Form a Texas LLC Without Guessing at the Process

Run a business as a sole proprietor and there is no legal daylight between you and the company. A customer who trips on your property, a vendor you can't pay, a contract that goes sideways: all of it lands on you personally. Your truck, your savings, the equity in your house: none of it is walled off. A limited liability company exists to build that wall.

Texas recognizes LLCs under the Business Organizations Code (the BOC), the statute that governs how the company is formed, run, and wound down. Once your LLC is on file and active, the company is the legal actor. It signs the leases, holds the bank accounts, and is the party named if someone sues. The members (the owners of an LLC) are generally not on the hook for the company's debts or judgments, provided the business is run as a genuine separate entity.

What the liability shield really protects

"Limited liability" is not a force field. It shields you from the ordinary debts and lawsuits of the business, not from your own conduct. If you personally sign a guarantee on a lease or a loan, you owe that money regardless of the LLC. If you run personal expenses through the company account or vice versa, a creditor can ask a court to "pierce the veil" and reach you directly. The shield holds when you keep the line clean: a dedicated business bank account, honest books, and contracts signed in the company's name rather than yours.

For most Texas operators (contractors, consultants, e-commerce sellers, landlords, service businesses) the LLC lands in the right spot. It carries far less ceremony than a corporation (no board, no mandatory annual meetings unless you write them into your own agreement), yet it delivers the same core protection that a sole proprietor simply does not have.

The Texas tax picture

Texas has no personal state income tax, which is a real advantage before you even file anything. By default the IRS treats a single-member LLC as a disregarded entity. You report the business on Schedule C of your personal return. A multi-member LLC is taxed as a partnership by default, with profit and loss flowing through to the members' own returns. You can elect S-corporation or C-corporation treatment with the IRS if the numbers justify it, which is a conversation for your accountant once profit gets meaningful. At the state level, Texas does levy a franchise tax, but most small LLCs fall under the no-tax-due threshold and owe nothing beyond an informational filing, which is covered further down.

The formation filing in Texas is the Certificate of Formation (Form 205) filed with the Texas Secretary of State. If you're coming from another state you may know this document as the "articles of organization"; Texas simply uses a different name for the same thing. The state fee is $300, online or by mail. Online filing moved to SOSPortal on September 29, 2026, replacing both SOSDirect and SOSUpload. Old SOSDirect client accounts did not carry over, so a first-time filer opens a new SOSPortal account (with multifactor sign-in), picks the Business Filings tile, completes the form and checks out. The portal takes ACH or a card, and a card payment carries a convenience fee of 25 cents plus 2.25% of the total, which puts the $300 filing at $307.00. Paper filings still go by mail to P.O. Box 13697, Austin, TX 78711-3697, or in person at 400 W. 15th Street in Austin. The full fee schedule is the state's Form 806.

The Certificate of Formation is short. It captures the company name, the registered agent's name and Texas street address, whether the LLC is run by managers or by its members, the name and address of each initial governing person, a mailing address where the Comptroller should send franchise tax correspondence, and the organizer who signs the filing. You do not disclose ownership percentages or capital, and the purpose clause comes pre-printed on the form. Keep in mind that the governing persons' names and addresses become part of the public record.

How long it takes

The Secretary of State doesn't publish a standard turnaround for a Certificate of Formation, so plan on some slack if a lease signing or a bank appointment depends on it. When timing matters, Texas sells speed through its Texas Express program, charged per document on top of the filing fee: $50 for standard expedited handling (typically 2 to 3 business days), $500 for next-day service, or $750 for same-day service on documents received by noon. The old flat $25 expedite is gone.

What goes on the Certificate of Formation

• Company name: must include "Limited Liability Company," "Limited Company," or an accepted abbreviation like "LLC," "L.L.C.," or "LC," and must be distinguishable from names already on file with the SOS.
• Registered agent and registered office: a Texas resident or a business entity authorized in Texas, at a street address where papers can be personally served on the agent during normal business hours. A mailbox service or answering service alone won't qualify, and the agent must have agreed to serve.
• Management structure: member-managed (the owners run it) or manager-managed (named managers run it and members can stay passive).
• Governing persons: the managers or managing members, depending on structure.
• Organizer: the person who signs and submits the certificate. The organizer does not have to be an owner.

Filing the Certificate of Formation is a one-time event. Staying in good standing is a yearly rhythm, and the Texas version trips people up because the main obligation does not go to the office that formed you.

Franchise tax and the Public Information Report

Texas does not make LLCs file a conventional annual report with the Secretary of State. Instead, every Texas LLC answers to the Texas Comptroller of Public Accounts each year through the franchise tax system. Two filings share the May 15 deadline: the franchise tax report itself, which you need only when revenue tops the threshold below, and the Public Information Report (Form 05-102), a free filing that lists your members, managers or officers on the public record. The first one is due May 15 of the year after the LLC becomes subject to the tax. The PIR does not change your registered agent; that takes a separate filing with the Secretary of State.

Here is the part that saves most small owners money: Texas sets a "no-tax-due" revenue threshold ($2.65 million for the 2026 and 2027 report years) and businesses under it owe zero franchise tax. You still have to file the Public Information Report on time even when no tax is owed, and a late report draws a $50 penalty. Skip the filing and the Comptroller can forfeit your right to do business, which cascades into a loss of good standing with the SOS. Details and the current forms are on the Comptroller's franchise tax page and the PIR/OIR requirements page.

Keeping your registered agent valid

Your registered agent has to stay reachable at a Texas street address for the life of the company. If the agent moves, resigns, or stops being available, you update the record with the SOS on Form 401, which costs $15. An LLC that fails to keep an agent risks involuntary termination, even if every franchise filing is current.

Licenses and permits

Texas has no general statewide business license, but plenty of trades and professions need their own licensure, and cities and counties may require local permits. If you sell taxable goods or services, you register for a sales-and-use tax permit with the Comptroller. None of these are handled by the SOS. They run on their own tracks.

Every Texas LLC has to name a registered agent at formation and keep one for as long as the company exists. The agent is the official channel between your business and the state, and the address where anyone suing your company must deliver legal papers.

What the agent receives

• Service of process: lawsuits, summonses, subpoenas
• Official notices from the Secretary of State and the Comptroller
• Compliance and forfeiture warnings

The registered office has to be a real Texas street address where the agent can be handed papers in person during normal business hours. Texas says outright that a mailbox service or a telephone answering service can't be the office on its own.

Your choices

You can be your own agent if you have a Texas street address and don't mind that it becomes part of the public SOS record, which is searchable and indexed online. You can appoint a trusted individual: a partner, an employee, an attorney. Or you can hire a commercial registered agent, which keeps a professional address on the public record instead of your home, and guarantees someone is always there to accept documents even when you're traveling or the shop is closed. The LLC itself can't be its own agent. Whoever you name has to agree to the job first; you don't file their consent with the state, but signing the Certificate of Formation affirms that you have it.

Mainstay Filing handles the formation paperwork so you're not setting up a new SOSPortal account on your own, second-guessing a field on the Certificate of Formation, or wondering whether you've met every requirement Texas has.

You give us what the state needs (your company name, your addresses, your management preference, and your registered agent choice), and we prepare the Certificate of Formation, submit it to the Secretary of State, and return the filed documents once Texas processes them. Registered agent service is included, so your home address stays off the public record and there's always a professional address ready to receive state mail and legal process on your behalf.

After you're formed, we flag the May 15 franchise deadline and can handle the Public Information Report so it doesn't slip. The point is to get your entity active and keep it in good standing without you having to become fluent in SOS and Comptroller procedure.

What we don't do

We file; we don't practice law. We don't give legal or tax advice or referee equity splits between partners. That's work for an attorney or a CPA. What we do is make sure the state-facing filings are correct and on time so you can put your attention on the business.