We’ve put together a free step-by-step guide on how to set up an LLC in Texas. We want you to have a clear idea of how to set up and manage an LLC for your state. We’ve tried to make sure you have the information you need right at your fingertips. Each step has instructions and links to the sites for you to fill out the forms in the correct order. So, let’s set up your Texas LLC right now!
A few points to remember before setting up your LLC in Texas
When you set up an LLC in Texas, you’ll need a few things before you get started. This section will help you get your checklist in order.
A Unique Business Name
Every business in the state must be unique. You’ll need to search for a Texas LLC name. Go to Taxable Entity Search to make sure yours is not taken.
An LLC Designator
You must have an LLC designator in your name in one of the following formats.
- LLC (most common)
- L.L.C.
- LC
- L.C.
- Ltd. Co.
- Ltd. Company
- Limited Company
- Limited Liability Company
Now that you have your unique business name, it’s time to register it with the state of Texas. Let’s get down to business.
A Registered Agent
In most states, a registered agent is a person or a company that accepts “Service of Process” for your Texas LLC. A registered agent will receive any subpoenas, notices, and other legal, and tax documents sent to your business by the Texas Comptroller.
If you’re opening a business in Texas but you aren’t a resident, you’ll need to get a registered agent in that state. The requirements for a registered agent are as follows:
An Individual:
- Must be 18 and be a resident of the state
- Must be authorized to do business in the state.
- Must have a physical street address located in Texas
A Company
- Must be authorized to do business in the state
If you meet the above criteria, you can be your own registered agent. Or you can set up a friend or family member to be your registered agent.
You can also hire a commercial Registered Agent. A company that provides their name and address to receive legal documents from the state.
Hot Tip
The nice part of using a company is that their address is used instead of yours. As the business address will be public knowledge. By using a registered agent, you can protect and secure your own address.
Step 1: Register Your Business Name
To set up an LLC in Texas you need to reserve your business name. This way during the process no one can steal the name of your company.
You’ll need to reserve your name online, or you can print out the name reservation form and send it by mail.
Your name reservation will be up to 120 days and the filing fee is $40.
Step 2: File Your Articles of Organization in Texas
Setting up an LLC in Texas is easy, especially for single-member LLCs. Just go and sign up for the SOSDirect.
You can just directly file the Articles of Organization even without a reservation. Easy peasy.
If you don’t want to file online, you can download and print out the Articles of Organization form and follow the instructions.
Fees: In Texas, the cost of setting up your LLC and filing the Articles of Organization is $300. It takes 2-3 business days to get approval for online filing. While it takes 5-7 business days for mail filing.
Step 3: Complete Your Texas LLC Operating Agreement
An operating agreement is a key document used by LLCs and partnerships. It outlines the business’ financial and functional decisions including rules, regulations, and provisions. This describes how your LLC will operate internally. For more information on operating agreements, you can check out the Small Business Administration’s article on basic operating agreements.
Hot Tip
You are not required to file an Operating Agreement with your state. But it may be vital to have it, especially if there are multiple members of your LLC.
Step 4: Get Your Federal Tax ID Number (EIN)
Once your Texas LLC has been approved it’s time to get your Federal Tax ID Number from the IRS.
Your EIN is the social security number of your business. Keep it well protected. You’ll use this number to open bank accounts, file tax documents, apply for loans, and many other uses. It also protects your social security number when doing business with other businesses like merchant accounts, 1099s received, etc.
To apply for your EIN you can go to IRS EIN/Tax ID Application. Make sure you pick the correct Business Entity Type.
Quick Note
You can only file online if you have a Social Security Number (SSN) or Taxpayer ID (ITIN). Otherwise, you’ll have to mail in the forms and wait for the response. If you don’t have an SSN, on Form SS-4, where it asks for your SSN, ITIN, or EIN (line 7b), write “Foreign”. Your EIN application will then be approved without the need for having an SSN.
Step 5: File Your Texas LLC Franchise Tax Report and Public Information Report
Your Texas LLC is required to file a Franchise Tax Report and Public Information Report on whether or not your LLC has tax due. It can only be filed online at the Texas Comptroller’s website.
To file the Franchise Tax Report, go to eSystems.
Fees: You are to file a NO TAX DUE REPORT if your annual revenue does not exceed $1,230,000. Use the graduated tax schedule if you exceed the threshold amount.
Your report is due on May 15th of each year. Late filings will result in a $50 charge plus a penalty of 5% or 10% of your tax due if you file more than a month late from the due date.
Taxes, Permits, and Licensing in Texas
To do business in Texas you will need to file tax returns, and hold permits and licenses in your county or city.
Texas LLC must apply for the necessary business licenses and or permits. This depends a lot on the type of business and the location of your business.
Aside from business licenses and permits, all LLCs must also pay appropriate taxes and meet obligations with the Texas Comptroller.
Never miss a deadline
Not sure which forms to file with the IRS and your State after you set up your new business?
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Putting it All Together
Now that you can set up an LLC in Texas online it shouldn’t take more than a day or two to get up and running. The Texas Secretary of State’s website is very easy to navigate and following the five steps above will help you get your talents and ideas to market faster.
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