How To Start An LLC In Texas: Complete Guide (2026)

Why Form an LLC in Texas?

Perhaps the main advantage of forming a limited liability company (LLC) is personal asset protection. When you go into business for yourself as a sole proprietor, you may be held personally liable for business debts.

An LLC establishes your business as a separate legal entity. If someone sues your business, they might recover assets from the company, but they typically won’t be able to pursue your personal assets.

Each state regulates LLCs differently, and if you have the option of forming your LLC in Texas, it could be worth considering for a number of reasons:

• Because there’s no state income tax, you shouldn’t owe state taxes on pass-through earnings.
• Your business generally won’t owe franchise tax if it earns under $2.65 million per year (for 2026 and 2027).
• You don’t have to live in Texas to establish a Texas LLC.

As a bonus, establishing your company as an LLC builds credibility and may lead to better growth opportunities.

Texas LLC Formation Requirements

Wondering how to start an LLC? Each state has a different process. If you want to establish your company in Texas, these steps can help you get started:

Choosing a Texas LLC Name

Your company name needs to be unique enough that customers won’t confuse it with another business. The Texas Secretary of State website maintains a database of business names.

You might wonder: “Can I change the name of my LLC after I create it?” Fortunately, you can. You’ll just need to submit a certificate amendment (Form 424) and pay an additional fee.

Appointing a Texas Registered Agent

Your LLC’s registered agent is someone who accepts government and legal correspondence on your company’s behalf. The registered agent must have a physical Texas address, and they must be available during business hours.

You may serve as your LLC’s registered agent if you wish. However, because mishandling documents could cause legal issues, many LLC owners decide to work with registered agent service providers instead.

Filing Your Certificate of Formation

An LLC’s certificate of formation, also called “articles of organization” in some states, is a document that officially creates your LLC. It usually includes these key details about your business:

• Your business’s legal name
• The address where your company does business
• Your registered agent and their address
• Your business’s main purpose
• Whether your LLC will be owner-managed or managed by an outside person
• The date the formation goes into effect

Your certificate of formation must be filed with the Texas Secretary of State. An easy way to file is on SOSDirect, the Texas Secretary of State website.

Writing Your LLC Operating Agreement

Like most states, Texas doesn’t require you to have an LLC operating agreement. However, creating one may help you and other members avoid confusion and misunderstandings.

In fact, drafting an operating agreement is advisable even if you have a single-member LLC, and it shows that you understand that the LLC is a separate legal entity from yourself.

Getting an EIN and Business Bank Account

Even if you don’t intend to hire anyone, your LLC still needs an employer identification number (EIN). This is a nine-digit number that works somewhat like a Social Security number for businesses. You will need it when you file taxes and when you open a business bank account.

Fortunately, getting your EIN is quick, easy and free. The IRS provides an online tool where you can get one in minutes.

Texas Licenses, Permits and Sales Tax

If your LLC will be selling taxable goods and services, you will likely need a sales tax permit from the Texas Comptroller.

There’s no statewide business license that applies across all sectors. Depending on your industry, you might need to obtain additional licenses and permits before your LLC can legally operate.

Annual Reports and Franchise Tax

Figuring out LLC taxes when tax season rolls around can be a challenge. But before you tackle income tax, you’ll need to consider franchise tax. This is an annual tax that businesses pay to be able to operate in Texas.

Many Texas LLCs end up not owing franchise tax at all. For 2026 and 2027, companies making under $2,650,000 per year generally don’t owe this tax.

Instead of requiring each LLC to file an annual report with the Texas Secretary of State, Texas calls for LLCs to create a Franchise Tax and Public Information Report (PIR) and submit it to the Texas Comptroller. If the LLC owes any franchise tax, the owner would submit that as well.

Cost to Start a Texas LLC

The bare minimum cost to start a Texas LLC is $300. This is the one-time state filing fee. However, you won’t owe an annual fee like you would in some states.

Choosing the Right Forms Matters

Establishing an LLC usually isn’t as involved as setting up a more complex company. But even seemingly small mistakes can slow down the process, cause confusion and lead to legal and financial issues.