Forming a Texas LLC: from your name at the Secretary of State to May 15

Texas is where the firm is at home, and it's where many of our clients build their American business. A Texas LLC comes into being with a single form filed with the Secretary of State. After that, two agencies are in charge: the Secretary of State for company law and the Comptroller for franchise tax. Here is the process step by step, with the forms, fees and deadlines taken from the state's own sources.

1Texas: one statute, two agencies

Texas LLC law sits in the Texas Business Organizations Code (BOC), Title 3, Chapter 101. You form the company with the Secretary of State in Austin, which keeps the business register. State taxes are handled by a second agency, the Comptroller of Public Accounts. Once you know this split, the whole process makes sense: the Secretary of State wants the formation document and a Registered Agent, and the Comptroller wants a report every year.

A Texas LLC can have a single member or many. Members can be individuals, partnerships, corporations or entities of any other kind. The person who signs the formation document, the organizer, does not need to live in Texas; they only need to be at least 18 years old and legally competent, or be an entity.

This page explains what the law requires. You can order your company at Form a Texas LLC with Mount Bonnell Advisors, including Registered Agent, EIN, bank account application and ongoing support.

2Naming your Texas LLC

It all starts with the name. In the Secretary of State's register, it must be distinguishable from the names of all existing Texas entities and entities registered in Texas. The details are set out in the Secretary of State's administrative rules on name availability. The office will give you a preliminary answer by phone or email.

An LLC's name must contain the words "Limited Liability Company" or "Limited Company", or an abbreviation such as LLC. If you want to secure the name before formation, you can reserve it; the application costs $40.

A word on strategy: the state register only checks whether your name is distinguishable from other names in that register. It does not check whether a trademark is free or the matching domain is available. Sort out both before you file, because changing the name later means amending the Certificate of Formation.

3The Certificate of Formation, article by article

You form the LLC with the Certificate of Formation, Form 205 at the Secretary of State. You can file it online through SOSDirect or on paper. The fee is $300, and no notarization is needed. The content is brief and follows the statute.

3.1Article 1: Name and entity type

The name, following the rules in the previous section, and a statement that the entity is a limited liability company.

3.2Article 2: Registered Agent and registered office

The name of the initial Registered Agent and the street address of the registered office in Texas. The agent must have consented; the consent is not filed, but signing the form counts as a statement that it exists. The LLC cannot act as its own agent.

3.3Article 3: Management

The form asks whether the LLC has managers. If it does, the initial managers are listed with name and address; if not, the initial members are. This information is public. If you don't want your address in the register, factor that in when choosing between manager-managed and member-managed.

3.4Article 4: Purpose

The form provides for a general purpose: any lawful activity. The Secretary of State points out that other laws may require a narrower purpose for certain ventures.

3.5Mailing address, organizer, effectiveness

Since January 1, 2022, every Certificate of Formation lists an initial mailing address for the company. The Comptroller sends tax information and mail there, and it can be a PO box. One organizer is enough. The certificate takes effect on filing or on a later date, no more than 90 days after signing.

The table shows the Secretary of State fees a Texas LLC is most likely to meet during its life.

4The Company Agreement: Texas calls it something else

What other states call an operating agreement, the BOC calls a company agreement: any written, implied or oral agreement of the members about the affairs and management of the LLC. An agreement for a single-member LLC is valid too. It is not filed; the Secretary of State does not accept internal governing documents at all, and they stay at the company's principal office.

How much the agreement matters in Texas shows in the default rules that apply without one. Every person gets an equal vote at a meeting, regardless of their contribution. Profits and distributions are allocated by the agreed value of contributions as recorded in the company's records. New members can join only with everyone's consent, and a member can neither withdraw nor be expelled. The company agreement can be amended only with the consent of every member.

Texas lets you change almost all of these rules, and the statute also allows a series LLC, where the agreement sets up separate series of members, interests or assets. What belongs in a good agreement is covered in Operating agreement: what to include.

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5The Registered Agent in Texas

Every Texas entity, and every foreign entity registered in Texas, must continuously maintain a Registered Agent and a registered office in Texas. The agent can be a Texas resident or an organization registered in Texas other than the company itself. The registered office must be a street address where the agent can be served in person. It doesn't have to be the LLC's place of business, but it cannot be just a mail drop or an answering service. An organization acting as agent must have an employee on site during business hours.

If there is no agent, or the agent can't be found at the registered office, the Secretary of State becomes the company's agent for service. It can also terminate the company if, after notice, it fails to appoint an agent and registered office by the 91st day. Changing the agent costs $15. How the role works in other states is explained in Registered Agent and business address.

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6Franchise tax and the Public Information Report

A Texas LLC pays no annual fee to the Secretary of State and files no annual report there. Instead, it is taxable with the Comptroller: the franchise tax is a tax on the privilege of being formed or doing business as an entity in Texas. Single-member LLCs and series LLCs are expressly taxable too.

For most new companies, the tax is zero. For the 2026 and 2027 reports, the no-tax-due threshold is annualized revenue of $2,650,000; for 2024 and 2025 it was $2,470,000. Above it, the rate is 0.75 percent, or 0.375 percent for wholesale and retail, calculated on the margin. Up to $20 million in total revenue, you can choose the simplified EZ Computation at 0.331 percent. The table sums up the figures.

What matters is what's still due every year. Since the 2024 reports, a company below the threshold no longer has to file a No Tax Due Report, but it must still file the Public Information Report (Form 05-102) or the Ownership Information Report (Form 05-167). The Public Information Report lists the people serving as officers, directors and managers at the time of filing. It is due May 15; if that falls on a weekend or holiday, it's due the next business day.

If you don't report, you'll get mail: the Comptroller sends a notice of impending forfeiture of the right to do business in Texas, and later a notice of forfeiture of the registration. A company below the threshold can cure the problem by filing the missing information report.

7Sales tax if you sell in Texas

Texas levies a sales and use tax of 6.25 percent on retail sales, rentals and leases of most goods and on taxable services. Cities, counties, special purpose districts and transit authorities can add up to 2 percent on top, for a combined maximum of 8.25 percent.

You need a Sales Tax Permit if you do business in Texas and sell or lease tangible personal property there, or sell taxable services. One detail matters for founders from abroad: if an owner, partner, officer or director has no Social Security number, you can't apply online. Instead, you send Form AP-201 by email or fax. The Comptroller quotes two to three weeks until the permit arrives.

Once the permit is issued, the Comptroller tells you whether you file monthly, quarterly or annually. Monthly returns are due on the 20th of the following month. Each late return costs $50, and late payment carries a penalty of 5 percent up to 30 days and 10 percent after that. File and pay on time, and you may keep 0.5 percent of the tax. For how sales tax works in the other states, see Sales tax in the USA.

8No personal income tax, but federal taxes apply

The Texas Constitution bars the legislature from imposing a tax on the net income of individuals, and it expressly includes their share of the income of partnerships and other unincorporated associations. For members of an LLC taxed as a partnership or as a disregarded entity, that is a real location advantage.

Two things still apply. The LLC itself is subject to the franchise tax under the rules in the previous section. And federal taxes apply in Texas just as everywhere else: if your LLC runs a real business in the US, its profits are taxable there, and depending on the structure, the LLC and its members file returns with the IRS. When that happens and which forms follow is explained in Forming a US LLC with a permanent establishment.

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9The process in seven steps

In short, forming a Texas LLC looks like this. One: check the name and reserve it if you like. Two: appoint a Registered Agent with a Texas address and get their consent. Three: decide whether the members or managers will run the company. Four: file the Certificate of Formation (Form 205) and pay the $300 fee. Five: sign the Company Agreement and the organizational resolutions. Six: apply to the IRS for the EIN, the foundation for your bank account and taxes; more in Applying for an EIN. Seven: open your accounts and, if you sell in Texas, apply for the sales tax permit.

From then on, the calendar runs. By May 15 of the following year, and every year after that, your report goes to the Comptroller. Your federal returns depend on how your LLC is structured. If the LLC has a foreign owner holding at least 10 percent, the BE-13 report to the Bureau of Economic Analysis is also due within 45 days of formation; more in The BE-13 report.

How Texas compares with Delaware, Florida, Wyoming, California and New York is covered in Choosing the right state, and what a Texas LLC costs year after year in Annual costs of a US company.

10Texas up close

Filing a form takes no time. But building a business in Texas also means knowing the state: its cities, its economy, its people. Why Texas is the place in America for so many entrepreneurs from Europe is described in Texas: the startup state, and why the firm itself calls Texas home in Texas.

In short

• A Texas LLC is formed by filing the Certificate of Formation (Form 205) with the Secretary of State; the fee is $300, and no notarization is required.
• The name must be distinguishable from existing names and include "Limited Liability Company", "Limited Company" or an abbreviation.
• A Registered Agent with a street address in Texas is mandatory; the LLC cannot act as its own agent.
• The LLC is subject to the franchise tax. With annualized revenue of up to $2.65 million (reports 2026 and 2027), none is due, but the Public Information Report is still due every year by May 15.
• Texas levies no income tax on individuals, including their share of partnership income; US federal taxes apply alongside.

How we help you

• Form an LLCThe US LLC with a permanent establishment, turnkey in six states.
• Apply for an EINYour company's US tax ID, applied for by us.
• Sales taxRegistration and returns in the states where you have nexus.
• LLC and LP Tax ReturnForm 1065 and K-1 for your LLC or LP.
• Company formation consultationEntity type, state and tax consequences, before you commit.