How to Form an LLC in Texas: Step-by-Step

Forming an LLC in Texas takes one core filing — a certificate of formation (Form 205) with the Secretary of State and a $300 fee — but doing it well takes a few more steps that protect the liability shield you’re forming the LLC to get. The certificate creates the entity; the company agreement, EIN, and clean separation of finances are what keep a court from disregarding it later. This guide walks the full process in order, and the obligations that follow formation.

A Texas LLC is the default choice for most small businesses because it pairs liability protection with pass-through taxation; if you’re still weighing structures, start with our overview of Texas business entities.

The Formation Steps

1. Name the LLC. It must be distinguishable from existing Texas entities and include “LLC” or “Limited Liability Company.” Check availability with the Secretary of State; you can reserve a name if you’re not ready to file.
2. Appoint a registered agent. Texas requires a registered agent with a physical Texas address who consents to accept legal documents for the LLC.
3. File the certificate of formation (Form 205). Filed with the Texas Secretary of State for $300, online via SOSDirect or by mail. This is the step that legally creates the LLC.
4. Adopt a company agreement. Texas’s term for the operating agreement (see below).
5. Get an EIN. Obtain a free federal Employer Identification Number from the IRS for taxes, banking, and hiring.
6. Open a business bank account and keep LLC finances strictly separate from personal funds.

The Company Agreement: Required in Practice, If Not by Law

Texas does not legally require an LLC to have a written company agreement, but operating without one is a mistake. The agreement sets ownership percentages, voting rights, how profits are distributed, management structure, and what happens when a member leaves, dies, or wants out. Without it, the LLC defaults to the gap-filling rules of the Business Organizations Code, which may not match what the owners actually intended — and in a multi-member LLC, that’s how partner disputes turn into lawsuits. Our guide to Texas LLC company agreements covers what to include.

After Formation: Keep the Shield Intact

Forming the LLC is the start, not the finish. To preserve the liability protection:

• Separate finances completely — a dedicated bank account, no mixing personal and business money. Commingling is the fastest way to let a creditor “pierce the veil.”
• File the franchise tax report annually. Most Texas LLCs are subject to the state franchise tax and must file with the Comptroller each year, though those under the no-tax-due threshold ($2,650,000 in annualized revenue for 2026) owe no tax and file a Public Information Report instead.
• Keep up local requirements — assumed-name (DBA) filings, permits, and licenses as your business needs them.

Frequently Asked Questions

How much does it cost to form an LLC in Texas?

The state filing fee for the certificate of formation (Form 205) is $300. Additional costs may include a registered-agent service and, if you use one, a formation or legal service — but the core state fee is $300.

Do I need an operating agreement for a Texas LLC?

Texas does not legally require one, but you should have a written company agreement. It defines ownership, voting, profit distribution, and exit rules; without it, the LLC is governed by the default provisions of the Business Organizations Code, which may not reflect the owners’ intentions.

How long does it take to form an LLC in Texas?

Online filings through SOSDirect are typically processed faster than mailed filings. Processing times vary with Secretary of State volume, and expedited processing is available for an additional fee.

Does a Texas LLC pay franchise tax?

Most do file. Texas LLCs are subject to the franchise tax and must file annually with the Comptroller, but those below the no-tax-due threshold ($2.65M annualized revenue for 2026) owe no tax and file a Public Information Report instead.

A properly formed and maintained LLC is the foundation of your liability protection. Reidel Law Firm forms Texas LLCs — certificate, company agreement, and EIN — on transparent flat fees. Form your Texas LLC the right way.