CobaltProsper

How to start an LLC in Texas

By Brent Chudoba, editor Updated

Forming an LLC in Texas costs $300 to file the Certificate of Formation (Form 205) with the Texas Secretary of State. There is no annual report fee. Texas also charges a franchise or business tax (details below). The $300 filing fee is the only real up-front cost. Most new LLCs owe no franchise tax because they fall under the $2.65M revenue threshold.

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

Texas LLC costs (reviewed August 29, 2026)
ItemCost
Filing fee (Certificate of Formation (Form 205))$300
Annual reportNone
Franchise or business taxYes, see below
Registered agentRequired

Source: Texas Secretary of State, fee schedule reviewed August 29, 2026.

What are the steps to form an LLC in Texas?

  1. Name your LLC. Pick a name that is available and meets Texas naming rules, then check it against the Secretary of State's business database.
  2. Appoint a registered agent. Texas requires a registered agent with a physical in-state address to receive legal mail. You can be your own agent, or hire a service.
  3. File the Certificate of Formation (Form 205). Submit it to the Texas Secretary of State and pay the $300 fee. This is the step that legally creates the LLC.
  4. Get an EIN from the IRS. It is free and takes minutes. Do not pay a service for it. See how to get an EIN free from the IRS.
  5. Open a business bank account. Keep business money separate from personal money so your liability protection holds up.

Does Texas have a franchise tax on an LLC?

Texas LLCs pay franchise tax to the Comptroller, but only above a no-tax-due threshold of $2,650,000 in total revenue (2026-2027). Below that you file an information report and owe nothing. Above it, the rate is 0.375% for retail/wholesale or 0.75% for other businesses.

How is an LLC taxed in Texas?

By default, an LLC is a pass-through entity: it pays no income tax itself, and the profits flow to the owners' personal returns. Texas has no state individual income tax, so those pass-through profits face no state income tax, only federal tax. That is one reason Texas is a popular state to form in.

An LLC can also elect to be taxed as an S-corp, which changes how owners pay self-employment tax. See LLC vs S-corp vs sole proprietorship and how self-employment tax works.

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