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

Your business name is more than a label — it’s also a legal identifier, and Texas has rules about what you can and can’t use.

Texas naming requirements for LLCs:

• ●The name must include “Limited Liability Company,” “LLC,” or “L.L.C.” somewhere in it
• ●It cannot be the same as, or confusingly similar to, an existing Texas business entity
• ●It cannot include words that imply it’s a government agency (like “FBI” or “Treasury”)
• ●Restricted words like “Bank,” “Insurance,” or “University” require special approval

How to check availability:

Search the Texas Secretary of State’s online database at sos.state.tx.us using SOSDirect. The search is free and takes less than two minutes.

Optional: Reserve your name

If you’re not ready to file yet but want to lock in the name, you can reserve it for up to 120 days for a $40 fee. This is useful if you’re still setting up your bank account or waiting on a logo. It’s not required — just a safety net.

Pro tip for RGV business owners: If you plan to market in both English and Spanish, search both the English and Spanish versions of your intended name. You want to make sure neither is already taken.

Every Texas LLC is required by law to have a registered agent. This is a person or company designated to receive official legal documents on behalf of your business — things like lawsuits, tax notices, and state correspondence.

Requirements for a Texas registered agent:

• ●Must have a physical street address in Texas (P.O. boxes are not accepted)
• ●Must be available during normal business hours to receive documents
• ●Can be you personally, a trusted individual, or a registered agent service

Can you be your own registered agent? Yes, and many solo business owners do this to save money. The trade-off: your name and personal home or office address becomes part of the public record in the Secretary of State’s database. If privacy matters to you, a registered agent service typically costs $50–$150 per year and keeps your personal address off the public filing.

If you’re based in the RGV and operating locally, using your business address as the registered agent address is a common and perfectly acceptable approach.

This is the official step that creates your LLC in the eyes of the State of Texas.

What you’re filing: Form 205 — Certificate of Formation for a Limited Liability Company

How to file: The easiest way is online through SOSDirect at sos.state.tx.us. You’ll create an account, fill out the form (it takes about 15 minutes), and pay by credit card. You can also mail the form to the Secretary of State’s office in Austin if you prefer paper filing, but online is faster and you get a confirmation immediately.

Filing fee: $300 — this is a one-time state fee, non-refundable.

Processing time: Approximately 10–12 business days for online filings as of 2026. Expedited processing is available for an additional fee if you need it faster.

What the Certificate of Formation includes:

• ●Your LLC name
• ●Your registered agent’s name and address
• ●The purpose of your business (can be broad — “any lawful purpose” is fine)
• ●Whether the LLC is managed by members or by a designated manager
• ●The organizer’s name and signature

Once the state processes your filing and returns a stamped Certificate of Formation, your LLC is officially a legal entity in Texas.

An operating agreement is an internal document that spells out how your LLC will be run — who owns what percentage, how decisions get made, how profits are distributed, and what happens if a member wants to leave.

Is it required in Texas? No. Texas does not legally require you to have a written operating agreement.

Should you have one anyway? Absolutely yes — especially if you have more than one owner. Without an operating agreement, Texas default rules govern your LLC. Those default rules may not match what you and your partners actually agreed to. A handshake deal is fine until it isn’t — and by then, you’re in a lawyer’s office paying $300/hour to sort out what you thought was obvious.

Key things to cover in your operating agreement:

• ●Ownership percentages (who owns what)
• ●How profits and losses are distributed
• ●Voting rights — does each member get one vote, or is it weighted by ownership?
• ●What happens if a member wants to sell or leave
• ●How new members can be added
• ●Who manages day-to-day operations
• ●What happens if the business is dissolved

For a single-member LLC (just you), an operating agreement still matters — it reinforces the legal separation between you and your business, which protects your personal assets. You can find free templates online, but for anything more complex than a solo operation, it’s worth having an attorney review it once.

Your EIN is your business’s federal tax ID number — think of it as a Social Security number for your LLC. You’ll need it to open a business bank account, hire employees, and file taxes.

Cost: Free. Completely free, straight from the IRS.

How to get it: Apply online at IRS.gov. The process takes about 15 minutes and you receive your EIN instantly at the end. You can also apply by fax or mail, but there’s no reason to wait weeks when the online process takes less time than a coffee break.

When to get it: Right after your Certificate of Formation is approved. Don’t wait.

Do you need an EIN if you’re a single-member LLC with no employees? Technically no — you can use your Social Security number for some purposes. But using an EIN instead of your SSN protects your personal information and is standard practice. Get the EIN. It’s free and takes 15 minutes.

This is the step most new business owners skip — and it’s the one that causes the most headaches later.

The day your LLC is formed, you are a separate legal entity from yourself. That separation only holds up if you treat it like a separate entity. That means separate finances, separate records, and clean books from the very first transaction.

Open a business bank account immediately. Use your EIN and Certificate of Formation to open a dedicated business checking account. Never mix personal and business money — not even once. “I’ll sort it out later” is how you end up spending 40 hours reconstructing a year of transactions at tax time.

Choose your accounting software. QuickBooks Online and Wave (free) are both popular options for small businesses. The right choice depends on your volume and complexity.

Start tracking expenses from day one. Every dollar you spend on your business — equipment, software, meals with clients, mileage — is potentially deductible. But you can only deduct what you can document. A shoebox of receipts is not documentation.

This is where NBC comes in. National Bookkeeping Company helps new business owners set up their books correctly from the start, so there are no messes to clean up six months later. Our SmartBook Essential bookkeeping plan ($350/month) covers monthly bookkeeping, reconciliation, and financial reports — everything you need to know where your business stands at all times.

Forming your LLC is a one-time task. Maintaining it is ongoing. Here’s what you need to know about annual obligations.

Texas Franchise Tax

Texas imposes a franchise tax on most LLCs. The good news: businesses with annual revenue under $2.47 million (the 2026 threshold) pay zero franchise tax — but they still have to file a No Tax Due report.

Public Information Report (PIR)

Due annually by May 15. This is a simple form you file with the Texas Comptroller that updates your LLC’s contact information and ownership. The filing is free. Miss it and you risk losing your LLC’s good standing.

Sales Tax Permit

If you sell taxable goods or services in Texas, you need a sales tax permit from the Texas Comptroller’s office. It’s free to obtain. Selling products? Providing certain services? Check whether your industry is subject to Texas sales tax — the rules are more specific than most people expect.

Separate business licenses

Texas does not have a general state business license. However, depending on your industry and city, you may need local permits (a City of McAllen business permit, for example) or professional licenses. Check with your city and county.

The $300 state filing fee is the only non-negotiable cost. Everything else is optional or can be done for free if you do it yourself.