Form a Texas LLC

Go to direct.sos.state.tx.us and use the "Name Availability" search to check if your desired LLC name is distinguishable from existing Texas entities. You can also search the Texas Comptroller's database at mycpa.cpa.state.tx.us.

Texas requires your name to include "Limited Liability Company," "LLC," or "L.L.C." It must be distinguishable from other entities on file. You can reserve a name for 120 days by filing Form 501 ($40).

Texas requires a registered agent (individual or entity) with a physical street address in Texas. The registered agent must be available during business hours to receive legal documents.

You can act as your own registered agent if you have a Texas address, or use a professional service ($50–$200/year). EntityEngine includes registered agent service with formation packages.

Go to direct.sos.state.tx.us (SOSDirect), create an account, and select "Formation" → "Domestic Limited Liability Company." The interactive form walks you through: LLC name, registered agent, organizer information, governing authority (members or managers), and purpose.

The filing fee is $300. Credit card payments include a 2.7% convenience fee. You can avoid the surcharge by paying via ACH. Expedited processing is available for $50 extra (2–3 business days) or premium same-day/next-day options at higher fees.

You can also file by mail. Download Form 205 from sos.texas.gov/corp/forms, complete it, and mail with a check payable to "Secretary of State." Mail filings take 5–7 business days for standard processing.

Veteran-owned businesses may qualify for a fee waiver on the $300 filing fee — check the SOS website for eligibility requirements.

Texas calls the operating agreement a "company agreement" in its Business Organizations Code, but "operating agreement" is the universally used term. It is not legally required but is strongly recommended.

Your operating agreement should cover: member names and ownership percentages, capital contributions, profit/loss allocation, management structure, voting procedures, and dissolution procedures.

Apply for a free EIN at irs.gov. Select "Limited Liability Company" and "Texas" as the state of formation. The online application takes about 5 minutes and issues your EIN immediately.

Bring your Certificate of Formation (stamped by the SOS), EIN confirmation letter, operating agreement, and photo ID. Texas has a large banking industry — plenty of in-person and online options.

Texas has no personal income tax and no corporate income tax. However, Texas imposes a franchise tax ("margin tax") on LLCs with revenue above approximately $2.47 million. Below that threshold, you file a No Tax Due Report (Form 05-163) — but you still must file.

If your LLC sells taxable goods, register for a Texas Sales and Use Tax Permit at comptroller.texas.gov. Registration is free. Texas's state sales tax is 6.25% with local add-ons up to 2%.

If you have employees, register for Texas unemployment insurance with the Texas Workforce Commission.

Texas does not have a separate annual report fee, but you must file a Public Information Report (PIR) alongside your annual franchise tax return by May 15 each year.

The PIR updates the state with current officer/director information, registered agent, and principal office address. It is filed with the Texas Comptroller (not the Secretary of State) as part of the franchise tax return.

For LLCs under the revenue threshold: file Form 05-163 (No Tax Due Report) + PIR. For LLCs above the threshold: file Form 05-158/05-159 with the applicable tax calculation.