Texas LLC vs Delaware LLC (2026)
Compare Texas LLC vs Delaware LLC — filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
| Factor | Texas | Delaware |
|---|---|---|
| Filing Fee | $300 | $90 |
| Processing Time | 3 day(s) | 7 day(s) |
| Annual Report Fee | $0 | $300 |
| Annual Report Due | May 15 | June 1 |
| State Income Tax | No | Yes |
| Anonymous LLC | No | Yes |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A — you're in your home state | ~$750 + registered agent ~$150/yr |
Verdict: Texas wins for most businesses
For most Texas-based small businesses, forming an LLC in Texas is the better choice due to lower total costs and simpler compliance. Delaware only makes sense if you need anonymous ownership, plan to raise venture capital, or operate across multiple states.
Filing Fees & Formation Costs
While Delaware's $90 filing fee is lower than Texas's $300, forming in Delaware when you operate in Texas triggers additional costs. You'll need to register as a foreign LLC in Texas for approximately $750, plus hire a registered agent in Delaware for around $150 annually. This means your first-year cost jumps to over $1,000 compared to just $300 in Texas. The apparent savings disappear when you factor in the required foreign registration and ongoing Delaware compliance costs.
Taxes: Texas vs Delaware
Texas has no state income tax for LLCs, making it highly tax-friendly for business owners. Delaware imposes an annual franchise tax of $300 minimum on LLCs, regardless of income or activity. If you form in Delaware but operate in Texas, you'll pay Delaware's franchise tax while still being subject to Texas franchise tax if your LLC meets certain thresholds. For most small businesses, Texas's tax-free status provides significant long-term savings compared to Delaware's mandatory annual tax.
Privacy & Asset Protection
Delaware allows anonymous LLC formation, meaning member names don't appear in public records, while Texas requires disclosure of at least one member or manager. However, both states offer strong asset protection through charging order protections that shield member personal assets from LLC creditors. Delaware's privacy advantage is meaningful for business owners who need anonymity, but Texas's asset protection laws are equally robust for typical small business needs. The privacy benefit must be weighed against the significantly higher costs of maintaining a Delaware LLC.
Annual Maintenance Costs
Texas LLCs pay $0 in annual report fees and face minimal ongoing compliance requirements. Delaware LLCs must pay a $300 annual franchise tax, file an annual report, and maintain a registered agent costing $150+ per year. If you form in Delaware but operate in Texas, you'll also need to maintain good standing in both states, potentially doubling your compliance burden. Over five years, a Delaware LLC costs approximately $2,250 more than a Texas LLC in franchise taxes and registered agent fees alone.
When Delaware Actually Makes Sense
Delaware formation is beneficial for businesses seeking complete ownership anonymity, those planning to raise venture capital (many investors prefer Delaware entities), or companies operating in multiple states. If you're building a scalable tech startup or need sophisticated corporate structures, Delaware's specialized business courts and extensive case law provide advantages. However, for typical small businesses like restaurants, retail stores, or service companies operating primarily in Texas, these benefits rarely justify the additional complexity and costs.