Setting Up a Business Partnership in Texas (2026)
Reviewed by DocDraft Legal Team · Texas · Last updated 2026-05-18
If two or more people want to do business together in Texas, the framework comes from the Revised Uniform Partnership Act as adopted in Texas. Texas has no state personal income tax; partnerships file the annual Texas Franchise Tax report (Form 05-158 series) with the Comptroller, plus federal Form 1065. Dissolution events are codified at Texas BOC section 11.051. Below are the Texas requirements on partner authority, optional filings, LLP / LP registration, tax returns, and dissolution.
Key Considerations
Texas treats LLPs and LPs as separate filings. Filed with the Texas Secretary of State on Form 701 Application for Registration of a Limited Liability Partnership. Filing fee $200 per partner, renewed annually. Filed with the Texas Secretary of State on Form 207 Certificate of Formation of a Limited Partnership under BOC Chapter 153.
Texas governs partnerships under the Revised Uniform Partnership Act. Texas adopted the Revised Uniform Partnership Act, recodified into the Business Organizations Code (BOC) Title 4, Chapter 152. BOC section 152.051(b) defines partnership formation. For general partnerships specifically, No state formation filing required for general partnerships. Texas allows but does not require statements of partnership authority under BOC Chapter 152, Subchapter C.
After formation the partnership has periodic filings to keep up. Texas has no state personal income tax. Partnerships file an annual Texas Franchise Tax report (Form 05-158 series) plus Public or Ownership Information Report with the Texas Comptroller. Federal counterpart: IRS Form 1065. LLPs renew annually with the SOS under Texas BOC Chapter 152 Subchapter J. All taxable entities file the annual franchise tax report and PIR/OIR with the Texas Comptroller.
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Relevant Documents
For a Texas partnership the document stack runs from the agreement (private) through the state filings tied to Texas adopted the Revised Uniform Partnership Act, recodified into the Business Organizations Code (BOC) Title 4, Chapter 152. BOC section 152.051(b) defines partnership formation: LLP registration Filed with the Texas Secretary of State on Form 701 Application for Registration of a Limited Liability Partnership. Filing fee $200 per partner, renewed annually.; LP Certificate Filed with the Texas Secretary of State on Form 207 Certificate of Formation of a Limited Partnership under BOC Chapter 153.; the state partnership tax return Texas has no state personal income tax. Partnerships file an annual Texas Franchise Tax report (Form 05-158 series) plus Public or Ownership Information Report with the Texas Comptroller. Federal counterpart: IRS Form 1065.; the periodic entity report LLPs renew annually with the SOS under Texas BOC Chapter 152 Subchapter J. All taxable entities file the annual franchise tax report and PIR/OIR with the Texas Comptroller.; and the wind-up authority Texas BOC section 11.051 lists the five events requiring winding up of a domestic entity. Partnership-specific events of withdrawal are in BOC Chapter 152, Subchapter H
Buy-Sell Agreement
A contract that outlines what happens to a partner's share of the business if they die, become disabled, retire, or wish to sell their interest in the partnership.
Partnership Agreement
A comprehensive contract that outlines the rights, responsibilities, and obligations of all partners, including profit sharing, decision-making authority, capital contributions, dispute resolution, and dissolution procedures.
Partnership Capital Contribution Agreement
A document that specifies the initial and ongoing capital contributions of each partner, including cash, property, services, or other assets.
Partnership Operating Procedures
An internal document that details day-to-day operations, management responsibilities, and standard procedures for the partnership business.
Relevant Laws
Texas Business Organizations Code - Chapter 152: General Partnerships
This is the primary statute governing partnerships in Texas. It covers formation requirements, partner rights and duties, partnership property, and dissolution procedures. Anyone forming a partnership in Texas must comply with these provisions.
Texas Business Organizations Code - Section 152.051: Partnership Formation
Defines how partnerships are formed in Texas. An association of two or more persons to carry on a business for profit creates a partnership, regardless of whether they intend to create a partnership. No filing with the state is required to form a general partnership, though it's recommended to have a written agreement.
Texas Business Organizations Code - Section 152.302: Partner Liability
Partners in a general partnership are jointly and severally liable for all debts and obligations of the partnership. This means each partner can be held personally responsible for the full amount of partnership debts, making understanding liability crucial when forming a partnership.
Texas Business Organizations Code - Chapter 153: Limited Partnerships
If you're considering a limited partnership structure instead of a general partnership, this chapter governs the formation and operation of limited partnerships in Texas, which provide liability protection for limited partners.
Texas Business Organizations Code - Section 152.203: Partnership Property
Defines how property is treated within a partnership. Property acquired by a partnership is property of the partnership and not of the partners individually. This affects ownership rights and creditor claims against partnership assets.
Texas Tax Code - Section 171.001: Franchise Tax
Partnerships in Texas may be subject to franchise tax reporting requirements. While general partnerships owned entirely by natural persons are exempt, other partnership structures may have tax obligations that should be understood before formation.
Texas Business & Commerce Code - Chapter 71: Assumed Business Names
If your partnership will operate under a name other than the surnames of all partners, you must file an assumed name certificate (DBA) with the county clerk in each county where the business has a presence.
Regional Variances
Major Metropolitan Areas
Houston has additional local business registration requirements through the Houston One Stop Business Center. Partnerships operating in Houston may need to obtain specific permits depending on the industry, and the city offers specialized small business development resources through the Houston Business Development Inc.
Dallas requires partnerships to register with the Dallas County Clerk if doing business under an assumed name. The city also has its own zoning regulations that may affect where certain partnership businesses can operate, and offers tax incentives for partnerships establishing in designated enterprise zones.
Austin has stricter environmental regulations that may affect partnerships in certain industries. The city requires additional permits for businesses in the entertainment, food service, and tech sectors. Austin also offers specific incentives for green businesses and tech startups forming as partnerships.
Border Regions
Partnerships in El Paso have unique opportunities for international trade due to proximity to Mexico. The city offers specific programs for cross-border partnerships and has additional requirements for import/export businesses. Partnerships may need to register with both Texas and federal authorities for international commerce.
Laredo partnerships engaged in international trade face additional regulations and documentation requirements. The city has specific zoning for warehousing and logistics businesses, and partnerships in these sectors must comply with both local ordinances and federal customs regulations.
Rural Counties
Partnerships in rural West Texas counties may qualify for special agricultural exemptions and incentives not available in urban areas. These counties often have simplified permitting processes but may have limited access to business support services. Oil and gas partnerships have specific registration requirements with county clerk offices.
East Texas counties often have timber and agricultural industry-specific regulations affecting partnerships in these sectors. Some counties offer tax abatements for partnerships creating jobs in economically disadvantaged areas. Local economic development corporations may provide additional support and requirements for new partnerships.
Suggested Compliance Checklist
Verify that the arrangement meets the statutory definition of a partnership in Texas
Before formation days after startingTexas adopted the Revised Uniform Partnership Act, recodified into the Business Organizations Code (BOC) Title 4, Chapter 152. BOC section 152.051(b) defines partnership formation.
Decide how partner agency will work and write it into the agreement
During drafting days after startingThe default rule in Texas is: Texas BOC section 152.301: each partner is an agent of the partnership for the purpose of its business.
Register the entity if liability protection is wanted
At formation days after startingFiled with the Texas Secretary of State on Form 701 Application for Registration of a Limited Liability Partnership. Filing fee $200 per partner, renewed annually. Filed with the Texas Secretary of State on Form 207 Certificate of Formation of a Limited Partnership under BOC Chapter 153.
Calendar the state partnership tax return
After formation days after startingTexas has no state personal income tax. Partnerships file an annual Texas Franchise Tax report (Form 05-158 series) plus Public or Ownership Information Report with the Texas Comptroller. Federal counterpart: IRS Form 1065.
Add the periodic report to the entity-maintenance calendar
Ongoing days after startingLLPs renew annually with the SOS under Texas BOC Chapter 152 Subchapter J. All taxable entities file the annual franchise tax report and PIR/OIR with the Texas Comptroller.
Plan for dissolution events in advance
During drafting days after startingTexas BOC section 11.051 lists the five events requiring winding up of a domestic entity. Partnership-specific events of withdrawal are in BOC Chapter 152, Subchapter H.
Centralize the entity records
Ongoing days after startingHold the agreement, any filed statements, registration documents, EIN confirmation, and the ongoing report and tax filings in one place.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Verify that the arrangement meets the statutory definition of a partnership in Texas | Texas adopted the Revised Uniform Partnership Act, recodified into the Business Organizations Code (BOC) Title 4, Chapter 152. BOC section 152.051(b) defines partnership formation. | - | Before formation |
| Decide how partner agency will work and write it into the agreement | The default rule in Texas is: Texas BOC section 152.301: each partner is an agent of the partnership for the purpose of its business. | partnership-agreement | During drafting |
| Register the entity if liability protection is wanted | Filed with the Texas Secretary of State on Form 701 Application for Registration of a Limited Liability Partnership. Filing fee $200 per partner, renewed annually. Filed with the Texas Secretary of State on Form 207 Certificate of Formation of a Limited Partnership under BOC Chapter 153. | - | At formation |
| Calendar the state partnership tax return | Texas has no state personal income tax. Partnerships file an annual Texas Franchise Tax report (Form 05-158 series) plus Public or Ownership Information Report with the Texas Comptroller. Federal counterpart: IRS Form 1065. | - | After formation |
| Add the periodic report to the entity-maintenance calendar | LLPs renew annually with the SOS under Texas BOC Chapter 152 Subchapter J. All taxable entities file the annual franchise tax report and PIR/OIR with the Texas Comptroller. | - | Ongoing |
| Plan for dissolution events in advance | Texas BOC section 11.051 lists the five events requiring winding up of a domestic entity. Partnership-specific events of withdrawal are in BOC Chapter 152, Subchapter H. | - | During drafting |
| Centralize the entity records | Hold the agreement, any filed statements, registration documents, EIN confirmation, and the ongoing report and tax filings in one place. | - | Ongoing |
Frequently Asked Questions
On a recurring basis in Texas, a partnership has two cost lines. State tax: Texas has no state personal income tax. Partnerships file an annual Texas Franchise Tax report (Form 05-158 series) plus Public or Ownership Information Report with the Texas Comptroller. Federal counterpart: IRS Form 1065. Periodic report: LLPs renew annually with the SOS under Texas BOC Chapter 152 Subchapter J. All taxable entities file the annual franchise tax report and PIR/OIR with the Texas Comptroller. When the partnership eventually winds up, the controlling statute is Texas BOC section 11.051 lists the five events requiring winding up of a domestic entity. Partnership-specific events of withdrawal are in BOC Chapter 152, Subchapter H.
Forming a general partnership in Texas has no state filing fee because no state filing is required to create one under the state partnership act (Texas adopted the Revised Uniform Partnership Act, recodified into the Business Organizations Code (BOC) Title 4, Chapter 152. BOC section 152.051(b) defines partnership formation.). Registering an LLP or LP, however, does. LLP registration: Filed with the Texas Secretary of State on Form 701 Application for Registration of a Limited Liability Partnership. Filing fee $200 per partner, renewed annually. LP Certificate: Filed with the Texas Secretary of State on Form 207 Certificate of Formation of a Limited Partnership under BOC Chapter 153.
By default in Texas, Texas BOC section 152.301: each partner is an agent of the partnership for the purpose of its business. That default can be modified by the partnership agreement, but third parties acting in good faith may still rely on the statutory default unless they have notice of the restriction. The governing partnership-act chapter is Texas adopted the Revised Uniform Partnership Act, recodified into the Business Organizations Code (BOC) Title 4, Chapter 152. BOC section 152.051(b) defines partnership formation.
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