Tex. Bus. Orgs. Code § 5.201
    • Tex. Bus. Orgs. Code § 101.052
    • Tex. Bus. Orgs. Code § 101.601
    • Tex. Tax Code Ch. 171

    This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.