Form an LLC in Texas — Everything You Need to Know
A practical, no-nonsense guide to forming a limited liability company in Texas. We cover the actual requirements, real costs, and what nobody else tells you.
Texas LLC at a Glance
State Filing Fee
$300
Processing Time
10 business days
Annual Report Fee
None
Franchise/Annual Tax
None
State Income Tax
No
Member Disclosure
Public
Texas is Best For
Privacy & Protection Features
- ✓Charging order is exclusive remedy — Creditors cannot force liquidation or take control of LLC assets. This is the strongest form of asset protection.
Series LLC Available in Texas
Texasallows Series LLCs, which let you create multiple "series" or cells within a single LLC. Each series can have its own assets, members, and liabilities — all isolated from other series. This is particularly useful for real estate investors who want separate liability protection for each property without forming multiple LLCs. You file (and pay) once for the parent LLC, then create series internally through your operating agreement.
Texas-Specific Requirements
- !Must file annual public information report with the Comptroller (even if no tax owed)
- !Franchise tax return due by May 15 each year
- !Members/managers are listed in the Certificate of Formation
Requirements to Form an LLC in Texas
Forming an LLC in Texas requires a few key things. Here is what you actually need — no unnecessary legal jargon:
- 1A unique business name. Your LLC name must be distinguishable from other entities registered in Texas. It must include "LLC," "L.L.C.," or "Limited Liability Company."
- 2A registered agent. Someone with a physical address in Texas who can receive legal documents on behalf of your LLC. You can be your own agent if you have an address in the state, or you can use a service like Sedes.
- 3Articles of Organization. This is the formation document you file with the Secretary of State along with the $300 filing fee. It includes your LLC name, registered agent, management type, and purpose.
- 4An operating agreement. While not legally required in Texas, an operating agreement is essential. It defines how your LLC is managed, how profits are split, and what happens if things go sideways.
- 5An EIN (Employer Identification Number). Your LLC's tax ID from the IRS. Free to obtain. Required for opening a business bank account, hiring employees, and filing taxes.
How Much Does It Cost?
| Item | Cost | Frequency |
|---|---|---|
| State Filing Fee | $300 | One-time |
| Expedited Processing (optional) | $25 | One-time (5 days) |
| Registered Agent Service | $49/year | Annual (with Sedes) |
| EIN | $0 | One-time (free from IRS) |
| First Year Total | $349 | with Sedes RA |
| Annual Ongoing Cost | $49/year | with Sedes RA |
Note: Franchise (margin) tax applies only to entities with total revenue over $2.47M. Rate is 0.375% for retail/wholesale, 0.75% for other businesses. Below $2.47M, no franchise tax is owed.
State fees are paid directly to Texas. Sedes's formation service starts at $0 + state fees.
How Long Does It Take?
Standard Processing
10 business days
State filing fee only ($300)
Expedited Processing
5 business days
Additional $25 fee
Pros & Cons of a Texas LLC
Advantages
- +No state personal income tax
- +No annual report required
- +Series LLC available
- +Charging order is exclusive remedy (strong asset protection)
- +Franchise tax only kicks in above $2.47M revenue
- +Largest state economy after California
Disadvantages
- -Filing fee is one of the highest ($300)
- -Franchise (margin) tax applies to larger businesses
- -Members are disclosed in formation documents
- -Must still file a no-tax-due public information report annually
What You Should Know About Texas LLCs
The Texas franchise (margin) tax technically applies to all businesses, but entities with total revenue under $2.47M owe nothing. You still must file a public information report and no-tax-due form annually with the Comptroller, even if you owe no tax.
Step-by-Step: How to Form an LLC in Texas
Choose your LLC name
Search the Texas Secretary of State business name database to make sure your desired name is available. Your name must include "LLC" or "Limited Liability Company" and must be distinguishable from existing entities.
Appoint a registered agent
Your registered agent must have a physical street address in Texas (no P.O. boxes). They receive legal documents and state correspondence on your behalf. Sedes includes registered agent service with all plans.
File your Articles of Organization
Submit your formation documents to the Texas Secretary of State along with the $300 filing fee. You can file online or by mail. With Sedes, we handle the filing for you.
Create an operating agreement
Draft an operating agreement that outlines ownership percentages, management structure, profit distribution, and what happens if a member leaves. Even single-member LLCs should have one — it reinforces your liability protection.
Get your EIN from the IRS
Apply for an Employer Identification Number (EIN) on the IRS website. It is free and takes about 5 minutes online. You need this to open a business bank account and file taxes.
Open a business bank account
This is critical. Keeping your personal and business finances separate is what makes your liability protection real. Without it, a court could 'pierce the corporate veil' and hold you personally liable.
Stay compliant
Texas does not require an annual report, which reduces your compliance burden. Keep your registered agent current and file any required tax returns. Sedes's compliance calendar tracks all of this automatically.
Texas Secretary of State — Online Filing
File directly with the state or let Sedes handle it for you.
Frequently Asked Questions
How much does it cost to form an LLC in Texas?
The state filing fee is $300. Your estimated first-year total is $300 (state fees only). With Sedes, the formation service itself starts at $0 — you only pay the state fees.
How long does it take to get an LLC in Texas?
Standard processing takes approximately 10 business days after filing. Expedited processing is available for $25 (5 business days). With Sedes, we prepare and submit your filing within hours, but the state processing time still applies.
Do I need a lawyer to form an LLC in Texas?
No. Millions of LLCs are formed every year without a lawyer. For straightforward single-member or partnership LLCs, a formation service like Sedes can handle everything. If you have complex ownership structures, significant assets to protect, or need specific tax planning, consulting a business attorney is a good idea.
Can I form a Texas LLC if I live in another state?
Yes. Anyone can form an LLC in Texas regardless of where they live. However, if you plan to do business in your home state, you will need to register your Texas LLC as a foreign LLC there, which means paying fees in both states. For most people, forming in their home state is simpler and cheaper.
What is the difference between member-managed and manager-managed?
In a member-managed LLC, all owners (members) participate in running the business and making decisions. In a manager-managed LLC, one or more designated managers handle operations while other members are passive investors. Most small LLCs choose member-managed.
Do I need an operating agreement?
Texas does not legally require one, but you absolutely should have one. An operating agreement defines how your LLC works, protects your personal liability, and prevents disputes. Banks often require it to open a business account.
What is a Series LLC in Texas?
A Series LLC lets you create multiple "series" within a single LLC, each with its own assets, members, and liabilities. This is popular with real estate investors who want each property in its own protected series. Texas allows Series LLCs under its LLC statute.
Not sure if Texas is the right state for your LLC?
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