How Much Does an LLC Cost in Texas? (Filing Fees 2024)

The initial cost to form an mited Liability Company (LLC) in Texas is typically $300 for filing the Certificate of Formation, and guess what? There’s no annual report fee for LLCs in Texas.

But what else should you keep in mind?

While that filing fee is a one-time expense, you might also have some additional/optional costs to consider, like registered agent services, operating agreement, LLC name reservations, doing business as (DBA) names, and various licenses or taxes that can add up.

This guide will explain the fees and potential expenses associated with forming an LLC in Texas so you can launch your business confidently.

How Much Does an LLC Cost in Texas?

To form a Limited Liability Company (LLC) in Texas, you must file a Certificate of Formation. The typical cost for this filing is $300 if done by mail. If you choose to file online, the fee is $308. This fee is a one-time payment.

Aside from the filing fee, there may be additional costs. This can include:

• LLC Name Reservation: Reserving an LLC name typically costs $40. This step is optional in most states, but it can be useful to secure your desired name before officially filing.
• DBA (Doing Business As) Costs: If your LLC plans to operate under a different name than its legal name, you’ll need to file a DBA. This usually costs $25.
• Registered Agent Fees: Hiring a registered agent can cost around $100 to $300 annually. The registered agent receives official documents and legal notices on behalf of your LLC, which is a required role.

Forming an LLC protects your assets from business debts, a key benefit over a sole proprietorship or partnership.

Also, LLCs offer flexibility in how profits are distributed and taxed. They can be taxed as pass-through entities, meaning profits pass directly to owners, or they can opt for corporate taxation.

LLC Costs in Texas (Formation Fees)

Here’s a breakdown of the Texas LLC requirements and their associated fees:

Texas LLC Requirements	Cost
LLC Business Name Cost	$0
Texas Certificate of Formation	$300
Texas Annual Report	$0
Operating Agreement (optional)	$0 (with Northwest)
EIN Number	$0 (free from IRS)
LLC Name Reservation Fee (optional)	$40
Certificate of Status (optional)	$15
Foreign LLC Registration (optional)	$750
Franchise Tax Reports	$0
LLC Public Information Report	$0
Fictitious Name (DBA) (optional)	$25
Taxes	Varies
State Business License Fee	$0
Registered Agent Services	$0-$125 (Northwest)
LLC Formation Services	$39
Total LLC Costs in Texas	$300 – $1294

Total LLC costs in Texas range from $300 to $1,294. If you do everything yourself and skip the optional extras, you might only spend around $300. However, if you decide to pay for additional services and requirements, your costs could go up to between $900 and $1,294.

The first mandatory expense is the $300 fee for filing the Texas Certificate of Formation, which is essential for officially forming your LLC. You won’t have to worry about annual report fees, as Texas doesn’t require them for LLCs.

Now, let’s talk about the optional costs.

Obtaining an Employer Identification Number (EIN) is free from the IRS. While having an Operating Agreement is recommended, you can obtain it at no cost if you use services like Northwest.

If you want to reserve your LLC name, that will cost you $40. You can also obtain a Certificate of Status for $15, and if you plan to register a foreign LLC in Texas, that incurs a fee of $750. If you wish to operate under a different name (DBA), you must pay an additional $25.

Regarding registered agent services, you can either act as your agent at no cost or hire a professional service, which typically ranges from $100 to $300, depending on the provider.

If you choose to use an LLC formation service, that typically costs around $39. Additionally, remember that taxes can vary based on your specific business activities, and the state business license fee can differ depending on your industry.

Now that you know the costs involved in forming a new LLC in Texas, if you’re eager to learn more about the specific requirements and processes, keep reading as I break them down below!

Texas LLC Business Name Cost ($0)

You can choose your business name without any direct cost when forming an LLC in Texas. There is no fee to reserve or register your business name during formation.

However, you should ensure your chosen name is unique and not already in use. You can visit the Texas Secretary of State’s website to check for existing names. This is an important step because your name needs to stand out and represent your business well.

Sometimes, you might consider trademarking your business name for additional protection. Although this involves fees, it helps safeguard your brand from being used by others. But simply starting with your LLC name in Texas is free.

Texas Certificate of Formation ($300)

You must file a Certificate of Formation to form an LLC in Texas. This document is essential for legally establishing your business structure.

You have two filing options: by mail or online. The cost for filing by mail is $300, while the online filing fee is $308. Although online filing comes with a slightly higher fee, it is generally simpler and quicker.

The filing fee is a one-time payment. After this, no ongoing monthly or annual fees are required to keep your LLC active in Texas. This makes budgeting for your business more straightforward.

The Texas LLC processing time can vary. If you file your Texas LLC online, expect approval in 10-15 business days. However, if you choose to file by mail, it can take 2-4 months.

When filing your Certificate of Formation, ensure you have all the required information ready. This includes details about your business name, registered agent, and other basic information.

LLC Operating Agreement Cost in Texas ($0 with Northwest)

Creating an LLC in Texas often involves drafting an operating agreement. This document outlines the management structure and rules for your LLC.

Northwest Registered Agent can provide your operating agreement for $0. This is a great way to ensure your LLC is set up correctly without additional costs.

Texas law does not always require an operating agreement, but it is highly recommended. It helps clarify how your LLC will be run and can prevent future disputes.

When working with Northwest, you receive a straightforward template. This allows you to customize the details to fit your business needs easily.

Here’s what you gain with Northwest’s offering:

• No cost: You won’t pay anything for the agreement.
• Easy to customize: Use their template to create a plan that works for you.
• Expert support: They guide you throughout the process.

This free service lets you focus on growing your business without worrying about operating agreement expenses.

Texas Registered Agent Fee ($0-$300/year)

When setting up an LLC in Texas, you need a registered agent. This person or company receives legal documents on behalf of your business. The fees for a registered agent can vary widely.

If you choose to act as your Texas registered agent, there is no fee. You simply need to provide your name and address. This option gives you complete control and saves you money.

If you prefer to hire a Texas registered agent service, costs range from $100 to $300 per year. These services can protect your privacy and help manage your paperwork. For example, LegalZoom charges around $249 annually, while ZenBusiness offers services for $199 annually.

One attractive option is Northwest Registered Agent. If you use them to form your LLC, they provide free services during the first year. After that, their fee is $125 per year, making it a competitive choice.

EIN Cost in Texas ($0 from the IRS website)

When starting an LLC in Texas, you need an Employer Identification Number (EIN). The good news is that obtaining your EIN is free through the IRS.

You can complete the process online on the IRS website to apply for an EIN. This is usually the fastest way to receive your number. However, you may also contact the IRS by phone if you prefer.

Here are a few key points about obtaining an EIN:

• Cost: $0
• Application Methods: Online or by phone
• Eligibility: You must be authorized to apply for the EIN on behalf of your LLC.

Your EIN is essential for various business functions. You will need it to open a bank account, file taxes, and hire employees.

Texas Franchise Tax Reports Fee ($0)

In Texas, most LLCs do not have to pay a franchise tax. Over 90% of them fall into this category. You must still file some reports while you won’t owe any tax.

You will likely file a No Tax Due Report if your total revenue is below the required threshold. This reporting requirement ensures that your LLC is compliant with state regulations. Importantly, there is no fee for filing this report.

In addition to the No Tax Due Report, you must also submit a Public Information Report (PIR). Like the No Tax Due Report, filing the PIR costs nothing.

You must pay a franchise tax if your business exceeds the revenue threshold. The rates vary depending on your type of business. For example, retailers and wholesalers are taxed at 0.375% of the taxable margin.

Other businesses face a rate of 0.75% unless they qualify for the EZ computation method, which is set at 0.331% of total revenue.

Understanding these fees and requirements helps you stay compliant, plan your business costs effectively, track your revenue, and file the necessary reports on time.

Texas LLC Public Information Report ($0)

Every LLC in Texas must file a Public Information Report (PIR) with the state. This report provides important details about your business.

The filing fee for the Public Information Report is $0. This can be a helpful saving for your LLC because it does not add any financial burden.

What information do you need to include in the report? Typically, you’ll provide details such as:

• The name of your LLC
• Address of the principal office
• Names of members or managers

Filing the PIR is mandatory and must be submitted annually. It helps maintain current records with the state. Make sure to file it on time to avoid any penalties.

You can complete the Public Information Report online or by mail. It’s straightforward and can be done during your annual renewal process. Be sure to keep your information updated to reflect any changes in ownership or management.

By staying compliant with the PIR, you help your LLC operate smoothly and retain good standing with the state of Texas.

Fictitious Name/DBA Cost in Texas ($25)

If you decide to operate your LLC under a name different from its legal name, you will need a “Doing Business As” (DBA) or fictitious name. In Texas, filing a DBA costs $25.

To obtain your assumed name certificate, you must file it with the Secretary of State. This certificate allows you to use a business name that is not registered as your LLC.

It’s important to ensure your chosen name isn’t already used. To avoid conflicts, you can check for name availability with the Secretary of State.

LLC Name Reservation Fee in Texas ($40)

In Texas, reserving a name for your LLC costs $40. This fee allows you to hold a name for up to 120 days before filing your LLC formation documents.

To reserve a name, complete Form 501 and submit it to the Texas Secretary of State. This form is simple, making the process easy for you.

If you decide to extend the reservation, you can renew it by resubmitting Form 501 within 30 days of the original reservation’s expiration. Remember, you cannot file this notice online; it must be sent by mail or in person.

The name reservation is beneficial as it ensures that no other business can claim your desired LLC name during the reservation period. This step is crucial if you are still finalizing your business plans or awaiting funding.

Texas Certificate of Status ($15)

In Texas, you can obtain a Certificate of Status for a fee of $15. This certificate proves that your LLC is in good standing with the state. It confirms that your business is legally registered and current on all required filings.

You might need this certificate for various reasons. For example, a Certificate of Status can be important if you want to open a bank account for your LLC or apply for a loan. It shows that you have met your state obligations.

Getting your Certificate of Status is straightforward. You can request this document online or through the mail. It is usually a quick way to verify your business’s standing.

Texas Foreign LLC Registration Fee ($750)

You must register with the state to operate a foreign LLC in Texas. The registration fee is $750, which is required to process your application.

When you complete the Application for Registration of a Foreign LLC, be ready to pay this fee. You can make payments through various methods, including check, money order, or a debit or credit card.

Next, appoint a registered agent in Texas to handle legal documents for your foreign LLC.

It’s vital to register your LLC properly before conducting business in Texas. Failing to register may lead to fines and legal issues. Ensure all your documents are completed accurately to avoid delays in the registration process.

Texas LLC State Business License ($0)

You won’t need to worry about a general state business license in Texas. There is no state-wide license requirement, meaning no fee is associated.

You will need a Sales Tax Permit if your business involves selling tangible personal property or taxable services. This applies if you sell goods in Texas or even remotely outside of Texas.

This permit is also required for leasing or renting tangible personal property. Thankfully, the Texas Sales Tax Permit is free.

When starting your LLC in Texas, you can save money by avoiding a state business license fee. Focus on meeting any specific local or industry requirements that may apply to your business.

Texas LLC Taxes (varies)

When you run an LLC in Texas, several taxes must be considered. Here are some key types:

• Federal Income Tax: You must file taxes based on your LLC’s earnings with the federal government.
• Texas Franchise Tax: This tax generally applies to businesses earning over $2.47 million.
• Sales Tax: You’ll need a sales tax permit if you sell goods or services. The base sales tax rate is 6.25%, but local areas can increase this to 8.25%.

If your LLC has employees, you are responsible for payroll taxes, which include Social Security, Medicare, and federal unemployment taxes.

The exact tax amounts will depend on your business’s revenue and activities. It is advised to consult a qualified accountant who can help navigate these complexities.

Most small business owners in Texas pay around $400 to $900 yearly for accounting services. This expense can help you understand your specific tax obligations in clearer terms.

Texas LLC reinstatement fee ($75)

If your LLC in Texas has been forfeited or dissolved, you can reinstate it by paying a fee of $75. This fee is required for reinstatement after involuntary forfeiture or termination of a business.

To proceed, you must submit a request form along with the payment. The necessary forms are on the Texas Secretary of State’s website. Make sure you fill out the forms completely to avoid delays.

Resolving any outstanding franchise taxes is essential in addition to the reinstatement fee. To reinstate your LLC, obtain a tax clearance letter from the Texas Comptroller. This letter confirms that your taxes are up to date.

Keep in mind that the reinstatement process may take some time. Once you’ve submitted your forms and fee, monitor your status to ensure everything is processed correctly. You want to ensure your LLC is back in good standing soon.

Texas LLC dissolution fee ($40)

When you decide to dissolve your LLC in Texas, you must pay a $40 fee. Filing the Certificate of Termination with the Secretary of State requires this fee.

You can submit your filing online, which can save you time. If you choose to file by mail, you must send the completed form along with your payment.

You have a couple of options for making the payment. If you file online, you can use a credit card. Be aware that credit card payments include an additional convenience fee of 2.7% of the total amount.

Here’s a simple overview of the process:

• Complete the Certificate of Termination.
• Pay the $40 filing fee.
• Submit the form online or by mail.

These steps ensure your LLC is officially dissolved, preventing any further obligations or fees.

Texas LLC Change of Registered Agent fee ($15)

Changing your LLC’s registered agent in Texas costs $15. This fee applies when you file the necessary paperwork with the state.

To make this change, you will use Form 401. This straightforward form requires you to indicate your entity type and fill out the required sections.

Registered agents are important for receiving legal documents on behalf of your LLC. You can designate either an individual or a business entity. Keep in mind that your LLC cannot serve as its own registered agent.

To change your agent, you can complete the process online through the Texas Secretary of State’s SOSDirect system. If you don’t have an account, you must create one first.

Your change will be processed after you submit the form and payment. To ensure everything is in order, keep a copy of the form for your records. This small investment helps maintain your LLC’s compliance and good standing in Texas.

What is the Cheapest Way to Start Texas LLC?

Starting an LLC in Texas can be done in several ways. One of the simplest methods is to file the Certificate of Formation online. The filing fee is $300. If you prefer mailing it, your fee will still be $300, but with slightly longer wait times.

Another option is to use a service to help with the formation process. While this may seem convenient, it typically adds additional costs. The cheapest way is to handle the process yourself.

If you want to save even more, consider filing your documents directly without a third party. This means no extra fees. You just pay the state fee.

While online filing is the most affordable method, it has downsides. You’ll need to understand the filing forms and requirements on your own. Any mistakes can delay your application or result in extra fees.

Using a service can make things easier, but they’ll charge a premium for their help. This could double or triple your startup costs. Check for hidden fees before you decide.

Should You Use an LLC Formation Service in Texas? (here’s why)

Using an LLC formation service in Texas can simplify the process for you. With services like Northwest Registered Agent, you get support from experts who understand the legal requirements.

• Privacy benefits: An LLC formation service helps keep your personal information private when registering your business, protecting your identity.
• Peace of mind: These services handle paperwork and ensure compliance with state regulations, allowing you to focus on your business.
• Hassle-free process: If you’re unfamiliar with it, LLC formation services take care of the details, so you don’t have to deal with paperwork headaches.
• Expert access: You gain free access to LLC formation experts and attorneys for guidance, helping you avoid mistakes and get reliable advice.

However, there can be costs involved. These services charge fees, which can vary. You must weigh the costs against the benefits to decide what works best for you. Consider what you value more: saving money or gaining convenience and support.

Frequently Asked Questions

How much does it cost to dissolve an LLC in Texas?

Filing the Certificate of Termination with the Secretary of State requires a $40 fee. Seeking legal advice can help ensure compliance.

How much does it cost to reinstate an LLC in Texas?

Reinstating an LLC in Texas usually requires filing a Certificate of Reinstatement and any back fees owed, which can vary. There may be a minimum fee of $75, but other costs depend on the specific circumstances of your LLC.

Do I need a business license if I have an LLC in Texas?

While an LLC does not require a specific business license in Texas, you may need various permits or licenses based on your business type and location. Check with your local city or county authorities for specific requirements.

Do I need to hire an attorney to form an LLC in Texas?

Hiring an attorney is not required to form an LLC in Texas. Many people complete the process themselves. However, consulting an attorney can be beneficial if you have complex questions or need tailored guidance.

Should I hire an LLC formation service in Texas?

Using an LLC formation service can save time and help you avoid errors in the filing process. It is especially useful if you are unfamiliar with the requirements. Consider your comfort level with the process when making this choice.

Are there penalties for paying my fees late in Texas?

Yes, you may incur penalties and interest charges if you do not pay your fees on time. In some cases, failure to pay can lead to the administrative dissolution of your LLC.

What happens if I do not file my Texas LLC annual report?

Failing to file your annual report in Texas can lead to penalties and the potential administrative closure of your LLC. Staying compliant is essential to maintaining your business’s active status.