How to Form an LLC in Texas, Step by Step
Texas forms its LLCs with one form, the Certificate of Formation. Here is each step, from the name rule to the $300 filing fee.
Texas keeps the path to an LLC short. One form starts the company. A few follow-up steps finish the job. These are the steps to set up a Texas LLC, one by one.
What an LLC is
The IRS says a Limited Liability Company is a business structure allowed by state statute. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. Most states also permit single-member LLCs, those having only one owner.
The SBA's guide says an LLC lets you take advantage of the benefits of both the corporation and partnership structures. Profits and losses can pass through to your personal income without facing corporate taxes. Members count as self-employed and must pay self-employment tax toward Medicare and Social Security. An LLC can also protect your personal property from lawsuits, though that protection has limits.
Step 1: Pick a name that follows the Texas naming rule
Texas has a rule for LLC names. The Texas Secretary of State says a limited liability company name must contain "limited liability company," "limited company," or an abbreviation of one.
Check the name before you file.
Step 2: Choose an initial registered agent
Texas uses the term initial registered agent. The Texas Secretary of State says that agent may be an individual resident of the state.
Pick someone who keeps regular hours and a steady address. See our page on an LLC's registered agent.
Step 3: File the Certificate of Formation with the Texas Secretary of State
Filing this form is what brings the LLC into being. Texas calls its form the Certificate of Formation. The SBA's guide says articles of organization is a simple document. It covers the basics of your LLC: the company name, address, member names, and the registered agent.
The Texas Secretary of State's Certificate of Formation for a limited liability company has a $300 filing fee.
One Texas question shows up right on the form. A Texas limited liability company's certificate of formation states whether it initially has managers or not. Answer it either way. Just answer it true.
Want to see what states charge elsewhere? We list LLC filing fees for some other states.
Step 4: Put an operating agreement in place
The SBA's guide says an operating agreement describes the structure of your company's financial and functional decisions. It spells out who makes the big calls, and what each member's duties, powers, and responsibilities are.
Step 5: Consider how the LLC is taxed
On taxes, the SBA's guide says it's possible for an LLC to be taxed as a C corp, S corp, or a nonprofit. Compare the options in LLC vs. LLC taxed as an S corp.
Forming an LLC in other states
Weighing states? See our guides on forming an LLC in Delaware, forming an LLC in Florida, and forming an LLC in Colorado.
Two more pages help with the decision. The first explains the timeline for forming an LLC. The other adds up how much it costs to start an LLC.
Still unsure an LLC fits? Compare an LLC, a corporation and a sole proprietorship before you file.