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LLC in Texas: Costs & Fees You Need to Know

A Texas LLC registration will include mandatory and optional costs.

Starting a new business in Texas means you’ll need to make an initial investment before making your first sale or hiring your first employee.

And if you’re changing your sole proprietorship status to a limited liability company (LLC), prepare to pay some extra fees.

So how much does it cost to form an LLC and keep it in good standing in the Lone Star State?

We’ve got you covered with this guide on the most common costs and fees you’ll encounter when forming your Texas LLC.

We’ll cover everything from application fees to taxes, so you’ll be able to budget this year and years to come.

Table of contents

  1. Texas LLC formation cost: $300
  2. Extra Texas LLC costs to account for
  3. Does Texas have an annual LLC fee?
  4. Conclusion: How much does an LLC cost in Texas?

Texas LLC formation cost: $300

The Texas Secretary of State charges the following fees to form LLCs in Texas.

  • $300 for Certificate of Formation (Form 205) for a domestic LLC.
  • $750 for registration of a foreign LLC (Form 304).
A domestic LLC has its principal place of business in Texas. A foreign LLC is a business entity headquartered in another state but wants to do business in Texas.

In Texas, you can file the Certificate of Formation in-person, mail, fax, or using an online portal. For online filings, however, be ready to pay an extra $5.00 per document.

If you’ve selected another option, the state provides expedited services for $25 per document. It may be handy given that the Secretary of State in Austin can take one to five weeks to review your application.

The Certificate of Formation is the main document required to form an LLC in Texas. But there are several more steps (and fees) involved to start doing business in Texas.

You’ll also need to appoint a registered agent, create an LLC operating agreement, and register to pay state taxes.

Check out our complete guide for detailed steps on how to form an LLC in Texas.

Note: Be sure to form or register your LLC with Texas before you begin doing business. Under Texas law, there are hefty late filing fees for companies that do business in Texas without registering.

Extra Texas LLC costs to account for

Articles of Organization (Certificate of Formation) legally establishes your business entity in the state. But beyond, LLC owners should set aside a budget for other maintenance costs.

Registered agent fees

You’ll need a registered agent to receive the service of process documents on behalf of your company.

When it comes to a registered agent, business owners have a few options. You, or someone at your company, can be a registered agent for your company.

Registered agent fees

Or you can hire a professional registered agent service. This option is recommended for companies without a physical address in the state.

Being your own registered agent doesn’t cost you anything. But contracting a professional service costs $80-$120 per year on average.

There are no extra state fees involved for adding a registered agent to your Texas LLC. The $300 LLC registration fee already covers that.

But if you wish to change your registered agent, you’ll have to file a separate form with the state and pay a $15 fee.

Trade name registration

Registering an assumed name in Texas costs $25.

If you want to use a trade name or an assumed name (e.g., DBA “doing business as”), instead of your LLC’s legal business name, you’ll need to let the Secretary of State and the County Clerk know by filing Form 503 and paying the state filing fee.

This filing will signify to the authorities that you’re also doing business under a different name.

Using a trade name might make sense if your LLC’s legal name is too formal or not descriptive enough for customers.

For example, if your LLC’s legal name is “John Smith Enterprises LLC” and you’re a plumber, you might want to use the trade name “John’s Complete Plumbing.”

LLC name reservation fee

The cost to reserve an LLC name in Texas is $40.

Reserving a name holds it for your use for up to 120 days. If you need it held longer, you can do another filing and pay a fee to claim 120 more days.

Putting down a name reservation makes sense if you’re still getting your LLC paperwork together or plan to travel in person from another state at a later date.

Certified document copies

If you need or want to get certified copies of your Texas business formation documents, you’ll need to order them online or in person.

The standard certified copy rate is $1 per page plus $15 per certificate. However, some legal documents may cost more. For example, the Long Form Certificate of Existence costs $25.

Plain (uncertified) copies are just 10 cents per page.

Texas Certified Document
Texas Certified Document Copy Fees. Source: Texas Secretary of State.

Business permits and licenses

Some types of businesses in Texas require specific permits or licenses to operate. Some examples of regulated business structures include:

  • Accounting services
  • Legal services
  • Water well drillers
  • Wineries

The costs for business permits vary depending on the type of permit you need and the size of your operations.

To determine if your business needs one, you can check out the 2020 Texas Business Licenses & Permits Guide.

If you’re required to collect and remit sales tax in Texas, you’ll have to apply for a Sales Tax Permit with a local comptroller. The permit is free.

Note: You’ll also want to make sure you apply for an employer identification number (EIN) from the IRS. It’s like a Social Security Number for your business — a unique identification number for your company. You’ll need this EIN to file your federal taxes.

Does Texas have an annual LLC fee?

No. LLCs are excluded from filing an annual report with the Secretary of State if there were no changes in structure. Instead, LLCs need to file an annual public information report to the Texas Comptroller of Public Accounts.

Texas doesn’t charge an income tax. But Texas LLCs have to file annual franchise tax reports and pay franchise taxes to the state.

Many LLCs don’t end up paying any franchise tax because they fall below the annual taxing threshold. Currently, the first $1,180,000 of revenue is tax-free. For companies earning more than this, the tax rates range from 0.331% to 0.75%.

Annual Franchise No Tax Due Report
Annual Franchise No Tax Due Report. Source: Texas Comptroller of Public Accounts. Source: Texas Comptroller of Public Accounts.

Conclusion: How much does an LLC cost in Texas?

The baseline costs to form an LLC in Texas is $300 for domestic businesses.

However, the actual company formation bill in Texas often goes higher due to other miscellaneous costs such as certified document copies, trade name registrations, etc.

Below are two sample costs scenarios for the first and second years of operation:

Annual costs for Texas LLC (1st year)

Description

Cost

Articles of Formation

$300 or $750

Registered agent service

$100 – $150

Certified copies of documents (if needed)

$15 – $30

Trade name registration (if needed)

$25

Name reservation (if needed)

$40

Expedited processing (if desired)

$25

Specific permits or licenses (if needed)

$20+

Annual costs for Texas LLC (2nd year & after)

Description

Cost

Change registered agent (if needed)

$15

Registered agent service

$100 – $150

Franchise tax report preparation (by an accountant)

$150+

Franchise tax

0.331% – 0.75% of revenue over $1.18 million

Specific permits or licenses (if needed)

$20+

Melissa Pedigo

Article by:

Melissa Pedigo

Certified Public Accountant (CPA)

Melissa Pedigo is a US CPA with more than 20 years of experience. She’s worked at Big 4 firms, for the government, and internationally. Now a full-time writer, she enjoys translating complex financial and tax topics into plain English. When she’s not keeping current reading IRS rules or tax legislation, you’ll find her studying foreign languages or playing tennis.

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