How to Form an LLC in Texas: Step-by-Step Guide
Forming an LLC in Texas is straightforward — but there are specific steps you need to follow. Here's a complete guide to forming your Texas LLC correctly.
Texas is one of the best states to form an LLC — no state income tax, a business-friendly legal environment, and a straightforward formation process. Here's how to do it.
Step 1: Choose a Name
Your LLC name must:
- Be unique — not already in use by another Texas business
- Include "Limited Liability Company," "LLC," or "L.L.C."
- Not include words that imply it's a government agency or bank (without special approval)
Search the Texas Secretary of State's SOSDirect database to check name availability.
Step 2: Choose a Registered Agent
Every Texas LLC must have a registered agent — a person or company with a physical Texas address who can receive legal documents on behalf of the LLC. You can be your own registered agent, or use a registered agent service ($50–$150/year).
Step 3: File a Certificate of Formation
File Form 205 (Certificate of Formation for a Limited Liability Company) with the Texas Secretary of State. The filing fee is $300.
You can file online through SOSDirect or by mail. Online filing is faster (typically processed within 2–3 business days).
Step 4: Get an EIN
Apply for an Employer Identification Number (EIN) from the IRS at irs.gov. It's free and instant online. You need an EIN to:
- Open a business bank account
- Hire employees
- File business tax returns
Step 5: Create an Operating Agreement
Texas doesn't legally require an operating agreement, but you should have one. It documents:
- Ownership percentages
- How profits and losses are distributed
- How decisions are made
- What happens if a member leaves
Without an operating agreement, Texas default rules govern your LLC — which may not reflect your intentions.
Step 6: Open a Business Bank Account
Use your Certificate of Formation and EIN to open a dedicated business checking account. This is essential for maintaining the liability protection your LLC provides.
Step 7: Consider an S-Corp Election (Optional)
If you expect to earn $40,000+ in net profit, consider filing Form 2553 to elect S-Corp tax treatment as part of your tax planning strategy. This can save thousands in self-employment taxes. The deadline is 75 days from formation for the election to apply to the current year.
Ongoing Requirements
- Annual franchise tax report — Texas LLCs must file an annual franchise tax report (most small LLCs pay no tax but must still file)
- Maintain your registered agent — Keep your registered agent information current
Once your LLC is formed, see our post-formation checklist for the next 30–90 days of setup steps.
Related Resources
- Tax Planning for Small Business Owners
- What to Do After Forming Your LLC: A Post-Formation Checklist
- Why Form an LLC? The Benefits Every Small Business Owner Should Know
- LLC Operating Agreement: What It Is and Why You Need One
- LLC Bookkeeping: What Every Owner Needs to Know
- S-Corp vs. LLC: Which Is Better for Your Taxes?
- Contact Us
Want us to handle your Texas LLC formation? The Gap ProAdvisors manages the entire process — Certificate of Formation, EIN, and optional S-Corp election — for a flat $700. Pay now or contact us.
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About the author
The Gap ProAdvisorsOwner & Lead Advisor — The Gap ProAdvisors
Angela is a Certified Bookkeeper, QuickBooks ProAdvisor, and IRS Registered Tax Return Preparer (PTIN) with over a decade of experience helping small businesses across Texas get their books right and keep more of what they earn. She founded The Gap ProAdvisors to make professional financial services accessible to every small business owner — no matter where they are.