How to Form an LLC in Texas

Step 1: Choose a Name That Meets Texas's Rules

Your Texas LLC name must contain "limited liability company," "limited company," or an abbreviation of one of these phrases, and must be distinguishable in the Secretary of State's records from the name of any existing filing entity, foreign registration, name reservation, or registered series. The organizer also affirms the name doesn't falsely imply a government affiliation. Check availability through the SOSPortal name search, or call the Secretary of State's office directly at (512) 463-5555 for a preliminary check. If you're not ready to file, reserve an available name for $40 using Form 501; the reservation lasts 120 days and can be renewed during the 30 days before it expires.

Step 2: Name a Registered Agent

Your registered agent must be either an individual Texas resident or an organization registered or authorized to do business in Texas, with a Texas street address for the registered office. The LLC itself cannot serve as its own registered agent, but an owner (member), officer, or employee of the LLC can, as long as they have a qualifying Texas address.

Step 3: File a Certificate of Formation

Texas calls its formation document a Certificate of Formation rather than Articles of Organization. File Form 205 with the Texas Secretary of State's Business & Public Filings Division for $300, the standard fee across most Texas entity types. File online through SOSPortal, the state's current online filing system, or by mail, fax, or in person. Texas doesn't publish a fixed standard processing time; the Secretary of State posts current turnaround dates on its Business Filing Tracker and encourages electronic filing for the fastest results. If you're on a deadline, expedited processing is available: $50 extra for standard expedited service (typically 2-3 business days), $500 extra for next-day service, or $750 extra for same-day service on filings received by noon.

Step 4: Get an EIN From the IRS

Once the Secretary of State approves your Certificate of Formation, apply for a free EIN from the IRS, usually issued immediately through the online application. Have your approved Texas filing information ready, since the EIN application asks for your LLC's exact legal name and formation date.

Step 5: Put a Company Agreement in Place

Texas calls what most states call an operating agreement a "company agreement." It isn't required by law and is never filed with the Secretary of State; keep it at your LLC's principal office. It should cover ownership percentages, management structure, and how profits and losses are allocated among members.

Step 6: Register for State Taxes

Texas has no personal income tax, so LLC profits passed through to members aren't taxed at the state level. If your LLC sells taxable goods or services, register for a Texas Sales and Use Tax Permit with the Comptroller of Public Accounts at no cost. If you plan to hire employees, register with the Texas Workforce Commission for an unemployment tax account within 10 days of becoming liable; Texas employers can choose whether to carry workers' compensation coverage, since it's optional for most private employers.

Step 7: File Your Franchise Tax Report and Public Information Report

Texas has no periodic report filed with the Secretary of State to keep an LLC administratively current. Instead, every LLC files a Franchise Tax Report and Public Information Report (Form 05-102) with the Texas Comptroller of Public Accounts by May 15 each year, starting the year after your LLC registers. For 2026-2027 reports, an LLC with annualized total revenue at or below $2,650,000 owes no franchise tax but must still file the Public Information Report; above that threshold, the rate is 0.375% for retail and wholesale businesses, 0.75% for other businesses, or 0.331% under the EZ computation. A report filed after May 15 owes a $50 penalty even if no tax is due, and failing to file the Public Information Report can forfeit your LLC's right to transact business in Texas. For the full picture of Texas's fees, taxes, and ongoing requirements, see our Texas LLC guide.

Don't Confuse the Franchise Tax Filing With an Annual Report

Because Texas has no traditional annual report filed with the Secretary of State, it's easy to assume there's no yearly compliance obligation at all. That's incorrect: the Franchise Tax Report and Public Information Report, filed with the Comptroller rather than the Secretary of State, serve the same role of keeping your LLC in good standing, and missing it carries real consequences.

Confirm Your Registered Agent Can't Also Be the LLC Itself

The Texas Secretary of State is explicit that an entity cannot serve as its own registered agent, though its own officers, owners, or employees can. Double-check this distinction before filing, since listing the LLC itself as its own agent is a common filing mistake.

Before You Dissolve, Clear Your Tax Status First

If you later want to terminate your Texas LLC, the Comptroller requires the LLC to satisfy all state tax filing requirements and obtain a Certificate of Account Status before the Secretary of State will accept a Certificate of Termination. Keep this in mind if you're forming the LLC with a planned end date or limited purpose.

Series LLCs Add Complexity Worth Discussing With an Attorney

While Texas authorizes series LLCs, structuring one correctly, so that each series's liabilities genuinely stay separate from the others, involves more than checking a box on the Certificate of Formation. Talk to a business attorney before relying on a series LLC structure for liability separation.

This Isn't Legal or Tax Advice

Texas's franchise tax thresholds and rates, series LLC rules, and foreign qualification requirements each have more detail than this overview covers. Talk to a tax professional about your specific revenue and franchise tax exposure, and a business attorney for anything beyond a straightforward single-member or evenly split multi-member LLC.