How to Start an LLC in Texas in 2026: 8 Steps

What a Texas LLC actually is, and why founders choose it

A limited liability company is a hybrid legal structure: it gives its owners, called members, the personal liability protection of a corporation while letting profits and losses pass through to their personal tax returns like a partnership or sole proprietorship. Texas did not invent the LLC (Wyoming did, in 1977), but Texas has become one of the most popular states to form one in for reasons that are mostly about Texas itself rather than any legal exotica. Most Texas LLCs are formed by people who already live and work there. First, Texas has no state personal income tax, which means the pass-through income your LLC generates is taxed once at the federal level and never touched by a Texas income tax return, a genuine advantage over states like California. Second, if your business operates in Texas, meaning you have an office, employees, or regular in-person activity there, you owe Texas's fees and filings regardless of where you incorporate, so forming directly in Texas avoids paying a second state on top of it. Third, the Texas Business Organizations Code gives members broad freedom to write their own rules in the operating agreement, similar to Delaware's approach, and Texas courts have a developed body of business case law through specialized business courts that opened in several of the state's largest counties. There is a tax angle worth understanding correctly rather than repeating the shorthand version. "No state income tax" is true for individuals, but it does not mean a Texas LLC owes nothing to the state; step 7 of this guide covers the franchise tax (also called the margin tax) that applies at the entity level. None of this requires you to live in Texas if you are forming there for a different reason, though most founders using this guide do. What Texas does require is the eight steps below, done in order.

Texas series LLCs: a variation worth knowing about

Texas also permits a series LLC, a single LLC that creates internal, walled-off "series," each able to hold its own assets, liabilities, and members, protected from the debts of the other series inside the same LLC, under Texas Business Organizations Code Section 101.601. A Texas series LLC files one Certificate of Formation for the whole structure and pays the same $300 fee as a standard LLC, then designates each series internally, generally without a separate state filing fee per series, which is a meaningfully cheaper structure than forming several standalone LLCs. Series LLCs show up most often in real estate (a separate series for each property, so a lawsuit over one property cannot reach the others) and in fund structures (a separate series per investment). Most founders forming a single operating business do not need one. The added complexity in accounting, banking, and legal documentation only pays off when you actually have multiple, genuinely separable pools of assets or liability, and some banks and out-of-state counterparties are still unfamiliar with series LLCs, which can complicate financing. If that describes your situation, get a lawyer involved before filing. The internal liability shielding only holds up if the series are administered correctly and kept truly separate in practice, not just on paper, and Texas law requires each series to maintain separate records to preserve that protection.

LLC vs. C corp vs. S corp vs. sole proprietorship

Before you file anything, it helps to know what you are actually choosing between. Texas lets you form several kinds of entities, and this guide is specifically about forming a limited liability company. Here is how an LLC compares to the three structures founders ask about most, side by side.

The short version: an LLC is the flexible, low-maintenance option for a business that plans to keep its profits, or split them among a small group of owners, rather than raise institutional money. A sole proprietorship costs nothing to start, but it leaves your personal assets exposed to business debts and lawsuits, which is the main reason most founders outgrow it within their first year or two of real revenue. An S corporation is not a separate entity you form at the state level. It is a tax election you file on top of an LLC or a corporation, using IRS Form 2553. Electing S corp status can lower self-employment tax for a profitable, owner-operated business, but it adds payroll requirements, a reasonable-compensation test, a 100-shareholder cap, and a single class of stock, which rules out most venture rounds. Our guide on whether your LLC counts as an S corp or a C corp walks through the mechanics. A C corporation becomes the default choice once venture capital enters the picture. Venture funds are structured to buy preferred stock, and most cannot legally invest in a pass-through LLC at all. A C corp also supports employee stock option pools and Qualified Small Business Stock (QSBS), a federal tax benefit that can shelter a meaningful share of gain on a future sale. The tradeoff is double taxation: the corporation pays tax on its profits, and shareholders pay tax again on any dividends. Even Texas-based, Texas-operating startups that plan to raise venture capital typically end up incorporating in Delaware rather than staying a Texas entity, because investors expect it regardless of where the team is physically based, and most standard venture financing documents assume a Delaware C corp on the other side of the table. Our Delaware C corp guide and our C corp vs. S corp comparison cover that decision in full. If a Delaware C corp turns out to be the better fit for your business, Rho Incorporation handles attorney-reviewed Delaware C corp formation for a $400 fee, credited back once you deposit $10,000 of new money into your Rho checking account and keep your daily average balance $10,000 above where it started for the 60 days after you incorporate. Your SS-4 is prepared and submitted for you, the first year of registered agent service is included, and you get same-day access to Rho banking once your incorporation is approved. Rho Incorporation currently supports Delaware C corporations, with LLC support coming soon. If you are comparing formation providers generally rather than deciding between entity types, our breakdown of the cheapest incorporation services ranks the true, all-in cost of each option.

What you need before you start

Gather these before you open the first form, and the eight steps below go much faster:

• A cleared LLC name that includes an LLC designator and has passed a search on the Texas Secretary of State's SOSDirect system.

• A registered agent with a physical Texas street address, lined up and confirmed before you file, including their written or electronic consent to serve.

• A payment method for the $300 state filing fee, plus any expedite fee you decide to pay.

• The responsible party's SSN or ITIN if you have one, so you can get an EIN online in minutes once the LLC is approved; otherwise, budget extra time for Form SS-4 by fax or mail.

• A plan for your operating agreement, even a simple single-member one, ideally drafted or reviewed before the LLC's first transaction.

• Clarity on where you actually operate, so you know at filing time whether step 8's foreign-qualification requirement will apply to you in any other state.

The 8 steps to start a Texas LLC

Each step below builds on the one before it. Do them out of order and you will find yourself stuck: you cannot open a bank account without an EIN, you cannot get an EIN in most cases without an approved Certificate of Formation, and you cannot file the certificate without a registered agent already lined up and their consent in hand. Follow the sequence and there is nothing to redo.

1. Search your LLC name

Start with the entity name search available through the Texas Secretary of State's SOSDirect system. Your name must be distinguishable on the record from every entity already on file in Texas, and it must include a designator such as "LLC," "L.L.C.," or "Limited Liability Company." Texas's matching rules, like most states, look past punctuation, spacing, and generic filler words, so a name that reads as unique to you can still bounce back as a conflict at filing. Search a few variations before you settle on one, including a version without your designator and a version with common words stripped out. Texas allows a name reservation for a fee if you are not ready to file yet, though most founders skip it and file the certificate the same day the name search comes back clear, since the search and the filing can happen back to back. A cleared entity name does not grant you a domain name or a trademark, so check both if the brand name matters as much as the legal name.

2. Appoint a Texas registered agent

Every Texas LLC must continuously maintain a registered agent: an individual Texas resident, or a registered organization, with a physical Texas street address where they can be personally served during business hours. A P.O. box or a bare mailbox or answering service does not qualify, and the agent must give their written or electronic consent to serve before you list them on the certificate. The Texas Secretary of State itself cannot serve as your registered agent. If your LLC is ever sued, the registered agent is where the paperwork legally lands, so this is not a role to leave unmanaged. If you personally live in Texas, you can serve as your own agent at no extra cost. Founders forming from outside Texas, or who simply want the privacy and reliability of a dedicated service, hire a commercial registered agent instead. Pricing typically runs $50 to $300 per year depending on the provider and whether it bundles compliance reminders, mail scanning, or a Texas business address you can also use elsewhere. This pricing is set by each individual provider, not by the state. Choose your agent before you file, because the certificate of formation requires the agent's name, address, and signed consent. Switching agents later means filing a change-of-agent document with the state, which carries its own fee.

3. File the certificate of formation

The certificate of formation (Form 205) is the document that legally creates your LLC. It asks for your LLC's exact name, its registered agent's name, Texas address, and consent, its management structure, and an organizer's signature. You can file online through SOSDirect, by mail, by fax, or in person. Online through SOSDirect is generally the fastest standard route. A formation service or your registered agent can also prepare and submit it for you, for a service fee layered on top of the state's own charge. The table below is the current fee schedule for a Texas LLC Certificate of Formation and its expedite options, taken directly from the Texas Secretary of State's published fee schedule and its Texas Express expedited filing service as of August 2026.

A few things founders miss on this table. First, Texas launched its tiered Texas Express service in 2025, replacing a simpler flat expedite fee, so older guides quoting a single "$25 expedite fee" are describing a system Texas no longer uses. Second, the Next-Day and Same-Day tiers require in-person or email delivery rather than standard mail submission, so factor that into how you actually plan to file if speed matters. Third, because Texas does not commit to a fixed standard turnaround, a hard deadline is the main reason to pay for any of the three expedited tiers; day-to-day processing volume swings the standard timeline more than most other states covered in this series.

4. Adopt an operating agreement

Texas does not require you to file an operating agreement with the state, similar to Delaware, and that leads some first-time founders to skip it entirely. Skip it and you are running the LLC on the Texas Business Organizations Code's default rules, which were not written with your specific business in mind and rarely match what the members actually intended. You should have a real operating agreement in place before the LLC signs its first contract, opens its first bank account, or takes its first dollar. The agreement sets ownership percentages, capital contributions, voting rights, how profits and losses get allocated, what happens if a member leaves, dies, or becomes incapacitated, and how disputes between members get resolved. Texas law gives LLC members broad freedom of contract here, and Texas courts, including the state's newer specialized business courts, will generally enforce whatever the members agreed to in writing. Single-member LLCs benefit from an operating agreement just as much as multi-member ones. It is one of the clearest pieces of evidence that your LLC is a genuinely separate legal entity from you personally, which matters if a creditor or plaintiff ever tries to pierce the corporate veil and go after your personal assets. Banks and future investors will also ask to see it before opening accounts or writing checks. Have a lawyer review anything beyond a plain, single-member structure, especially once you have multiple members with different contribution types, unequal ownership splits, or any plan to bring in outside capital later, and especially if you are setting up a series LLC.

5. Get an EIN from the IRS

Your Employer Identification Number (EIN) is the federal tax ID you will use to open a business bank account, hire employees, file taxes, and sign most vendor and payment-processor agreements. It is free directly from the IRS, so never pay a third party's "EIN filing fee" for the number itself. That fee is for someone else's paperwork handling, not for the EIN, which the IRS never charges for. If the LLC's responsible party has a Social Security Number or Individual Taxpayer Identification Number, apply online at irs.gov and receive the EIN immediately, the same session, no waiting. If you are a non-US founder without either, you apply by fax or mail using Form SS-4, since the IRS's online EIN tool requires a US taxpayer ID for the responsible party. That paper route can take several weeks rather than minutes, so plan around it if you are racing a deadline. A multi-member LLC needs an EIN regardless of how it plans to be taxed. A single-member LLC technically does not need one to exist, the IRS lets it use the owner's SSN by default, but you will need one anyway the moment you want to open a business bank account, since virtually no bank will open one on a personal SSN alone. Get the EIN as soon as your certificate of formation is approved, rather than waiting until you are standing at the bank. Keep the IRS's confirmation letter (the CP 575 or 147C) somewhere safe.

6. Open a business bank account

Keeping business money separate from personal money is not optional for an LLC, it is the operational habit that makes your liability protection real rather than theoretical. Commingling funds, paying personal expenses from the business account or vice versa, is the single fastest way for a court to disregard the LLC entirely and treat you as personally liable for its debts. Once your certificate of formation is approved and your EIN has arrived, opening a dedicated account should be one of your very first moves. Rho offers business checking built for companies that want more than a place to park cash: corporate cards with up to 2% cashback with Rho Platinum (terms apply), on up to $1M in eligible annual card spend, 1.25% standard, plus treasury, expense management, and invoicing on one platform. The application takes under 10 minutes, and approval does not depend on your entity type, a Texas LLC, an LLC formed anywhere else, or a Delaware C corp can all apply. Rho Incorporation currently supports Delaware C corporations, with LLC support coming soon, but banking for your LLC is available today regardless. Whatever bank you choose, confirm what it needs before you show up: most require the approved certificate of formation, the EIN confirmation letter, a government-issued ID for each authorized signer, and sometimes the operating agreement itself. Having all four ready in one folder turns account opening into a same-day task instead of a multi-visit one.

7. File your franchise tax report and set your compliance calendar

Texas has no state personal income tax, but that does not mean a Texas LLC owes the state nothing. Every LLC formed or doing business in Texas owes the state's franchise tax, sometimes called the margin tax, administered by the Texas Comptroller rather than the Secretary of State. For the 2026 report year, an LLC with total revenue at or below $2,650,000, the "no tax due" threshold, owes no franchise tax itself, but it typically must still file the required annual report with the Comptroller rather than skip filing entirely. Texas has also moved toward requiring beneficial ownership information as part of this annual filing for many entities, on top of the traditional Public Information Report corporations file, so check the Comptroller's current-year form requirements rather than assuming last year's format still applies. LLCs above the no-tax-due threshold calculate the tax on a margin basis (generally the lesser of a few defined formulas based on revenue) rather than on straight net income, at rates that vary by whether the business is a retailer or wholesaler versus most other industries. Unlike California and Florida, Texas does not charge the Secretary of State a separate annual report fee just to keep the LLC on file; the ongoing state-level obligation runs through the Comptroller's franchise tax and information report instead, which is why founders comparing states purely on recurring fees often underrate how much Texas actually saves in year two and beyond. Put these dates on your calendar the day your LLC is approved, not the week before they hit:

• May 15 each year: the Texas franchise tax report and associated information report, due to the Comptroller regardless of whether tax is actually owed.

• Your registered agent renewal date, separate from any state deadline.

• April 15 (typical): federal tax filing for LLCs taxed as partnerships or disregarded sole proprietorships.

• Your home-state annual report, if you registered somewhere else as a foreign LLC under step 8, on whatever schedule that state sets.

An LLC that falls out of good standing with the Comptroller can have its right to do business in Texas forfeited, which blocks financings, contracts, and expansion until it is brought current.

8. Register as a foreign LLC if you also operate in other states

Most Texas LLCs are formed by people who live and operate in Texas, so this step applies less often here than it does for an out-of-state Delaware entity. But if your Texas LLC also has an office, employees, or regular in-person operations in another state, you typically must register there as a foreign LLC, on top of staying current with the Texas Comptroller. That triggers a second filing fee set by that state, often a second registered agent, and a second set of ongoing fees and reports running alongside Texas's own franchise tax filing. This is the step founders skip most often when they expand into a second state after forming in Texas, usually because nobody explains it during the excitement of opening a new office. Skipping it risks fines, back taxes, and, in some states, losing the right to enforce contracts there until you register. If you will only ever operate in Texas, you can ignore this step entirely; it only applies once your business has a genuine physical presence somewhere else.

What a Texas LLC actually costs in year one

Add up every line from this guide and a typical Texas LLC, formed with standard (not expedited) processing and below the $2,650,000 no-tax-due franchise tax threshold, costs roughly $350 to $600 in its first twelve months, depending on which registered agent you pick. Here is the full breakdown:

Every year after the first drops the $300 formation fee, leaving just the registered agent renewal and the annual franchise tax filing as the recurring cost of keeping a Texas LLC in good standing, typically $50 to $300 a year for most small LLCs that stay under the no-tax-due revenue threshold. That figure does not include your home state's foreign-qualification fees and annual reports if step 8 applies to you, or the franchise tax itself if your revenue grows past $2,650,000.

What it costs to form the same LLC through a formation service instead

The state fee above is fixed no matter who files it for you. What changes is whether you pay a formation company on top of it, and what that company charges once the registered agent renews. The table below prices out a Texas LLC across the most common routes, using each provider's own published pricing.

Rho Incorporation is not an LLC formation option today, which is why it appears here as the C-corp alternative rather than a line-item competitor to ZenBusiness or LegalZoom on an LLC filing. If your Texas business will eventually raise venture capital, the C-corp column is worth studying closely, since that is the path most Texas startups end up on regardless of where they operate; if an LLC is the right call for your business, DIY or a budget formation service will beat all four of Rho's numbers on a pure LLC filing, since Rho does not currently file LLCs in any state. For the fuller ranking across every major formation provider, our breakdown of the cheapest incorporation services goes deeper on renewal pricing and the upsells to watch for.

Common mistakes to avoid when forming a Texas LLC

Most Texas LLC formations that go wrong fail in one of these six places. Checking this list against your own filing takes a few minutes and can save weeks of cleanup later.

• Assuming "no state income tax" means no state filing obligation at all. Texas LLCs still owe an annual franchise tax report to the Comptroller, even when the no-tax-due threshold means no actual tax is owed.

• Filing before your registered agent has actually consented. Texas requires the agent's written or electronic consent before you list them on the certificate; skipping this step is a common cause of rejected filings.

• Treating the operating agreement as optional paperwork. Texas's default statutory rules apply to any LLC that never adopts its own agreement, and those defaults rarely match what the members actually want.

• Applying for an EIN before the certificate of formation is approved. The IRS ties your EIN application to your legal entity's formation date, and applying too early, or with a name that does not exactly match your approved certificate, is a common source of mismatched IRS records that take months to untangle.

• Commingling personal and business funds from day one. Using a personal account for the LLC's first few transactions "just until the business account is open" is one of the most common ways new owners accidentally undermine their own liability protection.

• Underestimating series LLC administration. A Texas series LLC only protects each series from the others if you keep genuinely separate records and finances for each one; treating the series as an accounting convenience rather than a real separation defeats the entire point of setting one up.

• Assuming the standard filing will land on a predictable day. Texas does not publish a fixed non-expedited turnaround, and it moves with the Secretary of State's current backlog; check SOSDirect's own status before you promise a bank or a landlord a specific formation date.

Two more Texas registrations that trip founders up

The eight steps above form the LLC itself, but two additional Texas registrations catch founders off guard because neither one comes from the Secretary of State or the Comptroller's franchise tax office. If you plan to hire employees, you must register with the Texas Workforce Commission for unemployment tax purposes, which is separate from your EIN and separate from your LLC filing. Registration is generally required once you have paid wages that meet the state's liability thresholds, and the account you're assigned is used for ongoing unemployment tax reporting rather than a one-time filing. If your LLC sells or leases tangible personal property, or certain taxable services, in Texas, you need a sales and use tax permit from the Texas Comptroller, which is free to obtain. Selling taxable goods or services without a permit still creates a sales tax liability, it just means you find out about it later, with penalties and interest attached, rather than collecting correctly from the first sale. Neither of these registrations replaces or changes anything from the eight steps above; they run in parallel once your LLC actually starts operating and hiring, and both are free to register for even though the underlying tax obligations are not.

After the paperwork: run it like a company

Once the LLC exists on paper, the habits matter more than the documents ever will. Keep business and personal finances strictly separate, sign every contract in the LLC's name rather than your own, keep your registered agent's information current with the state, and file your franchise tax report with the Comptroller on time every year without exception. These habits, done consistently, are what actually preserve the liability protection you formed the LLC to get in the first place. Rho gives Texas LLCs a full financial stack from day one: business checking, corporate cards, treasury, expense management, and invoicing, all on one platform, so the operational side of running the company is handled the same day your EIN arrives. And if your business outgrows the LLC structure down the line, whether that means bringing on outside investors or simply wanting the option pool and QSBS benefits a C corp offers, Rho Incorporation is there as the Delaware C-corp path when you decide that fits, with LLC support coming soon for founders who want to start there directly. If you are weighing Texas against other high-volume formation states rather than assuming Texas is the right call, our guides to starting an LLC in California and starting an LLC in Florida cover the same eight steps for those states, and our Delaware LLC formation guide covers the classic out-of-state option most venture-track founders end up choosing instead. Revisit this guide each time something changes: a new member joins, your revenue crosses the no-tax-due threshold, or you start selling into a new state. The eight steps above only happen once, but the decisions behind them, which entity, which state, when to convert, are worth re-checking as the business grows rather than assuming the choice you made at formation is permanent, especially in a state where the franchise tax threshold and expedited filing tiers have both changed within the past year.