Creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

Here are the five essential steps to forming an LLC in Texas:

  1. Choose a name
  2. Designate a registered agent
  3. File a Certificate of Formation
  4. Draft an operating agreement
  5. Obtain an EIN

If you want to form your LLC on your own, follow the step-by-step guide below. If you want to hire someone to save time and do it for you, then we recommend the following services.

Our picks for LLC formation services

ZenBusiness
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Visit ZenBusiness
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  • Same-day filing service
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Starting an LLC in Texas step-by-step

1. Select a name for your Texas LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the State of Texas:

  1. An LLC’s name must be distinguishable from the names of existing business entities on file with the Texas Secretary of State.
  2. An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”,  “L.L.C.”, “LC”, or “L.C.” The abbreviations “Ltd.” and “Co.” may be substituted for the words “Limited” and “Company”, respectively.

Check the availability of your LLC name

You may confirm that the name you’ve chosen for your LLC is available in the state by performing a search with the Texas Secretary of State website. Note that each search costs $1.

Need help coming up with a business name? Check out our free business name generator.

Reserve your LLC name with the Secretary of State

Reserving your LLC name is a good idea since it prevents another Texas business entity from making use of it before you legally form your LLC in the state. File an Application for Reservation or Renewal of Reservation of an Entity Name with the Texas Secretary of State online or by postal mail. There is a $40 name reservation filing fee.

Read more: How to perform a business name search in Texas

2. Designate a registered agent

As in every U.S. state, forming an LLC in Texas requires the appointment of a registered agent to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in Texas OR if the individual or business is based out-of-state, they must have a business office in Texas.

Our picks of the best registered agent services

  • ZenBusiness: There’s no need to stress about filing paperwork when you work with ZenBusiness. This company offers a great variety of LLC services, the focus of which is to ensure your business is set up correctly with the proper paperwork filled out and delivered to the right branch of your state government. Of course, ZenBusiness does charge for their services, but customers say they get the most bang for their buck.
  • Northwest Registered Agent: Starting a business requires a lot of state-mandated paperwork, which can be confusing for new business owners. Northwest offers business services that can help entrepreneurs find the right documentation, fill it out, and file it on time with the right government agency. In addition to helping you set up an LLC, Northwest has a host of additional services, like registered agent services, that new owners will find useful too.
  • Bizee: Bizee offers a great library of material to help first-time business owners figure out what kind of business they should set up. From there, Bizee will aid with documentation and filing procedures and demystify terms like registered agent, articles of organization, and EIN. The company has a strong reputation and great reviews online, too.
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Read more:  How to Find the Best Registered Agent in Texas

3. File a Certificate of Formation

An LLC is formed in Texas through the filing of a Certificate of Formation for a Limited Liability Company with the Texas Secretary of State.

The Certificate of Formation must provide the following information:

  • LLC’s name and chosen designation
  • Registered agent name and address
  • General purpose clause
  • Whether the LLC is member-managed or manager-managed (include every managers’ and members’ names and addresses)
  • The effective date of the certificate (if different than the filing date)
  • The name, address, and signature of the LLC organizer

You can file the certificate online or by mail. The filing fee is $300.

Foreign LLC registration

An LLC formed in a state other than Texas intending to do business in the state must register with the Texas Secretary of State. File an Application for Registration of Foreign Limited Liability Company with the Texas Secretary of State online or by postal mail. The filing fee is $750.

4. Draft an operating agreement

Although not a legally mandated step for forming an LLC in Texas, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

  1. Describe the LLC’s business structure
  2. Establish the individual responsibilities and obligations of LLC members
  3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN) 

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).

The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

What to do after LLC approval

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File a BOI Report

Effective January 1, 2024, the Corporate Transparency Act (CTA) mandates that most corporations, LLCs, and similar entities in the U.S. report their beneficial owners’ information to FinCEN. In Kansas, a beneficial owner is identified as someone with significant control or at least 25% ownership of the entity. Required information includes the owner’s name, birth date, address, and ID number from an approved document, along with its image.

Entities established or registered before the 2024 cutoff must file their initial reports by January 1, 2025.

For businesses formed in 2024, there is a 90-day window after confirmation of formation to file, while those established afterward have 30 days from their creation or registration date to comply. Filings are processed electronically via FinCEN’s BOI reporting portal.

Learn more about BOI Reporting.

Register with the Texas Comptroller of Public Accounts

LLCs active in Texas (including foreign LLCs) may be required to register with the Texas Comptroller of Public Accounts for the purpose of satisfying various state tax obligations. This includes LLCs that collect sales tax on retail goods and LLCs that have employees.

In most cases, you can register with the Comptroller in person at a tax office, online, or by postal mail. Forms are available at the Comptroller website.

Obtain business licenses and permits

LLCs doing business in Texas may be required to obtain state or local business licenses, permits, or certifications depending on the nature of their business and location.

Check out the Texas Department of Licensing and Regulation website and the Texas Business Licenses & Permits Guide for information on occupational licenses and permits in the state. Although local business licenses are uncommon in Texas, you should contact a city or county clerk in the area where your LLC is based for confirmation that one isn’t required in your area.

Read more: How to Get a Business License

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