
Franchise Tax 101: Understanding Your Obligations in Texas
Complete guide to Texas franchise tax: who pays, how to calculate, filing deadlines, penalties, and step-by-step instructions for 2025. Everything Texas business owners need to know.

Registering a business name in Texas costs $25 if you file an assumed name certificate (Form 503) with the Texas Secretary of State, or $300 if you register the name by forming an LLC (Certificate of Formation, Form 205). Sole proprietors skip the state entirely: their DBA goes to the county clerk, usually for $15 to $25. Which filing you need depends on your business structure, and none of them gives you trademark rights.
Key takeaways:
Texas has no single filing called "business name registration." What people mean by registering a name is one of three separate filings, each with its own form, fee, and legal effect. The same logic applies in most states (you file with the Secretary of State), but the forms and fees below are specific to Texas.
| Filing | Form | Fee (2026) | What it does |
|---|---|---|---|
| Legal entity name (LLC, corporation) | Form 205 (LLC) | $300 | Registers the name as your legal entity name; no new filing entity can take a name that isn't distinguishable from it |
| Assumed name / DBA | Form 503 (state) or a county form | $25 state; ~$15–$25 county | Lets you operate under a different name; grants no exclusive rights |
| Name reservation | Form 501 | $40 | Holds a name for 120 days before you file formation documents |
If you're about to form an LLC, you don't need a separate name registration: the name on your Certificate of Formation becomes your registered business name the moment the Texas Secretary of State accepts the filing. A DBA only enters the picture when you want to operate under a name different from your legal one, or when you're a sole proprietor with no state-registered entity at all.
Texas law requires a new entity name to be distinguishable in the Secretary of State's records from every existing filing entity, registered foreign entity, name reservation, and name registration. Check availability before you spend anything on branding. You have four options:
The Secretary of State makes the final availability determination only when it processes your actual filing. The office's own guidance warns: do not make financial expenditures or execute documents based on a preliminary clearance. Run the searches, but hold off on signage, packaging, and printed materials until your filing is accepted.
A Texas LLC name must contain the words "limited liability company" or "limited company," or an abbreviation such as "LLC," "L.L.C.," "LC," or "L.C." Beyond the required designator, Texas Business Organizations Code Chapter 5 and the Secretary of State's administrative rules impose three tests:
If your name fails these tests at filing, the Secretary of State rejects the document and you refile with a corrected name, so it pays to check the rules before submitting the $300 formation fee. Full formation steps, including registered agent and franchise tax setup, are in our guide to starting an LLC in Texas.
An assumed name certificate lets an existing business operate under a different name. Where you file depends entirely on your business structure, a distinction Texas codified in Business & Commerce Code Chapter 71.
Registered entities file Form 503 (Assumed Name Certificate) with the Texas Secretary of State. The details:
One rule surprises almost everyone: an assumed name certificate is not exclusive. The Secretary of State will happily accept multiple certificates for the exact same assumed name from different businesses. Filing a DBA tells the public who is behind a trade name; it does not stop competitors from using it.
If you operate without a registered entity, you file your assumed name certificate with the county clerk in the county where your business is located. Under Chapter 71, an individual needs a certificate when the business name does not include their surname: "Rodriguez Plumbing" run by Ana Rodriguez needs no filing, while "Hill Country Plumbing" does.
Worked example (Harris County): the assumed name filing fee is $15 for one owner plus $0.50 for each additional owner, and the certificate must be notarized (the clerk can notarize in person if you bring ID). The certificate is valid for the term you select, from 1 to 10 years. Fees and notarization rules vary slightly by county, so check your county clerk's schedule; most fall in the $15–$25 range.
A DBA, whether state or county, does not need an organizational identifier. "Hill Country Plumbing" is fine as an assumed name; you don't add "LLC" unless the underlying entity is one.
A name reservation holds a business name for 120 days before you form your entity. File Form 501 (Application for Reservation of an Entity Name) with the Texas Secretary of State for a $40 fee, online through SOSDirect at any hour or by mail.
Skip the reservation if you're ready to file formation documents now; the $300 Certificate of Formation locks in the name by itself. Reservations earn their $40 when you're waiting on funding, a partner agreement, or licensing before forming the entity.
An LLC or corporation changes its legal name by filing a Certificate of Amendment (Form 424) with the Texas Secretary of State for $150. The new name goes through the same availability check as a new entity: if it isn't distinguishable from an existing name, the amendment is rejected.
Before paying $150, consider the cheaper route: keep your legal name and file a $25 assumed name certificate for the new brand. Amendment makes sense when you want the legal identity itself renamed, on contracts, bank accounts, and state records.
After a name change, update in this order:
Registering a name in Texas is often mistaken for broader protection. Three limits matter:
A trademark protects the name as a brand identifier; name registration only records it. If the name is central to your business, layer the protections:
| Protection | Where to file | Fee (2026) | Scope |
|---|---|---|---|
| Entity name / DBA | Texas Secretary of State or county clerk | $25–$300 | Texas filing records only; no brand rights |
| Texas state trademark | Texas Secretary of State, Form 901 | $50 per class | Trademark rights within Texas; requires actual use in Texas |
| Federal trademark | USPTO | $350 per class (base application fee) | Nationwide rights |
Search the USPTO's trademark database at uspto.gov before committing to any name. Finding a conflict after you've registered, printed, and launched is the most expensive naming mistake a Texas business can make.
| Filing | Fee |
|---|---|
| Name availability search (SOSDirect) | $1.00 per search |
| Preliminary check by phone/email | Free |
| Name reservation (Form 501, 120 days) | $40 |
| LLC Certificate of Formation (Form 205) | $300 |
| Assumed name certificate, state (Form 503) | $25 |
| Assumed name certificate, county (sole props) | ~$15–$25 |
| Statement of abandonment of assumed name | $10 |
| Certificate of Amendment / name change (Form 424) | $150 |
| Texas trademark (Form 901) | $50 per class |
| Federal trademark (USPTO base fee) | $350 per class |
Registering the name is step one; the bookkeeping and tax work start the day you open for business. Jupid forms your Texas LLC for free, so you pay only the $300 state filing fee. From there, Jupid connects to your business bank account and categorizes every transaction automatically with 95.9% accuracy, and its AI accountant answers tax questions in WhatsApp or iMessage in real time, from deductible expenses to filing deadlines. You picked the name; Jupid handles the numbers behind it. Try Jupid.
This guide is for general educational purposes and does not constitute tax, legal, or accounting advice. Filing fees and rules are current as of July 2026 and can change; confirm with the Texas Secretary of State before filing. For advice specific to your situation, consult a qualified professional.

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Complete guide to Texas franchise tax: who pays, how to calculate, filing deadlines, penalties, and step-by-step instructions for 2025. Everything Texas business owners need to know.


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