How to Form an LLC in Texas (2026)
Reviewed by DocDraft Legal Team · Texas · Last updated 2026-08-06
A limited liability company (LLC) is a business structure that legally separates the company from the people who own it, so the owners are generally not personally responsible for the company's debts. Forming one in Texas means filing a formation document with a state agency and paying its fee to bring the company into legal existence. In Texas you create an LLC by filing the Certificate of Formation (Form 205) with the Texas Secretary of State and paying a $300 filing fee. Two features shape the real cost of running a Texas LLC. First, Texas has no personal state income tax, but every LLC must file an annual franchise tax report and a Public Information Report with the Texas Comptroller, though no tax is due if annualized revenue falls below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025. Second, the Public Information Report replaces the yearly information filing many states send to their Secretary of State, and it carries no separate fee. Texas LLCs are governed by the Texas Business Organizations Code, Title 3, Chapter 101. This guide explains what an LLC is, the exact Texas steps and fees, and the deadlines that keep the company in good standing.
Find out where you stand in Texas
Where are you in forming your LLC?
DocDraft provides document preparation, not legal advice.
How do you form an LLC in Texas?
File the Certificate of Formation (Form 205) with the Texas Secretary of State and pay the $300 filing fee. You must name a registered agent with a physical Texas street address who agrees to accept legal documents for the company. Online filings are typically processed in five to seven business days.
What is the Texas franchise tax for an LLC?
Texas LLCs owe franchise tax administered by the Texas Comptroller, but no tax is due if annualized total revenue falls below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025. Every LLC must still file the annual franchise tax report and a Public Information Report, even when zero tax is owed.
Does a Texas LLC have to file an annual report?
Texas requires an annual franchise tax report and a Public Information Report filed each year with the Texas Comptroller rather than the Secretary of State. The Public Information Report keeps the LLC's management and address current and carries no separate filing fee. These filings replace the yearly Secretary of State report used in many other states.
Does Texas require newspaper publication to form an LLC?
No. Texas does not require an LLC to publish notice of its formation in a newspaper. This is unlike New York, Arizona, and Nebraska, where publication is a condition of forming or operating. In Texas the Certificate of Formation filing and the ongoing Comptroller filings complete the process, with no separate publication step.
Texas LLC formation at a glance
You form a Texas LLC by filing the Certificate of Formation (Form 205) with the Texas Secretary of State for a $300 filing fee, which is higher than the filing fee in most states. What sets Texas apart is where the ongoing obligation lives. Texas has no annual report to the Secretary of State and no personal state income tax. Instead every LLC reports to the Texas Comptroller each year through a franchise tax report and a Public Information Report under the Texas Tax Code, Chapter 171. No franchise tax is due when annualized total revenue is below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025, yet the reports must still be filed. The Public Information Report has no fee and keeps the LLC's managers, members, and address current with the state. Every LLC must name and continuously maintain a registered agent with a physical Texas street address to accept legal documents. Texas does not require newspaper publication. You can reserve a name before filing for a $40 fee. The governing statute is the Texas Business Organizations Code, Title 3, Chapter 101, sections 101.001 and following.
Forming a two-owner Texas LLC, step by step
Suppose two friends in Austin want to open a small design studio as an LLC. First they search the Texas Secretary of State's SOSDirect system to confirm their name is available and includes a designator such as LLC, and they can reserve the name for a $40 fee while they prepare paperwork. Next they appoint a registered agent: one owner lives in Texas and agrees to serve, using a physical Texas street address, not a post office box, where legal papers can be delivered. They then file the Certificate of Formation (Form 205) with the Secretary of State and pay the $300 filing fee. The LLC legally exists once the Secretary of State files it, which for online filings typically takes five to seven business days. Because they have two members, they also write a company agreement setting each owner's percentage and how profits split, even though Texas does not require them to file it. They apply to the IRS for a free EIN so the partnership can file taxes and open a bank account. Finally they calendar their first Texas Comptroller filings: the annual franchise tax report and the Public Information Report. If the studio's annualized total revenue stays below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025, no franchise tax is due, but the reports still must be filed each year to keep the LLC in good standing.
Relevant Laws
Texas Business Organizations Code, Title 3, Chapter 101 (Limited Liability Companies)
Chapter 101 of the Texas Business Organizations Code governs the management, membership, and operation of every Texas LLC. It sets the default rules for member-managed and manager-managed companies, the rights and duties of members, and how the company may be governed by a company agreement. It works together with the formation rules in Title 1 of the Code.
Tex. Bus. Orgs. Code § 3.001 (Formation; Certificate of Formation)
Requires a Texas LLC to be formed by filing a certificate of formation with the Texas Secretary of State. The Secretary of State provides this as Form 205, which states the LLC's name, its registered agent and registered office, whether it is member-managed or manager-managed, its governing persons, and its purpose. The filing fee is $300.
Tex. Bus. Orgs. Code § 5.201 (Registered agent and registered office)
Requires every Texas LLC to designate and continuously maintain a registered agent and a registered office in Texas. The agent, an individual resident of Texas or a registered organization, receives lawsuits and official notices for the company. The registered office must be a physical Texas street address, not a post office box, and the agent's information goes on the Certificate of Formation.
Tex. Tax Code Chapter 171 (Franchise Tax)
Imposes the Texas franchise tax on taxable entities, including LLCs, and is administered by the Texas Comptroller of Public Accounts rather than the Secretary of State. An LLC owes no franchise tax when its annualized total revenue is at or below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025, but it must still file the annual franchise tax report.
Tex. Tax Code § 171.203 (Public Information Report)
Requires an LLC to file a Public Information Report with the Texas Comptroller each year alongside its franchise tax report. The report lists the LLC's registered agent and office, its principal office, and its managers or members, keeping that information current with the state. There is no separate fee for the Public Information Report.
IRS federal tax classification (default pass-through)
The IRS does not tax the LLC as a separate category. By default a single-member Texas LLC is disregarded and taxed like a sole proprietorship, and a multi-member LLC is taxed as a partnership, with income passing through to the owners. An LLC may instead elect S corporation or C corporation treatment. This federal classification is separate from the Texas franchise tax, which applies regardless of the federal choice.
Regional Variances
How forming an LLC in Texas differs from other states
A $300 filing fee, higher than most states
Texas charges $300 to file the Certificate of Formation (Form 205), one of the higher formation fees in the country. Many states charge between $50 and $150. The higher upfront cost is a one-time fee, and it stands in contrast to states that pair a low filing fee with a steep recurring tax.
No annual report to the Secretary of State
Unlike most states, Texas does not require an annual report filed with the Secretary of State. Instead the yearly obligation is the franchise tax report and Public Information Report filed with the Texas Comptroller. Owners who expect a Secretary of State renewal can miss the Comptroller deadline because it lives with a different agency.
Franchise tax with a no-tax-due threshold
Texas has no personal state income tax, and its franchise tax only produces a bill above a revenue threshold. No tax is due when annualized total revenue is at or below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025. Smaller LLCs commonly owe zero franchise tax but must still file the report.
No newspaper publication requirement
Texas does not require you to publish notice of formation in a newspaper. New York, Arizona, and Nebraska do, which adds cost and a deadline. A Texas LLC is complete once the Secretary of State files the Certificate of Formation, with no publication step.
Formation document and filing office
Texas uses the Certificate of Formation (Form 205), filed with the Texas Secretary of State. Some states call the document Articles of Organization or a Certificate of Organization, and some route filings through a Division of Corporations or a Department of State rather than the Secretary of State.
Suggested Compliance Checklist
Confirm your LLC name is available and compliant
Before filing days after startingSearch the Texas Secretary of State's records through SOSDirect to confirm your desired name is not already in use and that it includes a required designator such as LLC or Limited Liability Company. Avoid restricted words that need special approval. You can reserve an available name with the Secretary of State for a $40 fee while you prepare your Certificate of Formation.
Appoint a registered agent
Before filing days after startingTexas requires a registered agent with a physical Texas street address, the registered office, who is available to accept legal documents. Decide whether you, a co-owner who lives in Texas, or a commercial registered agent service will serve. You will name the agent on the Certificate of Formation, so settle this first, and confirm the agent has consented to serve.
File the Certificate of Formation (Form 205) with the Secretary of State
To create the LLC days after startingFile Form 205 with the Texas Secretary of State and pay the $300 filing fee. Online filings are typically processed in five to seven business days. The LLC legally exists only once the Secretary of State files it. Keep the filed confirmation as proof of formation.
Adopt a company agreement
At or soon after formation days after startingPut the ownership percentages, profit split, management structure, and exit rules in writing. Texas calls this a company agreement, and you do not file it with the state. It governs how the LLC runs and overrides the default rules in the Business Organizations Code. Attorney review of the agreement is available as an option through DocDraft.
Get a federal EIN from the IRS
Before opening a bank account or hiring days after startingApply for an Employer Identification Number free on the IRS website. Multi-member LLCs, LLCs with employees, and LLCs electing corporate tax treatment need one. Single-member LLCs with no employees usually get one anyway to open a business bank account and keep business and personal finances separate.
File the annual franchise tax report and Public Information Report
Each year with the Texas Comptroller days after startingEvery Texas LLC files a franchise tax report and a Public Information Report with the Texas Comptroller each year under Tax Code Chapter 171, not with the Secretary of State. No franchise tax is due when annualized total revenue is below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025, but the reports must still be filed. The Public Information Report has no fee.
Confirm whether franchise tax is owed
At each annual report days after startingCheck your LLC's annualized total revenue against the current no-tax-due threshold before each franchise tax report. If revenue is at or below the threshold, you owe no franchise tax but still file the report. If it rises above the threshold, you calculate and pay the tax. Confirm the current threshold and due dates with the Texas Comptroller, since tax provisions change.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Confirm your LLC name is available and compliant | Search the Texas Secretary of State's records through SOSDirect to confirm your desired name is not already in use and that it includes a required designator such as LLC or Limited Liability Company. Avoid restricted words that need special approval. You can reserve an available name with the Secretary of State for a $40 fee while you prepare your Certificate of Formation. | - | Before filing |
| Appoint a registered agent | Texas requires a registered agent with a physical Texas street address, the registered office, who is available to accept legal documents. Decide whether you, a co-owner who lives in Texas, or a commercial registered agent service will serve. You will name the agent on the Certificate of Formation, so settle this first, and confirm the agent has consented to serve. | - | Before filing |
| File the Certificate of Formation (Form 205) with the Secretary of State | File Form 205 with the Texas Secretary of State and pay the $300 filing fee. Online filings are typically processed in five to seven business days. The LLC legally exists only once the Secretary of State files it. Keep the filed confirmation as proof of formation. | - | To create the LLC |
| Adopt a company agreement | Put the ownership percentages, profit split, management structure, and exit rules in writing. Texas calls this a company agreement, and you do not file it with the state. It governs how the LLC runs and overrides the default rules in the Business Organizations Code. Attorney review of the agreement is available as an option through DocDraft. | llc-operating-agreement | At or soon after formation |
| Get a federal EIN from the IRS | Apply for an Employer Identification Number free on the IRS website. Multi-member LLCs, LLCs with employees, and LLCs electing corporate tax treatment need one. Single-member LLCs with no employees usually get one anyway to open a business bank account and keep business and personal finances separate. | - | Before opening a bank account or hiring |
| File the annual franchise tax report and Public Information Report | Every Texas LLC files a franchise tax report and a Public Information Report with the Texas Comptroller each year under Tax Code Chapter 171, not with the Secretary of State. No franchise tax is due when annualized total revenue is below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025, but the reports must still be filed. The Public Information Report has no fee. | - | Each year with the Texas Comptroller |
| Confirm whether franchise tax is owed | Check your LLC's annualized total revenue against the current no-tax-due threshold before each franchise tax report. If revenue is at or below the threshold, you owe no franchise tax but still file the report. If it rises above the threshold, you calculate and pay the tax. Confirm the current threshold and due dates with the Texas Comptroller, since tax provisions change. | - | At each annual report |
Frequently Asked Questions
An LLC, or limited liability company, is a business structure that separates the company from its owners as a matter of law. The owners, called members, are generally not personally liable for the company's debts or lawsuits, so a creditor usually cannot reach a member's home or personal savings for a business obligation. In Texas, LLCs are created and governed under the Texas Business Organizations Code, Title 3, Chapter 101. An LLC pairs that liability protection with pass-through taxation and lighter paperwork than a corporation.
You create a Texas LLC by filing the Certificate of Formation, known as Form 205, with the Texas Secretary of State and paying a $300 filing fee. Some states call this document Articles of Organization, but Texas uses the Certificate of Formation. The $300 fee is one of the higher formation fees in the country and is paid once. Your LLC legally exists only after the Secretary of State accepts and files the certificate.
Often not. Texas imposes a franchise tax on LLCs through the Comptroller, but no tax is due when annualized total revenue is at or below the no-tax-due threshold, which was $2.47 million for report years 2024 and 2025. Many small Texas LLCs fall under that threshold and owe zero franchise tax, yet they must still file the annual franchise tax report each year. Confirm the current threshold with the Comptroller, since it changes over time.
The Public Information Report, or PIR, is a yearly filing every Texas LLC submits to the Texas Comptroller alongside its franchise tax report under Tax Code Chapter 171. It lists the LLC's registered agent, registered office, principal office, and managers or members, keeping that information current with the state. The Public Information Report carries no separate filing fee. It effectively replaces the yearly Secretary of State report that many other states require.
No, and this trips up many owners. Unlike most states, Texas has no annual report filed with the Secretary of State. The recurring yearly obligation is the franchise tax report and Public Information Report, both filed with the Texas Comptroller, a different agency. Owners who watch only for a Secretary of State renewal notice can miss the Comptroller deadline, so calendar the Comptroller filings each year to keep the LLC in good standing.
Yes. You can reserve an available name with the Texas Secretary of State for a $40 fee while you prepare your Certificate of Formation, which holds the name so another filer cannot take it. First search the Secretary of State's SOSDirect system to confirm the name is available and includes a required designator such as LLC or Limited Liability Company. Reservation is optional; you can also just file the certificate directly once your name clears.
By default the IRS disregards a single-member Texas LLC and taxes it like a sole proprietorship, with income reported on the owner's return, while a multi-member LLC is taxed as a partnership. An LLC can instead elect S corporation or C corporation treatment. This federal choice is separate from the Texas franchise tax, which applies to the LLC regardless of how it is taxed federally. Attorney review of your setup is available as an option through DocDraft.
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