Forming an LLC in Texas involves five or six concrete steps and a mandatory $300 state filing fee. The process is mostly straightforward, but there are a handful of specific points where first-time founders consistently make avoidable mistakes. This guide covers what the steps actually are, what they cost, and what to watch out for.
What You Will Need Before You Start
- A name for your LLC (you will check availability against the Texas SOS database)
- A Texas street address for your registered agent (not a PO Box)
- A Texas street address for your principal place of business (can be same as agent)
- Names and addresses of all members or managers
- A decision on management structure: member-managed vs. manager-managed
- Payment method for the $300 SOS filing fee
The Steps, in Order
Check Your LLC Name
Your LLC name must be distinguishable from other registered businesses in Texas. Check availability using the Texas SOS SOSdirect business search tool. Your name must include "Limited Liability Company," "LLC," or "L.L.C." and may not use certain restricted words (like "bank" or "insurance") without special authorization.
Designate a Registered Agent
Before you file, you must identify your registered agent. This is an individual or entity with a Texas street address who will receive legal documents and state correspondence on behalf of your LLC. The registered agent must be available during normal business hours. You can name yourself if you have a real Texas address, or appoint a service like Get Business Address.
File Your Certificate of Formation (Form 205)
This is the official formation document. Texas uses Form 205 — Certificate of Formation for a Limited Liability Company. You file it with the Texas Secretary of State, either online through SOSdirect or by mail. The form captures your LLC name, principal office, registered agent, management structure, and organizer information.
The state filing fee is $300. This is set by the State of Texas and does not change regardless of who files it. Do not pay more than $300 in state fees for this filing — some services mislead clients about how much the state charges.
Receive Your Certificate of Formation
Once the SOS approves your filing, you receive a stamped Certificate of Formation. This is the official proof that your LLC exists in Texas. Keep digital and physical copies — you will need it to open a bank account, apply for an EIN, and in some cases apply for business licenses.
Get Your EIN from the IRS
An Employer Identification Number (EIN) is your LLC's federal tax ID — similar to a Social Security Number but for your business. You need it to open a business bank account, hire employees, and file federal taxes. U.S. citizens and permanent residents can apply directly on the IRS website and receive an EIN the same day. International founders without a U.S. SSN must apply by fax or mail, which takes 2–4 weeks.
Create an Operating Agreement
Texas does not legally require LLCs to have a written operating agreement, but you should create one anyway. Banks often require it to open a business account, and it governs how your LLC is managed, how profits are distributed, and what happens if a member exits. For single-member LLCs, this is straightforward. For multi-member LLCs, it is critical to have it in writing before any disputes arise.
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The Real Cost Breakdown
Here is an honest accounting of what forming a Texas LLC actually costs in 2026:
State fee as of 2026. Service fees vary by provider. IRS EIN fee is $0 when applied for directly — never pay more than the state-set fee for the government portion.
After You Form: Ongoing Compliance Requirements
Texas LLCs have annual compliance obligations. Missing them can result in your LLC losing its good standing with the state, which can have real consequences for contracts, bank accounts, and legal liability protection.
- Texas Annual Report (Franchise Tax): The Texas Comptroller requires most LLCs to file a franchise tax report and public information report annually — even if you owe no tax. The threshold for owing tax is high enough that many small LLCs file a "no tax due" return, but the filing itself is required. Deadline is May 15 each year.
- Beneficial Ownership Information (BOI) Report: Under the federal Corporate Transparency Act, most LLCs formed before 2024 had until January 2025 to file an initial BOI report with FinCEN. LLCs formed in 2024 or later have 90 days from formation. This is a one-time filing (with updates required for ownership changes).
- Registered Agent Renewal: If you use a registered agent service, that renews annually. If your registered agent changes, you must file a Statement of Change with the Texas SOS.
Forming the LLC is the start, not the finish. The franchise tax report, BOI filing, and registered agent maintenance are ongoing requirements. Missing the franchise tax deadline results in a $50 penalty and eventual loss of good standing. Missing the BOI filing can result in civil penalties. We track these for clients enrolled in our compliance service.
Common Mistakes to Avoid
- Using a PO Box as your principal office or registered agent address. The SOS will reject the filing. You need a real Texas street address. See our guide on PO Boxes and virtual addresses.
- Using your home address. Your home address will be searchable in the public SOS database permanently. See our privacy guide.
- Paying for "expedited" processing beyond the actual SOS fee. The Texas SOS charges $300 and offers expedited processing (same-day, 24-hour) for an additional fee paid directly to the SOS. Filing services may charge their own service fees on top — make sure you understand what you are paying for.
- Not designating a registered agent before filing. The registered agent name and address must be on the Certificate of Formation. If you do not have one lined up, the filing cannot be completed.
- Skipping the operating agreement. Even if Texas does not legally require it, a bank account requires it and any member dispute without one is much harder to resolve.
If you want all of this handled for you — name check, filing, registered agent, EIN, and operating agreement — our Establish Bundle covers the full process for $349 plus the $300 Texas state fee. See our onboarding guide for a step-by-step breakdown of how the process works.
Last updated: July 9, 2026