How to Start an LLC
in Texas
Everything you need to know: $300 state filing fee, 2–3 day processing, no personal income tax. File it yourself or let EleetAI handle everything for $499 all-inclusive.
Texas LLC at a Glance
6 Steps to Form a Texas LLC
Choose your LLC name
Your Texas LLC name must be distinguishable from every other entity on file with the Secretary of State. It must include "Limited Liability Company", "LLC", or "L.L.C." in the name. You can check name availability at the Texas Comptroller's entity search.
Restricted words like "bank", "insurance", or "university" require additional licensing. Avoid names that imply a government affiliation. If your desired name is taken, you can use a DBA (assumed name) after formation.
Designate a registered agent
Every Texas LLC must have a registered agent with a physical street address in Texas (no P.O. boxes). The registered agent must be available during normal business hours to accept legal documents — lawsuits, subpoenas, state correspondence, and tax notices.
You can serve as your own registered agent if you have a Texas address and are consistently available. However, most owners use a professional service to keep their home address off public records and ensure no documents are missed. Eleet AI includes first-year registered agent service with every Texas LLC formation.
File the Certificate of Formation (Form 205)
The Certificate of Formation is the official document that creates your Texas LLC. File it with the Texas Secretary of State either online through SOSDirect or by mail.
The form requires: your LLC name, registered agent name and address, management structure (member-managed or manager-managed), organizer name and address, and the LLC's governing authority. The filing fee is $300, payable by credit card (online) or check (mail).
Tip: Choose "member-managed" if all owners will participate in day-to-day operations. Choose "manager-managed" if you want designated managers (like a board of directors) while other members are passive investors. Most small LLCs choose member-managed.
Create an operating agreement
Texas does not legally require an operating agreement, but you should have one. This internal document defines: ownership percentages, profit and loss distribution, voting rights and decision-making procedures, what happens when a member leaves or dies, and how the LLC can be dissolved.
Banks typically require an operating agreement before opening a business account. It also strengthens your liability protection by demonstrating that your LLC operates as a separate entity from your personal affairs.
Get an EIN from the IRS
An Employer Identification Number (EIN) is your LLC's federal tax ID. You need it to open a business bank account, file taxes, and hire employees. Apply for free at IRS.gov — it takes about 5 minutes and you receive your EIN immediately.
Warning: Some formation services charge $70–$99 for EIN filing. The IRS provides this for free. Eleet AI offers it as an optional $49 add-on for those who prefer we handle it, but we always tell you that you can do it yourself at no cost.
Stay compliant: annual reports & franchise tax
Texas LLCs must file two annual reports by May 15 each year:
- 1. Franchise Tax Report — Even if your revenue is under $2.47M and you owe $0, you must file. Failure to file results in forfeiture of your LLC's right to do business in Texas.
- 2. Public Information Report — Updates the Comptroller on your LLC's officers, directors, managers, and registered agent. Filed alongside the franchise tax report.
Note: New LLCs formed after October of the current year may not need to file until May of the following year. Check the Texas Comptroller's website for your specific first filing deadline.
Texas LLC Cost Breakdown
What you'll actually pay — no surprise fees, no hidden add-ons.
| Item | DIY Cost | Eleet AI |
|---|---|---|
| State filing fee (Certificate of Formation) | $300 | Included |
| Formation service fee | $0 (you do it) | Included |
| Registered agent (first year) | $0 (if you serve) / $125+ | Included |
| EIN application | Free (IRS.gov) | $49 optional |
| Total | $300–$425+ | $499 |
Eleet AI's $499 includes everything: formation filing, $300 state fee, and registered agent. No upsells, no hidden fees.
Why Form an LLC in Texas?
No personal income tax
Texas is one of 9 states with no personal income tax. LLC members keep more of their earnings compared to states like California (13.3%) or New York (10.9%).
Strong asset protection
Texas has strong charging order protection for single-member LLCs, meaning creditors of an LLC member generally cannot seize the LLC's assets to satisfy personal debts.
Business-friendly courts
Texas has a well-developed body of business law and courts experienced in resolving commercial disputes. The Texas Business Organizations Code provides clear LLC governance rules.
No franchise tax for most small LLCs
The franchise tax only applies to businesses with revenue exceeding $2.47 million. The vast majority of small LLCs pay $0 in franchise tax — just file the report.
Texas LLC — Common Questions
How much does it cost to start an LLC in Texas?
The Texas Secretary of State charges a $300 filing fee for a Certificate of Formation. If you file yourself, that is the only mandatory cost. If you use a formation service, add the service fee: Eleet AI charges $499 total (which includes the $300 state fee, formation filing, and first-year registered agent service). Other services like LegalZoom charge $0–$249 for the formation but add the $300 state fee, registered agent ($125–$299/yr), and upsells separately — real total is typically $425–$850+.
How long does it take to form an LLC in Texas?
Online filings with the Texas Secretary of State are typically processed in 2–3 business days. Mail filings take 5–7 business days. Expedited processing is available for faster turnaround. Eleet AI offers expedited processing for an additional $25, which typically reduces processing to 1–2 business days.
Does Texas have a state income tax?
No. Texas has no personal income tax. This is one of the primary reasons entrepreneurs choose to form LLCs in Texas. However, Texas does have a franchise tax (also called the "margin tax") that applies to businesses with total revenue over $2.47 million. Most small LLCs will owe $0 in franchise tax, but you must still file the annual franchise tax report and public information report.
Do I need a registered agent in Texas?
Yes. Every Texas LLC must designate a registered agent with a physical street address in Texas. The registered agent receives legal documents (lawsuits, subpoenas) and official state correspondence on behalf of your LLC. You can be your own registered agent if you have a Texas address and are available during business hours, but most owners use a professional service for privacy and reliability. Eleet AI includes first-year registered agent service with every Texas LLC formation.
Can I form a Texas LLC if I don't live in Texas?
Yes. Texas does not require LLC members or managers to be Texas residents. You can form a Texas LLC from any state or country. You will need a registered agent with a physical Texas address, which Eleet AI provides. Many non-residents form Texas LLCs for the favorable business climate, no income tax, and strong legal protections.
What is the Texas franchise tax?
The Texas franchise tax (margin tax) is a tax on businesses operating in Texas. For LLCs, the tax rate is 0.375% (retail/wholesale) or 0.75% (other businesses) on taxable margin. However, businesses with total revenue under $2.47 million owe no tax. Additionally, there is a $1,230,000 standard deduction available. Most small LLCs pay $0 in franchise tax. You must still file the annual franchise tax report and public information report by May 15 each year, even if you owe nothing.
What is a Certificate of Formation?
A Certificate of Formation (Form 205) is the official document filed with the Texas Secretary of State to create your LLC. It includes your LLC name, registered agent information, management structure (member-managed or manager-managed), organizer details, and the LLC's purpose. Once approved, the Secretary of State issues a file-stamped copy as proof your LLC legally exists.
What do I need to do after forming my Texas LLC?
After the Secretary of State approves your Certificate of Formation: (1) Apply for an EIN at IRS.gov (free, takes 5 minutes online), (2) Open a business bank account using your EIN and Certificate of Formation, (3) Draft an operating agreement defining member roles, profit distribution, and decision-making, (4) Obtain any required local business licenses or permits, (5) Set up business accounting and tax records. Mark May 15 on your calendar for the annual franchise tax report.
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$499 covers everything — formation, $300 state fee, and registered agent. No hidden fees.
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