How to Start an LLC in Texas: Complete 2026 Guide

How to Form an LLC: Step-by-Step

1. 1

   Choose a Unique LLC Name

   Your Texas LLC name must include 'LLC,' 'Limited Liability Company,' or an approved abbreviation. The name must be distinguishable from existing businesses registered with the Texas Secretary of State. You can search available names on the Texas SOS website to ensure yours is unique.

   Choosing the right name for your Texas LLC is more than a branding decision. It's a legal requirement that must be satisfied before you can file your formation documents. Your name must be distinguishable from every other active business entity already on file with the Texas Secretary of State (or equivalent agency), meaning a name can't simply swap a common word or use a variant spelling to get around an existing registration. Before you invest in a logo or website, run a thorough name search using the Texas Secretary of State SOSDirect at https://direct.sos.state.tx.us/corp/sosda/dba/search.asp. The search is free and returns results in real time. If your first choice is taken, try variations: adding your city, a descriptor (e.g., 'Group', 'Solutions', 'Services'), or your own name. Once you confirm availability in the state database, also check the U.S. Patent and Trademark Office (USPTO) trademark database at tmsearch.uspto.gov to avoid federal trademark conflicts. State approval doesn't protect you from trademark infringement suits.

   What to Fill In

   • Entity name exactly as it should appear in Texas records
   • Required designator: 'Limited Liability Company', 'LLC', or 'L.L.C.' (or state-approved abbreviation)
   • Name reservation applicant name and address (if filing a separate name reservation)
   • Name reservation term: typically 60 to 120 days depending on the state

   Common Rejection Reasons

   • Name isn't distinguishable from an existing business already registered in Texas
   • Missing the required LLC designator ('LLC', 'L.L.C.', or 'Limited Liability Company')
   • Name contains a restricted or prohibited word (e.g., 'Bank', 'Insurance', 'Engineer') that requires additional state agency approval
   • Name is identical or deceptively similar to a name reserved by another applicant
   • Name implies a government affiliation (e.g., 'Federal', 'State', 'Bureau') without proper authorization

   Processing Times

   • Online: Name availability search results are instant; name reservation approval typically takes 1 to 3 business days
   • Mail: Name reservation by mail takes 1 to 2 weeks depending on state volume

   After Approval

   Once the name clears, write it down exactly as it will appear on the filing, capitalization and spacing included. Use that exact string everywhere else in the process. If you want to secure the name before you're ready to file, submit a name reservation for the applicable fee. With your name locked in, proceed immediately to selecting your registered agent so you've all the information you need for the filing form.

   Pro tip: Reserve your chosen name for 120 days for $40 if you're not ready to file immediately.
2. 2

   Appoint a Registered Agent

   Texas law requires every LLC to have a registered agent with a Texas street address to receive legal documents. This can be yourself, another person, or a professional service. The registered agent must be available during normal business hours and can't use a P.O. Box.

   A registered agent (sometimes called a 'statutory agent', 'agent for service of process', or 'resident agent' depending on the state) is the person or business entity officially designated to receive legal documents on your LLC's behalf, lawsuit service of process, tax notices, and compliance warnings routed through Texas Secretary of State SOSDirect. The registered agent must have a physical street address in Texas, a P.O. Box is never acceptable. You've three options: serve as your own registered agent (if you've a Texas street address and can be there 9am to 5pm on business days), name another individual who agrees to serve in this role, or hire a professional registered agent service. Professional services typically cost $49 to $299 per year and provide guaranteed document handling, compliance reminders, and continuity if you move or travel. Texas does require ownership information in state filings, so a professional registered agent mainly protects your home address rather than your identity, for full anonymity, owners typically pair a Texas LLC with a holding company formed in a state that allows it. The Certificate of Formation (Form 205) must name at least one governing person (member or manager), a public record; the annual Public Information Report also discloses management.

   What to Fill In

   • Registered agent's full legal name (individual or business entity name)
   • Registered agent's street address in Texas (no P.O. Boxes, must be a physical location)
   • Registered agent's mailing address (if different from street address)
   • Registered agent consent or acceptance (some states require a signed consent form or a checkbox on the Articles)

   Common Rejection Reasons

   • Registered agent address is a P.O. Box, virtual office, or mail drop service
   • Address provided is outside Texas. The agent must be a Texas resident or entity
   • The named entity as registered agent isn't authorized to do business in the state
   • Registered agent consent is missing when required by the state
   • Registered agent's street address is incomplete (missing suite or unit number for a multi-tenant building)

   Processing Times

   • Online: The registered agent designation is part of your Articles/Certificate filing, no separate processing time
   • Mail: Same as the formation document. RA information is reviewed with the full filing

   After Approval

   Notify your registered agent immediately after your LLC is approved. They need to know they're officially listed and to be on the lookout for any documents from the state. If you used a professional service, complete their onboarding process and set up document forwarding preferences. Keep your registered agent's information current: if your RA moves, resigns, or if you switch services, you must file a statement of change with Texas Secretary of State SOSDirect (typically a $10 to $30 fee) before your next Public Information Report (PIR) is due, failure to maintain a valid registered agent can result in your LLC being administratively dissolved.

   Pro tip: Consider a professional registered agent service if you travel frequently or want to keep your home address private.
3. 3

   File Certificate of Formation

   Submit Form 205 (Certificate of Formation) to the Texas Secretary of State with the $300 filing fee. You can file online, by mail, or in person. The form requires basic information about your LLC including name, registered agent, management structure, and purpose.

   Filing the Certificate of Formation: Limited Liability Company (Form 205) is the official, legally binding step that creates your LLC under Texas law. This document is submitted to the Texas Secretary of State SOSDirect (https://direct.sos.state.tx.us) along with the required filing fee. Before you start the form, gather your LLC name (exactly as confirmed available), your registered agent's full name and Texas street address, the names and addresses of all organizers (the people filing the document), and a decision on management structure (member-managed, where all members run the business, vs. manager-managed, where designated managers handle operations). Filing online is strongly recommended: you get instant confirmation of receipt, can track your filing status, and avoid mail delays. Online filers also typically receive the approved document as a downloadable PDF immediately upon approval. Texas imposes a franchise tax with a $2,650,000 annualized-revenue threshold for the 2026 report year. LLCs below the threshold owe no tax and file only the Public Information Report, due by May 15 each year at no additional cost.

   What to Fill In

   • Name of LLC (must include 'Limited Liability Company', 'LLC', or 'L.L.C.')
   • Period of duration: perpetual or specific term
   • Registered agent: name and Texas street address (no P.O. Boxes)
   • Registered office address
   • Governing authority: board of managers or members
   • Names and addresses of initial governing persons (managers or members)
   • Organizer name, capacity, and signature

   Common Rejection Reasons

   • LLC name conflicts with an existing Texas business entity name or reservation
   • Registered agent address is a P.O. Box or is located outside the state
   • Filing fee payment is missing, incorrect, or made with a non-accepted payment method
   • Required fields are left blank (most commonly: management structure not selected, or organizer signature missing)
   • Incorrect or outdated form version submitted (states periodically update their official forms)
   • Name contains a restricted word (e.g., 'Bank', 'Trust', 'Insurance') without the required supplemental documentation

   Processing Times

   • Online: Not published, Texas Secretary of State states no standard turnaround for online filings
   • Mail: Not published, Texas Secretary of State states no standard turnaround for mailed filings, and every state that comments says mail is slower than online
   • Expedited: $50 for Standard Expedited (processed ahead of regular submissions, typically 2-3 business days; mail or in person), $500 for Next-Day (received by 12:00 p.m., processed by close of business the next business day; in person or by email), and $750 for Same-Day (received by 12:00 p.m., processed by close of business the same day; in person or by email)

   After Approval

   As soon as your Certificate of Formation: Limited Liability Company (Form 205) is approved, download and save the stamped/filed copy. This is your official proof that the LLC legally exists. Store it securely in both digital and physical formats. You will need this document four times over. The IRS may ask for it when you apply for your federal EIN. A bank will ask for it to open a business account. You will need it to sign leases and contracts in the LLC's name, and to apply for certain business licenses. Some banks require a 'certified copy' of the Articles. You can typically order one from the Texas Secretary of State for a small fee ($5 to $30). Your LLC's official formation date is the date stamped on the approved document.

   Pro tip: File online for the fastest processing and instant confirmation of receipt.
4. 4

   Create an Operating Agreement

   While not legally required in Texas, an operating agreement matters for LLCs with multiple members and highly recommended for single-member LLCs. This document outlines ownership percentages, management structure, and operating procedures. It helps protect your limited liability status and prevents disputes.

   While Texas doesn't legally require LLCs to file or maintain an operating agreement, courts and banks treat the absence of one as a serious red flag. An operating agreement is the internal governing document of your LLC. It sets out who owns what percentage and how profits and losses are split. It names who can make decisions and sign contracts. It says what happens when a member wants to leave or sell, and how the LLC is dissolved. Without an operating agreement, your LLC is governed by Texas's default LLC statutes, which may not reflect your actual intentions, for example, some states default to equal profit sharing regardless of capital contributions. A single-member LLC benefits from one too. It shows the IRS, banks, and courts that the business is separate from your personal finances, and that separation is what keeps limited liability intact. Operating agreements aren't filed with the state. They're kept internally and shared with members and banks as needed. You can draft one yourself using a template, have an attorney prepare it, or use a formation service.

   What to Fill In

   • LLC name and state of formation
   • Formation date and registered agent information
   • Name, address, and ownership percentage of each member
   • Capital contributions: how much each member invested
   • Profit and loss allocation: proportional to ownership or custom split
   • Voting rights: equal votes per member or votes proportional to ownership percentage
   • Management structure: member-managed or manager-managed (with manager appointment process)
   • Buyout provisions: what happens if a member wants to exit, dies, or becomes incapacitated
   • Dissolution procedures: how and when the LLC can be wound up

   Common Rejection Reasons

   • No rejection risk. Operating agreements are private documents not reviewed by the state
   • Banks may reject your bank account application if you can't produce an operating agreement when requested
   • Courts may pierce the corporate veil (remove LLC liability protection) if no operating agreement exists and business/personal finances are commingled

   Processing Times

   • Online: Same day. You can draft and sign an operating agreement immediately after your LLC is approved
   • Mail: Not applicable. Operating agreements are internal documents

   After Approval

   Once every member has signed, and every manager if the LLC has them, give each member a copy. Keep the original in the LLC's records binder. Provide a copy to your bank when opening your business account. Most banks require it. Review and update your operating agreement any time ownership changes, new members join, or the business structure changes significantly. If the LLC has more than one member, have an attorney read the operating agreement before anyone signs. The buyout and dispute-resolution clauses are the ones worth paying to get right.

   Pro tip: Even single-member LLCs benefit from an operating agreement to demonstrate separation between personal and business assets.
5. 5

   Obtain an Employer Identification Number (EIN)

   Apply for a federal EIN through the IRS website, phone, or mail. This free nine-digit number is required for tax purposes, opening business bank accounts, and hiring employees. Even single-member LLCs typically need an EIN if they plan to open a business bank account or may hire employees in the future.

   An Employer Identification Number (EIN) is a nine-digit federal tax identification number assigned by the Internal Revenue Service (IRS). Think of it as your LLC's Social Security number for tax and banking purposes. You need an EIN if the LLC has more than one member, plans to hire, files certain federal tax returns, or wants a business bank account. Even single-member LLCs that are sole proprietors for tax purposes benefit from having an EIN. Most banks require one to open a business checking account, and it lets you avoid using your personal Social Security number on vendor forms and contracts. The EIN application is free and takes about 15 minutes online at IRS.gov. You'll receive your EIN immediately upon completing the online application during IRS business hours (Monday to Friday, 7 a.m. to 10 p.m. ET). Your Texas LLC formation document approval is a prerequisite. Apply for the EIN only after Texas Secretary of State SOSDirect has officially approved your LLC. Texas has no personal income tax, so once you've your EIN you typically won't need to register for state income tax withholding as a pass-through owner. That doesn't mean the state is fee-free, though. Texas imposes a franchise tax; LLCs under the no-tax-due threshold ($2,650,000 total revenue for 2026-27 reports) owe $0 but must still file an annual Public Information Report.

   What to Fill In

   • Legal name of the LLC (exactly as approved by the state)
   • Name of the responsible party (typically the sole member or a managing member for multi-member LLCs)
   • Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) of the responsible party
   • Business address (the LLC's principal place of business)
   • Reason for applying (e.g., 'Started a new business')
   • Type of entity: Limited Liability Company
   • Number of members in the LLC
   • Date the LLC was officially formed or started business
   • Tax classification: single-member LLC (disregarded entity), multi-member LLC (partnership), or if electing S-Corp or C-Corp taxation
   • Highest number of employees expected in the next 12 months

   Common Rejection Reasons

   • Application submitted before the LLC is approved by the state (IRS may reject if no state-approved entity exists yet)
   • Responsible party's SSN or ITIN is incorrect or doesn't match IRS records
   • LLC name on the application doesn't match the name on the approved state formation document
   • Applying for a second EIN when the LLC already has one assigned (each LLC can only have one EIN)
   • Responsible party already received an EIN as an individual. You still need to apply again for the LLC entity

   Processing Times

   • Online: Immediate. EIN is issued instantly at the end of the IRS online application during business hours (Mon to Fri, 7am to 10pm ET)
   • Mail: 4 to 6 weeks via Form SS-4 submitted by mail
   • Fax: 4 business days via Form SS-4 submitted by fax (number: 855-641-6935)

   After Approval

   Print and save your IRS EIN assignment letter (Form CP 575). Banks and government agencies will ask for this document to verify your EIN. Store it with your LLC's formation documents. With your EIN in hand, you can now open a dedicated business bank account, set up business credit cards, register with Texas Secretary of State SOSDirect or Texas's tax agency as applicable, and apply for professional licenses that require a tax ID number. Your EIN is also required to hire employees and to file federal tax returns for your LLC.

   Pro tip: Apply online at IRS.gov for immediate EIN assignment during business hours.
6. 6

   Open a Business Bank Account

   Separate your personal and business finances by opening a dedicated business bank account. You'll need your Certificate of Formation, EIN, operating agreement, and personal identification. This separation matters for maintaining your LLC's limited liability protection and simplifying tax preparation.

   Opening a dedicated business bank account is one of the most important steps for protecting your LLC's limited liability status. Whether you kept business and personal money apart is one of the key tests a court applies when deciding whether to pierce the corporate veil. Commingle the two and a court can hold you personally liable for the LLC's debts. That is the protection you formed the LLC to get. You should never use a personal account for business transactions after your LLC is formed. When choosing a bank, consider minimum balance requirements, monthly fees, transaction limits, integration with accounting software (QuickBooks, Wave, FreshBooks), and whether the bank has physical branches in Texas. Many founders pick a national bank such as Chase, Bank of America, or Wells Fargo for the ATM network. Others prefer a local credit union, or an online-only account such as Mercury, Relay, or Novo. The online options often charge lower fees and integrate better with accounting software. Before you apply, confirm your LLC is in good standing. Banks routinely run a state status check, and a lapsed Public Information Report (PIR) or unpaid state fee is one of the most common reasons an otherwise-complete application gets flagged for extra review. (Texas imposes a franchise tax; LLCs under the no-tax-due threshold ($2,650,000 total revenue for 2026-27 reports) owe $0 but must still file an annual Public Information Report.) Since Texas has no personal income tax, your bookkeeping setup can skip state withholding entirely, though track it separately anyway if you ever register as a foreign LLC in a state that does tax pass-through income.

   What to Fill In

   • LLC's legal name (exactly as it appears on your formation document)
   • LLC's EIN (Employer Identification Number)
   • Approved/stamped formation document from the state (Articles or Certificate)
   • Operating agreement (most banks require this for LLCs)
   • Government-issued photo ID for each person authorized on the account
   • Initial deposit (varies by bank, can be $0 to $1,500+)
   • Business address and phone number

   Common Rejection Reasons

   • Incomplete documentation, missing EIN confirmation letter, formation document, or operating agreement
   • Bank's compliance team flags the business type as high-risk (some industries face additional scrutiny)
   • LLC not in good standing with Texas Secretary of State SOSDirect (e.g., missing your Public Information Report (PIR). Check your status first)
   • Inconsistencies between LLC name on documents and the name used on the application

   Processing Times

   • Online: Online bank applications can be approved in minutes to 1 to 2 business days; some banks (Mercury, Novo) offer same-day accounts
   • In person: Same-day account opening if you arrive with all required documents at a branch

   After Approval

   Once your account is open, immediately set it as the destination for all business income and the source for all business expenses. Order a business debit card and consider applying for a small business credit card to begin building your LLC's credit profile. Connect the account to your accounting software to automate transaction categorization and simplify bookkeeping. Pay yourself through owner's draws, meaning transfers from the business account to your personal one. Do not spend from the business account directly. Keep records of all draws and maintain a balance that covers your expected business expenses for at least 60 to 90 days.

   Pro tip: Shop around for business banking packages, as many banks offer fee waivers for new LLCs.
7. 7

   Obtain Required Licenses and Permits

   Depending on your business type and location, you may need federal, state, or local licenses and permits. Check with the Texas Department of Licensing and Regulation and your city/county offices. Common requirements include sales tax permits, professional licenses, and zoning permits for home-based businesses.

   LLC formation alone doesn't automatically authorize your Texas LLC to operate. You may need one or more licenses and permits at the federal, state, county, and city levels depending on your industry and location. The most common requirement for all businesses is a general business license or business registration certificate from your city or county. Regulated industries need their own professional or occupational license on top. Healthcare, construction, real estate, food service, childcare, and financial services all qualify, and the list runs longer than that. Use the Texas business license lookup tool at https://gov.texas.gov/business to identify which licenses apply to your business type and location. Also check your city or county government website for local permits. Some industries need a federal license whatever the state requires. Firearms dealers, alcohol producers, motor carriers, and investment advisers are the common ones. Home-based businesses often need a home occupation permit from their city or county. If you sell taxable goods or services in Texas, you'll register for a sales tax permit with the state revenue agency separately from anything filed through https://gov.texas.gov/business.

   What to Fill In

   • Business type and NAICS code (used to determine applicable licenses)
   • Physical business address (determines which local permits apply)
   • EIN and LLC name (required on most license applications)
   • Professional credentials or certifications (for regulated professions)
   • Sales tax permit application (if selling taxable goods or services in your state)
   • Zoning compliance certificate or home occupation permit (for home-based businesses)

   Common Rejection Reasons

   • Business address isn't zoned for the intended business activity
   • Missing required professional certifications or proof of licensure for regulated professions
   • Delinquent taxes or outstanding fees with state or local agencies
   • Business name on the license application doesn't match the LLC's legal name with the state
   • Required inspections (health, fire, building) not completed before license application

   Processing Times

   • Online: State-level licenses: 1 to 10 business days online; some professional licenses require 30 to 90 days for background checks or examinations
   • Mail: State licenses by mail: 2 to 6 weeks; local permits may require in-person visits
   • Professional licenses: Professional licenses (contractor, CPA, attorney, doctor) can take 30 to 180 days depending on examination and background check requirements

   After Approval

   Post each required license or permit prominently at your place of business as required by law. Set renewal reminders in your calendar for all licenses. Many expire annually and late renewal brings fines or forced closure. Register for Texas state sales tax with the state revenue agency if you sell taxable products or services. This is a separate requirement from your LLC formation. If you hire employees, register for Texas employer withholding and unemployment insurance within the timeframe required by state law (typically within 20 to 30 days of your first hire). Review your license requirements alongside your Public Information Report (PIR) each year, as your business grows into new product lines or new locations, additional permits may be required.

   Pro tip: Visit the Texas Business Portal at gov.texas.gov for a comprehensive list of licensing requirements by industry.