How to Start an LLC in Texas (2026): Step-by-Step Guide

Published: May 2026 · Updated for the 2026 tax year

Starting an LLC in Texas is genuinely cheap and genuinely simple — file one form, pay $300, done — and the state never charges you an annual report fee on top. The catch is the franchise tax, which technically applies to every Texas LLC even though most owe $0, and which still requires a filing every May 15 that people forget about until they've lost good standing. This guide walks through every step, what a Texas LLC actually costs over time, how to form one from outside the US, and the deadlines that quietly suspend LLCs that miss them.

A note from Slava

I'm Slava, co-founder and CEO of Jupid. Before this I co-founded and scaled an AI-powered accounting platform to around $30M in revenue and more than 100,000 business users — the kind of company that ends up filing a lot of paperwork in a lot of states and watching customers trip over the same potholes again and again.

Texas is one of the best states to form an LLC in: $300 once, no annual report fee, no state income tax. It's also a state where the bookkeeping side bites people, because the franchise tax rules sound like they don't apply to a small business — "$2.65 million threshold, you're way under, ignore it" — and then a Public Information Report comes due, nobody files it, and the LLC loses good standing for a $50 penalty. Most "how to start an LLC in Texas" articles still quote the old $2.47 million threshold and skip the part where you have to register with the Comptroller and answer a questionnaire after you form.

So this guide does the things the others skip: it uses the current 2026 numbers, it adds up the real cost over time, it spells out the non-resident path, and it hands you a dated checklist for your first 90 days so the May 15 filing doesn't catch you. Everything here is current for 2026, with links to the official sources so you can verify before you file.

Texas LLC at a glance

Sources: Texas Secretary of State — Form 205 instructions, Texas Comptroller — franchise tax.

Should you actually form your LLC in Texas?

If you live in Texas and run your business from Texas, you should form your LLC in Texas. It's one of the cheapest states to start in and one of the cheapest to keep — no annual report fee, no state income tax, and $0 franchise tax for the vast majority of small LLCs. The usual "form in Wyoming or Delaware instead" advice doesn't help a Texas-based business: an out-of-state LLC that operates in Texas has to register here as a foreign LLC, which means a second filing, a second registered agent, and the same franchise tax obligation anyway. You pay more for more paperwork.

Forming elsewhere makes sense in a narrower set of cases: you genuinely don't operate in Texas, you have outside-investor expectations pointing to Delaware, or you're a non-resident with no US footprint weighing several no-income-tax states against each other. Our best state to form an LLC tool walks through the trade-offs, our Wyoming LLC guide covers the non-resident case, and our California LLC guide shows what the expensive end of the spectrum looks like by comparison.

For everyone else: Texas it is. Here's how.

How to start an LLC in Texas, step by step

1. Choose and check your LLC name

Your name has to contain "Limited Liability Company," "Limited Company," or one of the abbreviations — LLC, L.L.C., LC, or L.C. — and it has to be distinguishable from every other entity on the Secretary of State's records. It also can't be misleading about your purpose or imply a government affiliation. Search the SOS records through SOSDirect (it's $1 per search) before you get attached to anything, and check that a matching .com is available while you're at it. Need ideas or want to test a few options at once? Our Texas business name generator is built for that. You can reserve a name for 120 days with Form 501 for $40, but most people skip it and just file — the Certificate of Formation locks in the name anyway.

2. Appoint a Texas registered agent and get their Form 401-A consent

Every Texas LLC has to continuously maintain a registered agent and a registered office. The agent is either an individual who lives in Texas or an organization registered or authorized to do business in Texas — and it cannot be the LLC itself. The registered office must be a Texas street address; a P.O. box won't do. Since 2010, the named agent has to have consented in writing or electronically to the appointment, which is what Form 401-A ("Acceptance of Appointment and Consent to Serve as Registered Agent") documents — you keep it with your company records; it's not filed with the state. The agent's name and address become public record, which is one reason people who'd rather not publish a home address (and everyone who lives out of state) hire a commercial registered agent for roughly $100–$150 a year — that fee includes the consent paperwork.

3. File the Certificate of Formation (Form 205)

This is the step that creates your LLC. File Form 205 with the Secretary of State for $300. You have three ways to do it: the interactive SOSDirect portal, SOSUpload (you upload a completed PDF — the SOS describes it as faster than mail), or mail two copies plus a $300 check to P.O. Box 13697, Austin, TX 78711-3697. There's no fax filing for Form 205. If you pay by credit card online, the state adds a statutory 2.7% convenience fee — about $8 on the $300. On the form you'll list the LLC name, the registered agent and registered office, whether the LLC is member-managed or manager-managed (and the managers or initial members), the organizer, and the purpose.

Standard online processing has been running roughly one to two weeks lately, but the SOS doesn't commit to a timeline, so check current turnaround. If you need it faster, the classic $25 expedite fee bumps you up the queue, and the newer Texas Express program adds tiered paid options — standard-expedited, same-day, and next-day, with business formations made eligible for the fastest tiers in 2026. Texas Express pricing has been changing through the year, so confirm current rates on the SOS site before you pay. Once your filing is approved, save the file-stamped Certificate of Formation — your bank will ask for it. (If you'd rather not handle the filing yourself, you can start your Texas LLC free with Jupid — you still pay the $300 state fee, but there's no service markup.)

4. Get your EIN from the IRS

An EIN is your LLC's federal tax ID, and you need it to open a bank account, hire anyone, and file taxes. It's free, and the IRS recommends forming your state entity first, so do this after Form 205 is approved. Apply at irs.gov — with an SSN or ITIN, the online application takes a few minutes. Without one (common for non-resident owners), file Form SS-4 by fax, mail, or the IRS international phone line; see the non-resident section below. Never pay a third party for the EIN itself — the number is always free from the IRS.

5. Write a company (operating) agreement

Texas doesn't require an LLC to have an operating agreement — the Business Organizations Code calls it the "company agreement" — and you don't file it with the state. You still want one. It sets out ownership percentages, how profits are split, who can make decisions, and what happens when a member leaves. Banks ask for it when you open an account, lenders ask for it, and co-owners need it to avoid disputes. Even a single-member LLC should have one on file — it's part of how you keep the liability shield intact. A plain template is fine to start; attorney-drafted versions run $200–$1,000+ if your situation is complex.

6. Register with the Texas Comptroller and handle local licenses

Forming the LLC at the Secretary of State doesn't register you for taxes. Once your LLC exists, set up a franchise tax account and get your WebFile number through the Comptroller's eSystems, and complete the franchise tax questionnaire — missing this is a common reason new LLCs fall out of good standing even though they owe $0. If you sell taxable goods or services in Texas, apply for a free sales and use tax permit; the state rate is 6.25% with local add-ons up to 2% (8.25% combined max). Texas has no single statewide general business license, but cities and counties have their own permits, your industry may require an occupational license (food service, construction, childcare, real estate, alcohol), and if you hire employees you'll register for unemployment tax with the Texas Workforce Commission.

7. Calendar your annual franchise tax report and Public Information Report

Every Texas LLC is a taxable entity for franchise tax. The good news: if your annualized total revenue is $2.65 million or less for 2026, the tax you owe is $0. The separate No Tax Due Report (Form 05-163) was eliminated for reports due on or after January 1, 2024 — so most small LLCs don't file that anymore. What you do still file every year is a Public Information Report (Form 05-102), due May 15, through WebFile. Above the threshold, the rates are 0.375% for retail and wholesale or 0.75% for everyone else on taxable margin, with an EZ computation of 0.331% for entities at or under $20 million in total revenue. A late report — even a $0 one — draws a $50 penalty plus loss of good standing with the SOS. The deeper mechanics of franchise tax reporting live in our Texas franchise tax report guide — it was written for prior-year reports, so use the 2026 threshold above.

What a Texas LLC really costs, year by year

Most guides quote "$300 and you're done" and stop. Here's the fuller picture.

Year one

Every following year

The costs that surprise people. Commercial registered agent services auto-bill every year — easy to forget you signed up. If you formed in Texas but operate in another state (or the reverse), you'll need foreign qualification there: a duplicate filing fee, a duplicate registered agent, a duplicate annual report. The franchise tax questionnaire has to be completed after formation — not a fee, but a step people skip, and skipping it can cost you good standing. And a late Public Information Report is a $50 penalty even though the report itself is free, plus loss of good standing — which means you can't sue, can't enforce contracts, and aren't properly registered until you fix it, sometimes with a reinstatement fee on top.

DIY versus a formation service versus Jupid. Doing it yourself costs the $300 state fee, about 30–60 minutes on SOSDirect, and your home address on the public record if you serve as your own agent. A formation service charges $0–$300 on top of the $300 state fee — the "$0" packages still pass through the state fee and then upsell a registered agent and a "compliance" subscription, and they leave you to figure out the Comptroller side alone. Jupid forms your Texas LLC for free — you pay only the $300 state filing fee — and then handles the after-formation stack: EIN, company agreement, bookkeeping, the May 15 franchise tax and Public Information Report reminders, sales tax. To model the annual numbers for your situation, use our Texas LLC annual cost calculator.

Forming a Texas LLC as a non-resident or foreign founder

You can fully own and form a Texas LLC without being a US citizen or resident — Texas imposes no residency requirement on members or managers, and there's no state income tax, which is a real draw. The practical hurdles are a Texas registered agent, an EIN, a US bank account, and your federal and franchise tax filings.

Registered agent. A non-resident living abroad has no Texas address, so you must hire a commercial registered agent with a Texas street address — budget around $100–$150 a year. A foreign address or a P.O. box won't qualify.

Getting an EIN without an SSN. The IRS online EIN tool requires the responsible party to have an SSN or ITIN, so foreign founders generally can't use it. Instead, file Form SS-4: on line 7b, where it asks for the responsible party's SSN/ITIN/EIN, write "Foreign" — don't invent a number. Submit it by fax or mail, or call the IRS international EIN line (it's not toll-free), where someone outside the US can get the number over the phone. Check the current Form SS-4 instructions for the right fax and phone numbers, since the IRS changes them. Fax turnaround is usually about four business days; mail is about four weeks; phone is immediate. The EIN is free.

ITIN. You don't need an ITIN to form the LLC or get the EIN. You'll likely need one (Form W-7) when you have a personal US tax filing obligation or when a bank asks for it; ITINs are issued with a tax return attached or through an IRS Certifying Acceptance Agent and can take a couple of months.

The Form 5472 obligation — don't skip this. A single-member LLC owned by a non-US person is a "disregarded entity" that generally must file Form 5472 along with a pro-forma Form 1120 every year, reporting transactions between the LLC and its foreign owner. This is a federal requirement, separate from anything Texas asks for, and the penalty for missing it is $25,000. Almost no Texas LLC guide mentions it; build it into your annual calendar from day one.

US bank account. Most US banks want the owner physically present to open a business account, along with the file-stamped Certificate of Formation, the EIN confirmation letter, the company agreement, and a passport. Several fintech business-banking platforms onboard non-resident-owned US LLCs remotely — eligibility and policies change, so check current terms before relying on any of them.

Texas franchise tax — and "no income tax" doesn't mean "no US tax." A Texas LLC is a taxable entity for franchise tax no matter where its owner lives: $0 owed if annualized total revenue is $2.65 million or less for 2026, but the Public Information Report (Form 05-102) is still due every May 15, and non-residents miss it constantly. Federally, if your LLC is engaged in a US trade or business, the foreign owner has filing obligations of their own (Form 1040-NR for an individual, plus the Form 5472 filing above), and withholding rules may apply. A cross-border tax professional is worth the money here.

Registered agents and the Corporate Transparency Act (BOI)

Your registered agent is the person or company designated to receive lawsuits and official notices for the LLC, at a Texas registered office that has to be an actual street address. It has to be an individual Texas resident or an organization authorized to do business in Texas — and not the LLC itself — and the agent must have consented in writing, which is what Form 401-A documents (you keep that form; you don't file it). Because the agent's name and address are public record, plenty of Texas residents hire a commercial agent purely to keep a home address off the record.

On the federal beneficial-ownership side: under the Corporate Transparency Act, LLCs were originally required to file a Beneficial Ownership Information (BOI) report with FinCEN. That changed. FinCEN's interim final rule, issued in March 2025, redefined a "reporting company" to mean only entities formed under foreign law that register to do business in a US state. As of early 2026, that means a Texas-formed LLC — even one with foreign owners — has no BOI filing obligation. FinCEN has said it intends to finalize the rule, so this could shift; check fincen.gov/boi before you assume one way or the other. (If you register a foreign-formed entity to do business in Texas, that entity may have its own BOI obligation — different situation.)

Your first 30, 60, and 90 days

Days 1–30

• Save the file-stamped Certificate of Formation from the SOS — you'll need it everywhere.
• Get your EIN from the IRS (free; online if you have an SSN/ITIN, otherwise Form SS-4 by fax, mail, or phone).
• Check your BOI status. As of early 2026 a domestic Texas LLC has nothing to file with FinCEN; re-verify at fincen.gov/boi.
• Draft and sign your company (operating) agreement — even for a single-member LLC — and confirm your Form 401-A registered-agent consent is on file.
• Open a dedicated US business bank account (Certificate of Formation, EIN letter, company agreement, ID), and set up bookkeeping from day one — separate finances are part of what keeps the liability shield intact.

Days 30–60

• Register with the Texas Comptroller: set up your franchise tax account, get your WebFile number through eSystems, and complete the franchise tax questionnaire. Missing this is a common cause of falling out of good standing.
• If you sell taxable goods or services in Texas, apply for a free sales and use tax permit and set up sales-tax tracking.
• Get any local permits and industry or occupational licenses your work requires. If you'll hire, register for unemployment tax with the Texas Workforce Commission and set up payroll.
• Look into business insurance, and consider an S-corp election (IRS Form 2553) once profit is consistently in the ~$40k–$50k+ range.

Days 60–90 — and the deadline that matters

• Calendar your annual filing: the franchise tax report and the Public Information Report (Form 05-102) are due May 15 every year. Your LLC's first one is generally due May 15 of the year after the year you formed — confirm the exact initial-report timing in the Comptroller's 2026 franchise tax instructions.
• Reconcile your books for the quarter; if you have net self-employment income, plan for federal quarterly estimated taxes (there's no Texas equivalent).
• Set recurring reminders for registered-agent renewal, permit renewals, and the May 15 filing. If you operate in another state, check whether you need to register there as a foreign LLC.

Common mistakes with Texas LLCs

Assuming the franchise tax doesn't apply because you're small. Why it hurts: the $2.65 million threshold means $0 tax, but the Public Information Report is still mandatory every May 15, and skipping it is a $50 penalty plus loss of good standing — which freezes your ability to do business and enforce contracts. Fix: calendar the May 15 filing the same week you register with the Comptroller.

Skipping the Comptroller registration entirely. Why it hurts: forming the LLC at the Secretary of State doesn't set up your franchise tax account or complete the questionnaire — and not doing so can cost you good standing even though you owe nothing. Fix: register through eSystems and finish the questionnaire within your first 60 days.

Thinking a Wyoming LLC dodges Texas requirements. Why it hurts: if you operate in Texas, the out-of-state LLC has to register here as a foreign LLC — a duplicate filing, a duplicate registered agent, and the same franchise tax obligation, on top of the other state's fees. Fix: if Texas is where you do business, form in Texas.

Using a P.O. box as the registered office, or quoting the old $2.47 million threshold. Why it hurts: Texas requires a physical street address for the registered office, so a P.O. box gets the filing rejected; and the no-tax-due threshold is $2.65 million for reports due in 2026, not the $2.47 million most older guides still cite. Fix: use a Texas street address or a commercial agent, and check the current threshold on the Comptroller's 2026 forms page.

How Jupid helps

Jupid forms your Texas LLC for free — you pay only the state's $300 filing fee, with no service markup and no surprise "compliance" subscription. After that, Jupid is your AI accountant, working in WhatsApp and iMessage the same way you already text. It connects to your business bank account, automatically categorizes your transactions (around 95.9% accuracy), keeps your deductions organized, and prepares your tax filings with CPA review before anything is submitted. For a Texas LLC, the $300 you'll just pay — but the franchise tax questionnaire, the May 15 Public Information Report, the sales tax filings, and clean books to back it all up are real work year after year, and that's the work Jupid does for you. Start your Texas LLC free with Jupid →

Frequently asked questions

How much does it cost to start an LLC in Texas in 2026? The state filing fee for the Certificate of Formation (Form 205) is $300. Paying by credit card online adds a 2.7% convenience fee — about $8. A $25 expedite fee is optional. Texas has no annual report fee, so a DIY Texas LLC is roughly $300 to start and $0 a year to maintain if you serve as your own registered agent and stay under the franchise tax threshold.

Does a Texas LLC have to pay franchise tax? Every Texas LLC is a taxable entity for franchise tax, but if its annualized total revenue is $2.65 million or less for 2026, the tax owed is $0. The separate No Tax Due Report was eliminated for reports due on or after January 1, 2024, but you still file a Public Information Report (Form 05-102) every year by May 15.

Do I need a registered agent for a Texas LLC? Yes. Texas requires every LLC to continuously maintain a registered agent and a registered office — a Texas street address, not a P.O. box. The agent can be an individual Texas resident or an organization authorized to do business in Texas; it can't be the LLC itself. The agent must have consented in writing, which is what Form 401-A documents (you keep it; it isn't filed with the state).

Can a non-US resident own a Texas LLC? Yes. Texas has no citizenship or residency requirement for LLC members or managers. You'll need a commercial registered agent with a Texas street address, an EIN (which you can get without an SSN), and you'll still file a Public Information Report every May 15. Texas has no state income tax, but federal filing obligations — including Form 5472 for a foreign-owned single-member LLC — still apply.

Does Texas require LLCs to publish a formation notice in a newspaper? No. Unlike New York, Arizona, and Nebraska, Texas has no newspaper publication requirement for LLCs. Once the Secretary of State approves Form 205, the formation step is done.

How long does it take to form an LLC in Texas? Standard online filing through SOSDirect has run roughly one to two weeks in recent practice, but the Secretary of State publishes no firm timeline, so check current turnaround before you rely on a date. A $25 expedite or a Texas Express same-day or next-day tier (formations became eligible in 2026) gets it done faster.

Official sources

• Texas Secretary of State — Form 205 instructions (Certificate of Formation, LLC) ($300 fee, 2.7% card fee, mail address, registered-agent rules)
• SOSDirect — online filing portal ($1 name search, fee schedule)
• Texas Secretary of State — filing options (filing methods, $25 expedited handling)
• Texas Secretary of State — Texas Express expedited services (tiered same-day / next-day options — verify current pricing and eligibility)
• Texas Secretary of State — Form 401-A instructions (registered-agent consent)
• Texas Comptroller — franchise tax (who must file, May 15 due date, penalties)
• Texas Comptroller — 2026 franchise tax report forms ($2.65M no-tax-due threshold, No Tax Due Report eliminated, Public Information Report still required)
• Texas Comptroller — 2026 franchise tax instructions (Form 05-915) (filing details, due dates, initial-report timing)
• Texas Comptroller — sales and use tax (6.25% state rate + up to 2% local, free permit)
• Texas Comptroller — eSystems / WebFile (franchise tax account, WebFile number, sales tax permit)
• IRS — get an EIN · Instructions for Form SS-4 · About Form 5472
• FinCEN — Beneficial Ownership Information
• Related on Jupid: Texas LLC formation · Texas LLC annual cost calculator · Texas franchise tax report guide · best state to form an LLC · what you need to start an LLC

This guide is general information, not legal or tax advice. Fees, deadlines, and thresholds change — verify with the official sources above before you file.

Last updated: May 2026.