How Much Does it cost to Start an LLC in Texas

Texas LLC Costs Summary

Here is a brief summary of the key LLC costs you will incur in starting your business in Texas:

Item	Cost
Certificate of Formation (state filing fee)	$300
Business licenses and permits	Varies (no general state license)
Registered agent (required; hiring a service is optional)	$0 if you serve yourself, or $50–$300 per year
Operating agreement (optional)	$0–$1,000
Reserve business name (optional)	$40 (120 days)
Assumed name certificate (optional)	$25
Franchise tax	$0 at or below $2.65 million in revenue; 0.375%–0.75% of taxable margin above it
Public Information Report (annual, by May 15)	$0

There’s a myth that forming an LLC in Texas is expensive. However, the cost depends on the type of business that you are forming. The LLC Texas cost structure includes some standard fees all LLCs pay and others that vary based on the business type.

Again, knowing the right steps to take, or having a dedicated strategic partner to help, can make all the difference.

Costs When Forming a Texas LLC

How much does an LLC cost in Texas? There’s no one answer. There are mandatory and optional costs, and some vary. Let’s go over the costs of initially setting up an LLC in Texas:

Naming your Texas LLC (optional name reservation fee)

Texas law mandates that any legal entity have a distinct name that is recorded with the Secretary of State. The name must be different from other filed entities, including foreign-filed entities.

You can conduct a TX SOS business search by contacting the Texas Secretary of State’s office at (512) 463-5555 or dialing 7-1-1 for relay services or by e-mailing your desired name to the Corporations Section at [email protected].

Once you’ve chosen a name, you can file Form 501 by mail or online through SOSPortal. Reserving a name costs $40 and holds it for 120 days.

The legal name for your LLC will be on the filed formation documents. You can also use a doing-business-as (DBA) name. The DBA is a way for the public to identify your company for standard business.

If your LLC does business under any name other than its legal name, file Form 503, an Assumed Name Certificate, with the Secretary of State. The fee is $25, and it lasts up to 10 years. LLCs don’t file with the county clerk. Learn more about getting a DBA in Texas.

Certificate of Formation filing fee

Many states call the formation document articles of organization. In Texas, when you start a new business as an LLC, you file a Certificate of Formation (Form 205) with the Secretary of State. It creates your LLC and puts basic details on the public record. The filing fee is $300.

The Certificate of Formation asks for the following information:

• Company name
• Registered agent and registered office address
• Whether the company has managers
• The name and address of each initial manager (or each initial member, if there are no managers)
• A mailing address for franchise tax correspondence
• Supplemental provisions or information
• The organizer’s name and address
• When the filing takes effect: when filed, on a later date up to 90 days after signing, or when a future event happens
• Date
• Signature

Registered agent service (optional)

A registered agent is an important and necessary step to take when forming an LLC. A registered agent acts as your designee and can receive legal filings on your behalf.

Some people choose to serve as their own registered agent in Texas. In such cases, there is no cost if they live in Texas. However, it’s a smart idea to consider hiring a registered agent service.

Using a registered agent service is a prudent move, allowing you to have the freedom and flexibility to concentrate on your business. You can also gain peace of mind knowing someone else is available to receive legal documents privately.

Registered agent services typically cost $50–$300 per year. Tailor Brands’ registered agent service is $199 per year.

Cost of creating an operating agreement (optional)

Texas doesn’t require an operating agreement (it calls it a “company agreement,” which can be written, implied or oral), and you don’t file it with the state. However, it is a smart idea to create one. An operating agreement lays out the ownership structure of your LLC and its basic organizational structure. In a typical operating agreement, you will list:

• LLC members and the ownership percentage of each
• Rights and responsibilities of your members
• Membership structure (member-managed or manager-managed)
• Rules and processes for buy-ins and sell-outs
• How assets are distributed if the LLC is dissolved
• Rules for when a member leaves or dies
• Amendment procedures

You may choose to do this work yourself. However, hiring a lawyer for such legal documents, or using the Tailor Brands operating agreement service, is a better choice. The cost is anywhere from $0 to $1,000.

Other Annual and Additional Texas LLC Costs

In addition to the formal fees for various services, there are other required fees, taxes and permitting costs for an LLC in Texas.

Franchise tax

Like other types of Texas businesses, an LLC is subject to an annual franchise tax. It is called a “privilege tax” and is imposed on each taxable entity that is formed, organized or doing business within the state.

The cost of the franchise tax depends on the type of entity doing business. The tax is 0.375% of taxable margin for retail and wholesale businesses and 0.75% for others. Businesses with $20 million or less in revenue can use the EZ computation instead, at 0.331% of apportioned revenue.

LLCs with annualized revenue of $2.65 million or less owe no franchise tax (2026 and 2027 reports). They don’t file a No Tax Due Report, but they still file a Public Information Report. The compensation deduction is capped at $480,000 per person.

Business licenses & permits

All Texas businesses that sell tangible personal property in Texas must obtain a sales tax permit. There is no fee for this permit, which can be obtained online.

Various types of businesses must acquire other licenses and permits to conduct business within the state. The types of licenses and permits, and the associated fees, vary widely based on the business type. Here are a few common licenses and permits, for example, for retail establishments:

• Abusable volatile chemicals permit ($57 every two years)
• Alcohol licenses and permits (varies)
• Lottery sales license (varies)
• Medical devices, equipment and supplies license (varies)
• Retail food establishments license (Based on business type and gross annual volume of food sales)

Annual report

Texas doesn’t have an LLC annual report. Instead, each LLC files a Public Information Report with the Comptroller by May 15 each year, along with its franchise tax report if it owes tax. There’s no fee.

The Public Information Report asks for basic information, including:

• Taxpayer number
• Taxpayer name and mailing address
• Principal office and place of business
• The name, title and mailing address of each officer, director, member, general partner or manager, with their term expiration date
• Ownership interests held by or held of the LLC by other business entities of 10 percent or more
• Registered agent name, office and address (changes are filed with the Secretary of State, not on the PIR)
• Signature

What Expenses You Can Write Off

There’s good news when it comes to filing your taxes related to your Texas LLC. You can generally deduct up to $5,000 of startup costs and $5,000 of organizational costs in your first year and amortize the rest; check with a tax professional. Costs that may qualify include:

• Cost of preparing your Certificate of Formation
• Filing fees
• DBA fees
• Operating agreement costs
• Registered agent costs
• Attorney and bookkeeping fees

Texas LLC State Filing Fees

Here is a list of the LLC related filing fees in Texas, taken from the Secretary of State’s fee schedule.

Fee type	Fee cost
Certificate of Formation	$300
Name reservation or renewal (120 days)	$40
Assumed name certificate	$25
Certificate of amendment	$150
Restated certificate of formation	$300
Certificate of merger or conversion	$300
Change of registered agent or office	$15
Certificate of correction	$15
Certificate of termination	$40
Reinstatement after voluntary termination	$15
Reinstatement after tax forfeiture	$75
Reinstatement after involuntary termination	$75
Preclearance of any filing instrument	$50
Standard expedite	$50
Next-day expedite	$500
Same-day expedite	$750
Certificate of fact or status	$15
Application for Registration to do Business (foreign LLC)	$750

When you start a new business in Texas, like in any other state, you should take into account all expected expenses. Check out this guide about starting a business in Texas for more information. 

Conclusion

Forming an LLC takes careful planning and understanding of the steps and fees. It’s an exciting process that helps spell out how the company will operate, its name and its business structure.

Using a trusted partner to coordinate the various business filings, processes and documents allows you to focus on other key work on behalf of your LLC. To learn more about how Tailor Brands can help with your Texas LLC filings, contact us today.

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