Start a Texas LLC: The Steps in the Order You Do Them

Your LLC's name has to be distinguishable from every other entity already on file with the Texas Secretary of State. That means corporations, limited partnerships, registrations and pending name reservations, not just other LLCs. "Distinguishable" is a legal test, not a gut feeling. Names that differ only by punctuation, spacing, an "s," or filler words like "the" and "company" often fail it.

Texas runs its business records search through SOSPortal, which charges a $1.00 statutory fee for each search. It's worth doing before you file, because a name conflict gets your Certificate of Formation rejected and sets you back days. The Secretary of State will also give a preliminary opinion on a name by phone at 512-463-5555 or by email, though it warns that a final determination can't be made until the actual filing is received and processed.

Naming rules to clear

• The name must include "Limited Liability Company," "Limited Company," or an accepted abbreviation: "LLC," "L.L.C.," "LC," or "L.C."
• It cannot falsely imply a government agency or a purpose the LLC isn't authorized for.
• Words like "bank," "trust," "insurance," or professional-practice terms may require approval from the relevant Texas regulator before the SOS will accept them.
• It has to be distinguishable from all active names on file with the SOS.

Holding a name before you file

Not ready to form yet but want to lock the name? Texas lets you reserve a name for 120 days by filing Form 501 with a $40 fee, and you can renew the reservation during its last 30 days. The reservation holds the name. It does not create the company.

Operating under a different name (DBA)

If you'll do business under a name other than the LLC's legal name, you register an assumed name with the SOS on Form 503. A Texas assumed-name certificate for an entity can run up to ten years before renewal. It's a separate filing from forming the LLC.

Before you can file, you need a registered agent chosen and willing to serve, because the agent's name and Texas address go directly on the Certificate of Formation. The agent is who receives lawsuits, state notices, and Comptroller correspondence on the company's behalf.

The registered office has to sit at a Texas street address where legal papers can be personally served on the agent during normal business hours. Under BOC § 5.201 it can't be solely a mailbox service or a telephone answering service. The agent also has to agree to the appointment before you file. You don't send the state a copy of that consent, but signing the Certificate of Formation affirms that the agent gave it.

Who can be your agent

• You: allowed if you're a Texas resident with a Texas street address and can be found there during business hours. Your address becomes part of the public SOS record.
• Another individual: any Texas resident with a street address who agrees to serve, such as a co-owner, an employee, or your attorney.
• A commercial registered agent: a business entity formed in Texas, or a foreign entity registered to do business here. It keeps its own professional address on the public record instead of yours and has staff on hand to accept service. The one thing that can never be your agent is the LLC itself.

Why the pick matters

Whatever address you list as the registered office shows up in the searchable SOS record. Use your house and anyone can find it. That's the main reason owners hire a commercial agent: to keep a home address private and to avoid missing a served lawsuit because they happened to be out. If you travel or keep irregular hours, a commercial agent also keeps you on the right side of the rule that papers must be deliverable in person during normal business hours.

The Certificate of Formation (Form 205) is the document that actually creates your LLC in Texas's records: the equivalent of what other states call articles of organization. You file it with the Secretary of State, and the fee is $300 whichever way you send it. Online filing now runs through SOSPortal, which replaced SOSDirect and SOSUpload on September 29, 2026. You'll need a fresh SOSPortal account (old SOSDirect client accounts didn't move over), then you choose Business Filings, fill in the form, preview it and pay. ACH and cards are both accepted, and a card adds a convenience fee of $0.25 plus 2.25% of the total, so $307.00 on the $300 filing. By mail, send the form with a check or money order to P.O. Box 13697, Austin, TX 78711-3697. The full list of fees is on Form 806.

There's no published standard turnaround for a Certificate of Formation. If you need to jump the queue, the Texas Express program charges per document, on top of the $300: $50 for standard expedited handling (usually 2 to 3 business days), $500 for next day, or $750 for same day if the state has it by 12:00 p.m.

What the certificate asks for

• Company name with the required LLC designator
• Registered agent's name and Texas registered-office street address: a real street address, not just a mailbox service
• Management structure: member-managed or manager-managed
• Governing persons: the name and address of each initial manager or managing member
• Initial mailing address: where the state should send franchise tax correspondence
• Organizer: the person signing and filing
• Effective date (optional). You can delay formation by up to 90 days

No notary is needed. Be aware that the governing persons' names and addresses become public once the certificate is filed.

What you don't have to disclose

You don't list ownership percentages, capital contributions, or a custom description of the business (the purpose clause is pre-printed). The Certificate of Formation is a lean formation document, not a disclosure filing. All the internal detail lives in your operating agreement, which stays private.

An operating agreement is the LLC's internal rulebook: Texas law also refers to it as a "company agreement." You don't file it anywhere and it never becomes public, but you want it in place before you take on partners, raise money, or open accounts.

What a solid operating agreement covers

• Ownership: who the members are and each one's percentage interest
• Capital contributions: what each member put in and what future contributions may be required
• Profit and loss allocation: how gains and losses are split among members
• Distributions: when and how cash actually gets paid out, and in what order
• Management: who runs the company day to day and which decisions need a member vote
• Voting: whether votes track ownership percentage, are one-per-member, or something else
• Transfers: what happens when a member wants to sell or leave, including rights of first refusal
• Dissolution: how the company is wound down and assets divided

For a single-member LLC the agreement backs up the claim that the company is a real separate entity: the exact thing a court examines when someone tries to reach your personal assets. For a multi-member LLC it's non-negotiable: absent an agreement, the default rules of the Texas Business Organizations Code govern everything, and those defaults are rarely what the members actually wanted.

The IRS hands out an Employer Identification Number (a nine-digit federal tax ID) free of charge. Think of it as the business version of a Social Security number: you use it on tax filings, to open bank accounts, and to hire.

When you need one

• Your LLC has more than one member (multi-member LLCs file a partnership return and need an EIN)
• You plan to hire employees
• You want a business bank account (nearly every bank requires it)
• You've elected S-corp or C-corp tax treatment

A single-member LLC with no employees can technically use the owner's SSN, but most advisors get an EIN anyway to keep the Social Security number off business paperwork and simplify banking.

How to apply

Apply free at IRS.gov using the online EIN Assistant. It takes about ten minutes and issues the number on the spot: print the confirmation and use it the same day. The online tool needs a US SSN or ITIN. Applicants without one file Form SS-4 by fax or mail instead.

Keeping business and personal money separate isn't optional if you want the liability shield to hold. Pay personal bills from the company account, or funnel business income into your personal checking, and you hand a creditor the argument that the LLC is a sham, which can expose you personally.

What banks usually ask for

• The filed Certificate of Formation from the Secretary of State
• Your IRS EIN confirmation
• The operating agreement (many banks want to see it, so have it ready either way)
• Government-issued ID for every authorized signer

Community banks and credit unions are often more flexible with brand-new LLCs than the big national chains, and several online business banks can open an account without a branch visit. Compare monthly fees, transaction caps, and minimum balances before you commit.

Most of the compliance work is front-loaded into formation. After that it's mainly one yearly obligation plus staying on top of any change to your agent or address.

Franchise tax and Public Information Report

Texas doesn't collect an SOS annual report for LLCs. Instead, by May 15 each year you file with the Comptroller: the franchise tax report and the Public Information Report (Form 05-102). Most small LLCs fall under the no-tax-due threshold ($2.65 million for the 2026 and 2027 reports) and owe no tax, but the free Public Information Report is still mandatory, and your first one comes due May 15 of the year after you form. Miss it and the Comptroller can forfeit the company's right to transact business, which drags down your SOS standing too. See the franchise tax page for the current forms.

Registered agent upkeep

If your agent moves, resigns, or you switch agents, file Form 401 with the SOS promptly; the fee is $15. The Public Information Report doesn't update the agent of record, so this step can't be folded into your May filing. A stale registered-office address leaves the LLC non-compliant even when the franchise filing is current.

Taxes and permits

Federal filings depend on how the LLC is taxed: Schedule C for single-member, Form 1065 for multi-member, Form 1120-S for an S-corp election. Texas has no personal income tax. If you sell taxable goods or services, register for a sales-and-use tax permit with the Comptroller. Trade and professional licenses and any local city or county permits run on their own schedules, separate from the SOS.