Starting an LLC in Texas: Costs, State Office, Taxes and Timeline

If you've decided to open a company in Texas, picked a name and already set aside $300 for the filing fee, that's only the beginning. The real difficulties are still ahead. Most of them come after the certificate is approved, when the state expects to hear from the LLC every year.

To start an LLC in Texas, you file a Certificate of Formation (Form 205) with the Texas Secretary of State and pay $300. From the start, you'll also need:

• a registered agent with a street address in Texas
• a federal tax number (EIN), which is free from the IRS
• a yearly report to the Texas Comptroller, due May 15

That May report is due even in years with no tax, and a missed one can reach the owners personally.

Before you file: the two offices you'll deal with

The first thing you notice is that Texas splits the work between two offices. The Secretary of State (SOS) works through its Corporations Section. With the formation document, the SOS does three things:

1. receives it
2. reviews it
3. puts the LLC on the public record

The Texas Comptroller of Public Accounts handles state taxes. Your yearly franchise tax filing goes there.

Knowing which office does what saves you time later. A change of registered agent goes to the SOS. Tax letters, notices about missed reports and questions about the franchise tax all come from the Comptroller.

Filling in Form 205 to start an LLC in Texas

Now you sit down with the form itself. In Texas the founding document is called the Certificate of Formation, Form 205. Many national guides say "Articles of Organization". That's the name other states use. So a guide that uses it for Texas was probably written with another state in mind.

The certificate is short. It states:

• the LLC's name
• the registered agent and the registered office address in Texas
• whether the LLC has managers or is run by its members
• an initial mailing address

You need at least one governing person. The SOS can't advise you on which management type to choose.

The mailing address has been required since January 1, 2022. The Comptroller sends tax letters to it. It can be a P.O. box or a street address. Since tax notices arrive there, pick an address that someone actually checks.

One organizer is enough to sign the certificate. The organizer can be a person aged 18 or older, or a company. The signature doesn't need a notary.

A Texas LLC exists without a time limit unless the certificate says otherwise. Texas also has no newspaper publication rule for new entities. The old rule was repealed in 2003.

Online filings now go through SOSPortal. The SOS launched it on September 29, 2026, and it replaced both SOSDirect and SOSUpload. You can still file by mail or in person in Austin.

In our work with clients, state filings are usually rejected because the business activity description is vague or incomplete. A rejected certificate has to be fixed and sent again. So give the activity description the same care as the name.

Choosing the name

The name you picked must be distinguishable from names already on the SOS records. The SOS can give a preliminary opinion on a name. But the final decision comes only when the certificate is filed.

The SOS itself advises against spending money based on that early check. So hold off on a logo, a domain and printed materials until the certificate comes back approved.

If you want to hold a name in the meantime, a name reservation lasts 120 days. You can renew it during the 30 days before it expires.

The registered agent and the registered office

Next, the form asks who your registered agent is. The agent receives lawsuits and official notices for the LLC. In Texas the agent can be one of these:

• a person who lives in Texas
• a company formed in Texas
• a company registered to do business in Texas

The LLC can't act as its own agent. The SOS can't serve as an agent either. And the agent has to agree to the role in writing or electronically.

The registered office must be a Texas street address where the agent can be served during business hours. A P.O. box doesn't qualify. The address also can't be only a mailbox or an answering service.

If you live in Texas, you can be your own agent at your own street address. Owners who live elsewhere usually hire a commercial agent, which charges a fee. The SOS doesn't keep a list of these companies.

If the LLC stops having an agent or a valid registered office, the SOS can terminate it involuntarily. Agent changes are filed with the SOS. You can't make them on the yearly Comptroller report.

Paying the bill: what it costs to start an LLC in Texas

With the form ready, you get to the payment page. The $300 filing fee is required. The other items depend on how you file and what you need.

Preclearance means the SOS reviews a draft without filing it. Online you can pay by card or by ACH. By mail or in person, the SOS takes a check or money order.

You've probably seen ads for a "free" Texas LLC. They're talking about the service fee. The $300 state fee is set by law, and the SOS needs it paid to file. It can't bill you later or take the fee in parts.

So a service that offers free formation still collects the state fee from you. It earns its money from other services it sells.

Waiting for the certificate: processing times and Texas Express

Once you've paid, the wait begins. The SOS doesn't publish a standard processing time for regular filings on the pages we checked. So any number you see in a guide is that guide's estimate. If the date matters, Texas Express is the official way to speed things up.

Formations have been part of Texas Express since April 2026. The SOS announced the full program on July 14, 2026.

A faster tier shortens the wait for a review. It doesn't guarantee approval. A certificate with errors can still be rejected, only sooner.

The LLC exists from the moment the SOS files the certificate. You can also choose a later effective date, up to 90 days after signing. The EIN is issued right away when you apply online with the IRS.

That filing date also starts a clock you may not notice. The first franchise tax period starts on the date the SOS registers the LLC. The Comptroller's own example is an entity registered on December 20, 2023. It files its first report in 2024. In practice, your first report is due May 15 of the year after you form.

The next spring: the Texas LLC franchise tax report

A few months later, the business is running and the Comptroller expects to hear from it. This is the part of a Texas LLC that causes the most trouble later.

Who pays franchise tax

Texas LLCs are subject to the franchise tax. It's a tax on entities formed in Texas or doing business there.

The no tax due threshold for the 2026 and 2027 report years is $2,650,000 in annualized revenue. An LLC at or below that amount owes no franchise tax. Above it, these rates apply:

1. 0.375% for retail and wholesale businesses
2. 0.75% for other businesses
3. 0.331% under the EZ computation, for revenue of $20 million or less, without deductions or credits

For the 2024 and 2025 report years the threshold was $2,470,000. Some guides still show that older figure. The thresholds, rates and filing options are all covered in Texas Franchise Tax: Threshold, Due Date and How to File.

The Public Information Report

Because the threshold is high, a young LLC like yours rarely owes franchise tax. It still has to file a report.

Texas dropped the No Tax Due Report (Form 05-163) starting with the 2024 report year. Now an LLC at or below the threshold files a Public Information Report, Form 05-102.

The PIR is due on the same date as the franchise tax report. You file it every year, even in years with no tax or no activity. An officer, a director or another authorized person signs it.

New businesses owned by qualifying veterans are the exception. They don't file the PIR during their first five years.

Deadlines, penalties and extensions

If May 15 falls on a weekend or holiday, the deadline moves to the next business day. In 2027 May 15 is a Saturday. So the deadline moves to Monday, May 17 (our own reading of the Comptroller's weekend rule).

For the first extension, you pay one of these by May 15:

• 90% of this year's tax
• 100% of last year's tax

A federal extension doesn't extend the Texas deadline. If a penalty has already been charged, you can ask for a waiver on Form 89-224.

Sales tax, permits and federal filings

If the LLC sells taxable goods or services, it collects Texas sales tax. The state rate is 6.25%. Cities and other local bodies can add up to 2%, so the highest combined rate is 8.25%. Sellers who pay on time get a 0.5% discount.

Texas has no general business license. Permits depend on the activity. The state publishes a 2026-2027 Texas Business Licenses and Permits Guide that lists them.

At the federal level, the EIN is free. And one older rule has gone away. Under the FinCEN rule effective August 14, 2026, LLCs formed in the US don't file a beneficial ownership (BOI) report.

Only companies formed abroad and registered in a US state still report. For more on the federal tax number, see What Is an EIN (Employer Identification Number)?.

A quiet year: what happens if the LLC does nothing

Now say the business slows down, or never really starts. The LLC sits unused, so you stop paying attention to it. But an LLC with no revenue and no activity still owes the yearly report. When the PIR or franchise tax report is missing, the Comptroller sends notices first.

For example, in July and August 2026 it mailed these:

• Form 05-211 (Notice of Intent to Forfeit) for missed 2026 requirements
• Form 05-213 (Notice of Forfeiture of Registration) for 2025

If the report still isn't filed, the LLC can forfeit its right to do business in Texas. A forfeited LLC can't sue or defend itself in a Texas court. Its officers, directors and members can also become personally liable for certain LLC debts.

That rule sits in sections 171.251, 171.2515, 171.252 and 171.255 of the Texas Tax Code. The $50 late penalty applies to each late report as well.

In our work with clients, we regularly see companies dissolved because state reports and taxes were missed. Reinstatement is often impossible or comes with a large penalty. Some owners end up forming a new company instead. And the bank account can become a problem if the bank isn't told what happened.

When a missed report makes owners personally liable

Forfeiture is the point where a missed report starts to affect you, not only the company. The Texas SOS says the liability of LLC owners is "generally limited to their investment". That limit is the main reason people form an LLC. But the word "generally" matters.

Forfeiture over a missed PIR or franchise tax report can make members personally liable for certain debts. Protection can also weaken in everyday cases like these:

1. you sign a personal guarantee for a loan or lease
2. you keep business and personal money in one account

This is general information. For a specific risk, a Texas attorney can tell you how the rules apply to you.

Second thoughts: the downsides of Texas

If you haven't filed yet, it's fair to weigh what Texas costs you. You pay the $300 filing fee in full when you file, and some states charge less. If you haven't chosen a state yet, Best State to Form an LLC: Fees, Taxes and When Your Home State Wins compares the options.

The yearly report to the Comptroller is due every May 15, even in years with no revenue. So a Texas LLC always has at least one filing a year.

Owners outside Texas also pay for a registered agent with a Texas street address. A mailbox address doesn't meet the rule.

Where owners trip up

Each rule above is clear on its own. Still, owners trip over them in predictable ways, at formation and in the years after:

• using a P.O. box or mailbox service as the registered office
• naming the LLC as its own registered agent
• skipping the PIR because no tax is due, the usual path to forfeiture
• looking for the No Tax Due Report, gone since the 2024 report year
• using the old $2,470,000 threshold instead of $2,650,000 for 2026 and 2027
• spending money on a name before the certificate is filed
• giving a mailing address nobody reads, so Comptroller letters go unanswered
• following old guides that send you to SOSDirect instead of SOSPortal
• paying unfamiliar letters about yearly filings without checking the sender

Real letters come from the SOS or the Comptroller. Comptroller notices carry form numbers such as 05-211.

Filing it yourself or getting help

Texas lets anyone file a Certificate of Formation. So the choice comes down to how much time and risk you want to carry yourself.

On a first attempt, rejections usually come from name conflicts, agent details or a vague activity description. Filing yourself is reasonable if you live in Texas and run a one-owner business. You also need to be fine working from official instructions.

Hiring help makes more sense in these cases:

• you live outside the US
• you have no SSN or ITIN for the EIN
• the LLC has several owners
• you want formation handled as part of a larger launch

You pay a service fee. In return you spend less of your own time and lower the chance of a rejected filing. The last case on that list is the work we do: forming the Texas LLC as part of a US launch for new owners.

If you're forming from outside the US

Living outside the US is one of the cases where help makes more sense. Texas itself doesn't stand in the way. The SOS confirms that Texas law doesn't limit who can form or own a Texas entity by citizenship or residency. Two things need planning.

First, the registered office must be a Texas street address. So most owners abroad use a commercial agent.

Second, the IRS online EIN application needs the SSN or ITIN of the responsible party. Without one, you can't apply online. The same goes when your main place of business is outside the US. Then you apply by phone, by fax or by mail.

Foreign owners also have extra federal filings, which are covered in Can a Non-US Resident Own a US LLC? What It Involves.

The certificate is back: what the LLC needs next

Wherever you live, the day the approved certificate arrives feels like the finish line. It brings the LLC into existence. To operate, most new Texas businesses also need an EIN. They also need a business bank account kept separate from personal money.

An operating agreement records ownership and management inside the company. It isn't filed with Form 205. You may also need these:

1. a sales tax permit, if the LLC sells taxable goods or services
2. an assumed name certificate, if it trades under another name
3. any permits the activity requires

Customers and partners will look the company up. So a public presence is part of the setup too. That usually means a Google Business Profile if the business qualifies and listings on maps and trusted directories. It also means a website or landing page and social media pages. The full list is in New Business Checklist: What to Do After Forming Your LLC.

What to do this month

Put a May 15 reminder in your calendar the day the certificate comes back. That report is the part to watch, every year, even with no revenue. Before you file, check that the registered office is a real Texas street address. Also make sure the mailing address is one someone reads.

If you live outside the US or have no SSN or ITIN, help with the filing lowers the chance of a rejection. For the tax side, Texas Franchise Tax: Threshold, Due Date and How to File goes into more detail.