How to Start an LLC in Texas
---|---------| | Filing Fee | $300 (standard processing) | | Processing Time | 5–7 business days (online) | | Minimum Members | 1 (single-member LLCs allowed) | | Residency Requirement | None for organizers or members | | Operating Agreement | Not legally required, but recommended | | Registered Agent | Required; must be Texas resident or authorized entity | | State Statute | Tex. Bus. Org. Code § 101.051 et seq. |
Frequently Asked Questions
Q: How long does it take to form an LLC in Texas?
Standard online filing takes 5–7 business days. The Texas Secretary of State offers expedited options: 2–3 business days for $50, next-day for $500, or same-day for $750 (Tex. Bus. Org. Code § 3.005).
Q: Do I need an operating agreement to form a Texas LLC?
No. An operating agreement is not legally required under Tex. Bus. Org. Code § 101.052. However, without one, Texas default rules apply: equal profit/loss sharing, member-managed structure, and unanimous consent for admitting new members. Most multi-member LLCs should have a written agreement to avoid disputes.
Q: Can a non-resident or foreign person form a Texas LLC?
Yes. Texas imposes no residency requirement on organizers or members. Foreign owners are allowed. You must, however, appoint a Texas resident (or authorized entity) as your registered agent with a physical Texas address (Tex. Bus. Org. Code § 5.201).
Step 1: Choose and Reserve Your LLC Name
Your LLC name must include one of these designators: "Limited Liability Company," "LLC," or "L.L.C." (Tex. Bus. Org. Code § 5.054). The name must be distinguishable from any existing entity on file with the Texas Secretary of State (Tex. Bus. Org. Code § 5.053). Certain words are restricted without special approval: Bank, Trust, Insurance, University, and College. If your desired name contains these, you'll need written consent from the relevant regulatory body.
How to Search and Reserve Your Name
Visit the Texas Secretary of State business search at https://www.sos.state.tx.us/corp/sosda/index.shtml and search your proposed name to confirm it's available and distinguishable. The search is free and takes minutes. Once you've confirmed availability, you can reserve the name for 120 days by filing a name reservation request for $40.
Name reservation is optional but recommended if you're not ready to file immediately. Once you file your Certificate of Formation, the reservation expires and your LLC name becomes official.
| Task | Cost | Duration |
|---|---|---|
| Name search | Free | Immediate |
| Name reservation | $40 | 120 days |
| Included in formation filing | Included in $300 fee | Effective upon filing |
Restricted Words and Special Approval
If your LLC name contains "Bank," "Trust," "Insurance," "University," or "College," you must obtain written consent from the appropriate state regulatory agency before filing your Certificate of Formation. The Texas Secretary of State will reject your filing if you use these restricted words without authorization. Contact the relevant agency (Texas Department of Banking, Texas Department of Insurance, etc.) to request written approval.
Doing Business Under a Different Name (DBA)
If you plan to operate under a name different from your registered LLC name, you must file a DBA (Doing Business As) statement. File Form 503 with the Texas Secretary of State and pay a $25 filing fee. For example, if your LLC is "Smith Consulting LLC" but you want to advertise as "Smith Business Solutions," you must file a DBA. Your DBA does not replace your LLC name on your Certificate of Formation—it is a separate filing that allows you to use an assumed name for business purposes.
Step 2: Appoint a Registered Agent and Office
Every Texas LLC must have a registered agent and registered office (Tex. Bus. Org. Code § 5.201). Your registered agent is the person or entity authorized to receive legal documents on behalf of your LLC. The registered office must be a physical street address in Texas—a P.O. Box does not qualify.
Your registered agent can be:
- An individual Texas resident
- A domestic or foreign entity authorized to transact business in Texas
- A member of your LLC (yes, you can serve as your own agent if you're a Texas resident)
The Texas Secretary of State cannot serve as your registered agent.
Selecting Your Registered Agent
If you're a Texas resident, you can act as your own agent at no cost. If not, you'll need to hire a registered agent service (typically $100–$300 annually) or appoint a Texas-resident co-owner. Whoever you appoint must consent in writing to serve. You can change your registered agent later by filing a Statement of Change of Registered Agent/Office for $15 (Tex. Bus. Org. Code § 5.201).
| Agent Type | Best For | Cost |
|---|---|---|
| Self (Texas resident) | Solo founders in Texas | $0 |
| Co-owner (Texas resident) | Multi-member LLCs | $0 |
| Registered agent service | Non-residents, privacy | $100–$300/year |
Registered Office Address Requirements
Your registered office must be a physical street address in Texas—not a P.O. Box. This address is where the Secretary of State will send official documents and legal notices on behalf of your LLC. The address becomes public record and appears on all filings with the Texas Secretary of State. Your registered office can be your business location, a home address (if you are the resident agent), or a commercial office space. The agent must be available during normal business hours to receive documents.
Step 3: File Your Certificate of Formation
The Certificate of Formation is your LLC's founding document. You'll file it with the Texas Secretary of State using the online filing system at https://www.sos.state.tx.us/corp/sosda/index.shtml. The filing fee is $300 (standard processing).
Required Information on Your Certificate of Formation
Under Tex. Bus. Org. Code § 3.005, your Certificate of Formation must include:
- LLC name with required designator (LLC, Limited Liability Company, or L.L.C.)
- Registered agent name and registered office address (physical, in Texas)
- Management structure: member-managed or manager-managed
- Names and addresses of initial members or managers
- Organizer name and address
- Initial mailing address of the LLC
- Purpose (you can state "any lawful purpose")
Filing Options and Timelines
| Filing Method | Processing Time | Cost |
|---|---|---|
| Online (recommended) | 5–7 business days | $300 |
| Up to 40 business days | $300 | |
| Expedited (2–3 days) | 2–3 business days | $300 + $50 |
| Next-day | 1 business day | $300 + $500 |
| Same-day | Same day | $300 + $750 |
File online for the fastest, most reliable processing. You'll receive an acknowledgment email confirming your LLC's existence once the filing is processed. Your LLC's existence commences when the filing takes effect (Tex. Bus. Org. Code § 3.002).
After You File
Once the Secretary of State approves your Certificate of Formation, your LLC is officially formed. You'll receive a filing confirmation that serves as proof of your LLC's existence. Keep this document for your records—you'll need it to open a business bank account, apply for an EIN from the IRS, and handle other business matters.
Step 4: Draft an Operating Agreement (Recommended)
While not legally required under Tex. Bus. Org. Code § 101.052, an operating agreement is essential for multi-member LLCs and highly recommended even for single-member LLCs. It governs how your LLC operates and protects your limited liability protection.
What Happens Without an Operating Agreement
If you don't have one, Texas default rules apply automatically. Profits and losses are shared equally among members regardless of capital contributions. The LLC is member-managed by default, meaning all members have equal management authority. Unanimous consent is required to admit new members. Fiduciary duties apply to members and managers unless modified by agreement under recent amendments (SB 29, 2025).
What to Include in Your Operating Agreement
Your operating agreement should address:
- Member names, ownership percentages, and capital contributions
- Management structure (member-managed vs. manager-managed)
- Profit and loss allocation
- Voting rights and decision-making procedures
- Buyout and exit provisions
- Dispute resolution procedures
- Amendment procedures
- Modifications to fiduciary duties (if desired)
Your operating agreement does not need to be filed with the Secretary of State—it's an internal document. However, all members are bound by its terms regardless of whether they sign it (Tex. Bus. Org. Code § 101.052).
Profit and Loss Allocation
Texas default law provides that profits and losses are shared equally among members, regardless of their capital contributions. Your operating agreement can override this by allocating profits and losses based on ownership percentages, capital contributions, or any other arrangement you choose. Document the specific allocation percentage for each member. For example, if Member A contributes 60% of capital and Member B contributes 40%, your agreement can allocate profits and losses accordingly—or use a different formula entirely.
Fiduciary Duties and Member Protections
Under Texas law, members and managers owe fiduciary duties to the LLC and other members unless your operating agreement modifies or eliminates those duties (Tex. Bus. Org. Code § 101.052, as amended by SB 29, 2025). A written agreement allows you to clarify the scope of these duties, reduce liability for certain actions, or eliminate them entirely if all members consent. For example, you can include language stating that members are not liable for decisions made in good faith within the scope of their authority, or that certain conflicts of interest are permitted.
Drafting Your Operating Agreement
You can draft your operating agreement yourself using templates, hire an attorney, or use online legal services. If your LLC has multiple members or significant capital, an attorney review is advisable to ensure the agreement complies with Texas law and protects your interests. At minimum, your agreement should be signed by all members and retained in your LLC records.
Consider hiring a Texas business attorney to draft your agreement if you have multiple members or complex ownership structures. Costs typically range from $300–$1,000.
Step 5: Obtain an Employer Identification Number (EIN) from the IRS
An EIN (also called a Federal Tax ID) is a nine-digit number the IRS uses to identify your business for tax purposes. Even single-member LLCs should obtain an EIN if they plan to hire employees or operate as a partnership for tax purposes.
When You Need an EIN
You are required to obtain an EIN if you have employees on payroll, operate as a multi-member LLC taxed as a partnership by default, elect S-corporation or C-corporation taxation, open a business bank account (most banks require it), or file certain federal business tax returns. A single-member LLC taxed as a sole proprietorship can use your Social Security Number instead, but obtaining an EIN is still recommended for privacy and liability separation.
How to Get Your EIN
Visit the IRS website at https://www.irs.gov/ein and apply online (fastest method—immediate confirmation). You can also call the IRS at 1-800-829-4933 or mail Form SS-4 to the IRS. The EIN is free and takes minutes to obtain online. You'll receive your number immediately upon approval. The IRS will mail a confirmation letter within 2–3 weeks.
| Application Method | Processing Time | Cost |
|---|---|---|
| Online (irs.gov/ein) | Immediate | Free |
| Phone (1-800-829-4933) | Same day | Free |
| Mail (Form SS-4) | 4–6 weeks | Free |
Information You'll Need
When you apply, have your Certificate of Formation and the following information ready: your LLC's legal name (as filed with the Texas Secretary of State), the physical address of your Texas registered office, your mailing address, the principal business activity code (the IRS provides a list), the date you expect to begin business operations, and the name and Social Security number of the LLC's responsible party (usually the managing member or manager).
Step 6: Open a Business Bank Account
Separating personal and business finances is critical to maintaining your LLC's liability protection. Open a dedicated business bank account in your LLC's name using your EIN.
What You'll Need
Bring your Certificate of Formation (filed copy or acknowledgment email), your EIN confirmation letter or number, government-issued ID, registered agent information, and your operating agreement (some banks request this). Most Texas banks (Chase, Bank of America, Wells Fargo, local credit unions) offer business checking accounts with no minimum balance or low monthly fees ($10–$25).
Why This Matters
Commingling personal and business funds can expose you to "piercing the corporate veil," where a court disregards your LLC's liability protection and holds you personally responsible for business debts. A separate account demonstrates that you're operating as a legitimate business entity. Keep all bank statements and transaction records for at least three years to support your tax return and demonstrate that you've maintained your LLC's separate financial identity.
Selecting Your Bank
Compare options based on transaction limits, online banking features, customer service, and fees. Many banks complete business account setup within 1–3 business days. Once your account is open, activate online banking to monitor your balance, transfer funds, and download statements for tax records. Establish a system for tracking deposits and expenses from day one—this simplifies quarterly estimated tax payments and your annual tax filing.
Step 7: Obtain Licenses and Permits
Texas does not require a general business license to operate an LLC. However, depending on your industry, you may need specific licenses and permits.
Common Licenses and Permits for Texas LLCs
| License/Permit | Issuing Authority | When Required |
|---|---|---|
| Sales tax permit | Texas Comptroller | If you sell taxable goods or services |
| Food establishment permit | Texas DSHS | Food service, restaurants, catering |
| Alcohol license | Texas Alcoholic Beverage Commission (TABC) | Sale of beer, wine, or spirits |
| Professional license | State licensing boards | Law, accounting, real estate, contracting |
| Building/construction permit | Local city/county | Construction, renovation, demolition |
| Home occupation permit | Local city/county | Operating from a residential address |
How to Determine What You Need
Identify your industry and business activities. Check the Texas Department of Licensing and Regulation (TDLR) at https://www.tdlr.texas.gov. Contact your city and county clerk's offices. Consult your industry's state licensing board. The TDLR maintains a comprehensive database of all regulated professions and occupations in Texas.
Sales Tax Permit (Most Common)
If you sell taxable goods or services in Texas, you must register for a sales tax permit with the Texas Comptroller of Public Accounts. Registration is free and takes 5–10 minutes online at https://comptroller.texas.gov. You'll receive your permit number immediately. This permit is required before you make your first taxable sale, and failure to register can result in penalties.
Professional Licenses
Texas regulates numerous professions and occupations under the Texas Occupations Code. If your LLC provides professional services—such as accounting, engineering, law, medicine, real estate, or contracting—you and any employees must hold the appropriate state license. Each licensing board sets its own requirements, fees, and renewal schedules. Contact the relevant state board directly or search the TDLR website to confirm licensing requirements for your specific profession.
Industry-Specific Permits
Food service businesses must obtain a food establishment permit from the Texas Department of State Health Services before opening. Alcohol sales require a license from the Texas Alcoholic Beverage Commission (TABC), which involves background checks and local approval. Construction and building projects require permits from your local city or county building department. If you operate your LLC from your home, check with your city or county to determine whether a home occupation permit is required—many municipalities restrict home-based businesses or require special approval.
Timeline and Next Steps
Obtain your sales tax permit and EIN before your LLC begins operations. Professional licenses and industry-specific permits may take several weeks or months to process, so apply early. Local permits typically require 1–4 weeks for approval. Keep copies of all licenses and permits on file and monitor renewal deadlines—most licenses require annual or biennial renewal. Failure