FAQ · Straight answers to the questions Texas LLP owners ask most.
Texas LLP Frequently Asked Questions
Straight answers to the questions people actually ask when forming and running a Texas limited liability partnership — how registration works, what protection you get, how taxes and the Comptroller obligations fit together, and what to do when things change. If you don't see your question here, our team can point you in the right direction.
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State facts
Texas LLP
Formation and Registration
How do I form a limited liability partnership in Texas?
You register your partnership with the Texas Secretary of State by filing an Application for Registration of a Limited Liability Partnership. The application names the partnership, states that it's registering as an LLP, names a Texas registered agent and registered office, gives the number of partners, and describes the business. You can file online through SOSDirect, upload it, or file by mail. Once it's effective, your partnership carries the LLP liability shield.
Do I need an existing partnership first?
Not necessarily. If you and your partners are already operating as co-owners, you already have a general partnership by default, and the LLP registration adds the shield to it. If you're just starting out, you form the partnership and register as an LLP together. Either way, an LLP needs two or more partners.
Is there a "certificate of formation" like an LLC has?
No. Because a partnership already exists when two or more people carry on business together, there's no separate formation certificate. The Application for Registration is what switches on your LLP status. This is a key structural difference from an LLC, which files a certificate of formation to bring the entity into existence.
How long does registration take?
Standard processing runs on the Secretary of State's usual turnaround, with expedited handling available for an additional fee. Your partnership doesn't have the LLP liability shield until the registration is effective, so file before taking on major obligations if protection is your goal.
Liability and Ownership
What does the LLP shield actually protect?
The registration shields each partner from personal liability for the partnership's obligations and for the wrongful acts of the other partners. In a plain general partnership, one partner's mistake can reach everyone's personal assets. In an LLP, it can't — that's the entire reason to register.
What isn't covered?
Two things. First, a partner is always responsible for their own negligence or misconduct — the shield never covers what you personally do wrong. Second, any debt you personally guarantee stays your personal obligation regardless of the LLP. The shield also depends on running the firm as a genuine separate business with clean, separate finances.
Can a single person form a Texas LLP?
No. A partnership requires at least two partners, so an LLP needs two or more owners. A solo owner would typically use a single-member LLC or a sole proprietorship instead.
Who runs a Texas LLP?
The partners do, under the terms of their partnership agreement. There's no required board or officer structure. The partnership agreement decides which partners can bind the firm, how decisions are made, and what requires a full vote.
Taxes and the Comptroller
How is a Texas LLP taxed federally?
By default, an LLP is taxed as a partnership: it files an information return (Form 1065), issues Schedule K-1s to the partners, and the partners report their shares on their personal returns. The partnership itself generally doesn't pay federal income tax at the entity level — income passes through to the partners.
Does Texas have a state income tax?
Texas has no personal state income tax, so partners don't pay Texas income tax on their pass-through partnership income. This is one of the reasons Texas is attractive for business owners.
What is the franchise tax and does my LLP owe it?
Texas imposes a franchise tax, administered by the Texas Comptroller of Public Accounts, on most taxable entities including LLPs. Each year you file a franchise tax report and an associated information report, generally due May 15. Many small partnerships fall under the no-tax-due threshold and owe no franchise tax, but they still have to file the report to stay in good standing.
Is there a Secretary of State annual report?
No. Texas does not require a Secretary of State annual report for for-profit filing entities. The recurring obligation lives with the Comptroller through the franchise tax filing. Separately, you must keep your registered agent current with the Secretary of State — but that's not an annual report.
Ongoing Compliance and Changes
What do I have to do each year to stay compliant?
Two things, at two different agencies. File your franchise tax report and information report with the Comptroller by the May 15 deadline, and keep a valid registered agent and registered office on file with the Secretary of State at all times. If you sell taxable goods or services, also handle sales tax with the Comptroller.
How do I change my registered agent?
File a change of registered agent (a Statement of Change of Registered Office/Agent) with the Secretary of State, naming the new agent and registered office, with the new agent's consent. Do this promptly whenever your agent moves, resigns, or you switch to a service, so there's never a gap in coverage.
Do I have to file my partnership agreement with the state?
No. The partnership agreement is internal and stays private. You never file it. What's on the public record is the registration — name, registered agent, number of partners, nature of business.
How do I close down a Texas LLP?
You wind up the partnership's affairs — settling debts, distributing remaining assets to the partners — and terminate the registration with the Secretary of State, while wrapping up final tax obligations with the Comptroller. Handling the Comptroller side properly is important, since outstanding franchise tax matters can complicate a clean termination.
Frequently asked questions
Can I run my Texas LLP from another state?
Yes. There's no requirement that partners live in Texas. You can be based anywhere and run a Texas LLP, as long as the partnership maintains a registered agent with a physical Texas registered office. A commercial registered agent satisfies that Texas-presence requirement without any partner needing to be physically in the state.
What's the difference between a Texas LLP and a Texas LP?
An LLP is a general partnership that registered for a liability shield — all the partners generally participate in management and all get the shield. An LP (limited partnership) has at least one general partner who runs it and bears management liability, plus limited partners who invest but stay passive. The structures serve different purposes; an LLP fits firms where the owners all work in the business, like professional practices.
Can a Texas LLP be owned by other companies?
A partner in an LLP can be an individual or, in many cases, another business entity, depending on how the partnership is structured and any professional-licensing rules that apply. Professional partnerships often have restrictions on who can be a partner, tied to the underlying license. If you're building an ownership structure involving other entities, confirm the specifics with an attorney.
What happens if I miss the franchise tax filing?
Missing the franchise tax report and information report with the Comptroller can lead to penalties and, if left unresolved, loss of the right to transact business and eventual forfeiture of the entity. Many small LLPs owe no tax under the no-tax-due threshold, but the report still has to be filed on time. If you've fallen behind, address it with the Comptroller promptly to get back in good standing.
Do professionals have to use an LLP in Texas?
Not required, but common. LLPs are a popular structure for licensed professionals — accountants, attorneys, engineers, architects, and similar — because they let colleagues practice together as a partnership while shielding each partner from the malpractice of the others. Depending on the profession, there may be specific entity options and naming rules set by the licensing board, so check your board's requirements.
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Formation, your registered agent, and your annual report. One price, $199.00/yr, with the state fee passed through at cost.
Form Your Texas LLP ($199.00/yr All-In)