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Cheapest Way To Start An LLC In Texas: 2024 Guideline

Max Smith

Reading Time: 8 minutes

Are you tense about the high cost of getting an LLC in Texas? Well, I got you the cheapest way to start an LLC in Texas.

Having an LLC for your business is certainly a futuristic idea. However, getting an LLC might appear quite expensive because of the filing costs.

This article will guide you with some of the easiest ways to start your LLC in Texas cheaply. So, read on to find out the details.

The cheapest way to start an LLC in Texas is by filing online. Texas has a pretty convincing online platform for that.

If you do the filing on your own, it can save you a lot of money from hiring an agent. A registered agent around Texas usually demands half of the entire processing cost. 

You can check on the operating agreement thoroughly to avoid any mistakes while doing the filings.

But what are the different costs associated with forming an LLC in Texas? Find out in the next section.

How Much Does It Cost To Form An LLC in Texas?

The LLC forming cost in Texas will vary depending on a few factors. The average cost will be between $300 to $1000.

Additional costs depend on other factors (licenses, agents, operating agreements).

If you are a beginner, the things I am going to share here might help you.

Let me break down the process one by one:

Certificate Formation Costing

While opening an LLC, you would need a certificate of formation. This certificate will give your business permission to conduct business legally. In Texas, the fee of filing for this certificate may cost you around $300. This is applicable both online and offline.

Reserving The Name Of Your LLC

Before certification, you would need to confirm the viability of your LLC name. Texas will give you the option to book your name 120 days before filing the form. This might cost something around $40.

Registered Agent

Well, although this is an optional step, most people prefer hiring a registered agent. It makes sense as none of the business owners are experts in handling business entities. And, no one wants to take any risk when it comes to ensuring your business’s legality.

You might have to pay between $35 to $300 per year depending upon the expertise of the agent and the services they provide.

Note: According to the LLC operating agreement template of Texas, all LLCs must have a registered agent. However, if the business owner is a US resident, he can confirm himself as a registered agent legally for the LLC.

Business Bank Account

While opening an LLC in Texas, you might have to open a business bank account there. Banks generally allow people to open accounts for free.

Still, there are some hidden fees or monthly costs. The exact amount will depend upon the bank you are choosing.

Federal Tax ID

You must collect your federal tax ID to start an LLC in Texas. This is to help your business while dealing with tax purposes. You have to apply for this specific ID to the IRS. Generally, IRs require no charge. Still, there are some online formation service packages.

Business Licenses

For this, you have to visit the Texas business license and permit guide. The cost for this license will vary depending upon the locality where you are forming the business and LLC.

The good news is, that Texas does not require any monthly or yearly fees to form an LLC there. This is one of the many reasons people choose to form an LLC in Texas.

You can check out the costs in more detail about forming an LLC.

Requirements For Opening LLC In Texas

Opening an LLC in Texas is effortless. You just need to provide some basic details. These are:

  • Your formal name
  • Your US address
  • Phone number
  • The name of your new LLC

But what are the low cost methods you can utilize in order to start an LLC in texas? Read on to find out. 

How to Start an LLC in Texas In Low Cost?

Texas is a cost-friendly state to start an LLC. However, certain tricks might help you out throughout the entire process.

Follow here and follow the directions step by step:

Choose A Name For Your LLC

Make sure the name you choose is available and compliant with Texas naming regulations. You can search for available names on the Texas Secretary of State website.

Get An Official Business Address In Texas

Forming an LLC in Texas requires you to submit a designated street address. This can be anything in your home or office that will claim the business. If you are forming an LLC in Texas without a physical location, you might have to use a virtual mailbox or P.O. box.

Registered Agent Is Necessary

As I have mentioned earlier, an official correspondent is necessary for forming an LLC in Texas. The individual is usually known as a registered agent who will be contacting the Texas secretary’s office. There the agent will do every paper to file the reports.

File The Articles of Organization

You have to file Articles of Organization with the Texas Secretary of State. This can be done both online and offline. The certification filing is necessary in Texas once. However, you might have to do the yearly filings depending on the business type and requirement.

Get an EIN (Employer Identification Number)

You need to collect an Employer Identification Number (EIN) from the IRS. This is free of charge and can be done online. However, this is the time when your business bank account is needed.

With these easy steps, you have successfully opened an LLC in Texas. For more details, you can check out our guide on How to Start an LLC

What is The Best LLC Service In Texas?

I understand you want to do the entire thing on a budget. But, forming an LLC by yourself is hectic and lengthy work.

If you can increase your budget and prefer safety, there are some incredible LLC services you can grab in Texas.

Some best LLC services in Texas are below- 

Top Pick
ZenBusiness Logo
4.8/5

4.8

/5

Budget Friendly
bizee logo
4.7/5

4.7

/5

Best Legal Support
inc authority logo
4.8/5

4.8

/5

These companies will require a certain amount of fees to do the documentation. 

However, the best service for you will depend on your specific needs and preferences. It’s recommended that you research each provider and compare their services, pricing, and customer reviews to determine the best fit for your business.

How To Start An LLC In Texas For Free?

You can establish an LLC in Texas for free by accepting offers from LLC providers. Also, it can be possible if you are doing each step of the process by yourself.

With the offers, you will be saving registered agent’s costs and receive guidance for free.

You have to pay the filing costs anyway. 

How Long Does It Take To Form An LLC in Texas?

If you are doing the paperwork of filing through a registered agent, it will be quicker. As they know the right process, they will try to submit quickly. 

Generally, forming an LLC in Texas takes 4 to 5 working days. The time spent will vary depending on the way you are submitting the paperwork. Generally, fax submissions are reviewed faster than emails.

However, if you are in a hurry there is another option of an expedition. 

The expedited filing time requires 1 or 2 working days only. It is recommended to complete and submit all necessary paperwork promptly to expedite the process.

What Do You Need to Do After You Start an LLC in Texas?

Here are certain things you need to do after forming an LLC in Texas:

  • You need to check that the permits and licenses are enough to operate your business. Your LLC might require legal papers of health permits, building permits, and specific federal and state permits. These documents can be checked in your local municipality of Texas.
  • Consult with an insurance agent to confirm the policies. You must follow general liability insurance. Also, if you have hired employees in your business, compensation insurance is another thing you would need.
  • Do not forget to keep your business account separate. It is to save your assets from liabilities in case of loss.
  • Continuously monitor and update your business plan to ensure your LLC is on track for success.
  • Keep accurate financial records and maintain compliance with all state and federal regulations.
  • You must keep up the follow-up and file an annual report of the business at the Texas Comptroller’s office.

Do I Need A Lawyer To Form An LLC In Texas?

No, you do not need a lawyer to form an LLC in Texas.

You can complete the necessary paperwork and file it with the Texas Secretary of State yourself.

However, it is recommended to consult with a lawyer or other legal professional. It is to ensure that the formation of your LLC is done correctly. Professional help can help you understand all of the legal implications better.

What Are The Pros and Cons of Forming an LLC in Texas?

In the end, it is necessary to learn both the pros and cons of LLCs in Texas. Understanding the pros and cons will bring you to some conclusions. 

Learn more here:

Pros of Getting an LLC in Texas

  • LLC in Texas is quite flexible. In the case of transforming ownership, Texas has a minimum paperwork procedure. Forming an LLC in Texas is relatively simple. So, for anyone that’s looking for flexibility and simplicity, Texas is one of the best states to form an LLC
  • LLCs in Texas are typically taxed as pass-through entities. It means that the profits and losses are passed through to the owners and reported on their tax returns. This can result in potential tax savings compared to a corporation.
  • LLC in Texas allows both single-member and multiple-member ownership.

Cons of Getting an LLC in Texas

  • In Texas, an LLC has a limited life span and will dissolve upon the death, withdrawal, or bankruptcy of a member. It is considerable in the case of the specified Texas LLC operating agreement form. 
  • Papers regarding forming an LLC might be expensive. Forming an LLC in Texas requires legal deeds, state fees, annual fees, and others.
  • In Texas, your business income will be generated as self-employment taxes.

Conclusion

You can start your LLC in Texas for the lowest possible cost. Here I have mentioned the simple process along with some tips. It is important to consult with a legal or financial professional to ensure that you are in full compliance with all state and federal regulations. After all, you do not want to risk your business.

Key Points

  • Online filing in Texas is more convenient and takes up less time.
  • Texas LLC is suitable for your online business.
  • The main cost of forming an LLC is hiring a professional.
  • Starting an LLC in Texas has both advantages and disadvantages.
  • Forming an LLC in Texas makes your business liable to pay sales taxes.

Frequently Asked Questions

Is LLC worth it in Texas?

LLCs in Texas are certainly worthy in terms of the safety and protection of your business. If you are a small business owner and aim to lower the tax burden, seek personal asset protection, and access business capital, LLC will be worth a shot.

Do LLCs pay taxes in Texas?

In Texas, there are two types of taxes for your business. These include Texas franchise tax and sales tax. Sales taxes are about all businesses. And, franchise taxes are considered for special cases.

How long does a Texas LLC last?

An LLC in Texas does not have a specific duration or expiration date. In case there is no expiration date, LLC lasts for a lifetime. In case of a special agreement, there will be specific dates.

Max Smith - LLC Formation

He is a seasoned entrepreneur and legal expert at LLC Formation Hub. With a stellar track record in both business and law, Max simplifies the complexities of LLCs. His practical insights, featured on LLC Formation Hub, empower entrepreneurs across the USA. Max merges business finesse with legal acuity to guide businesses toward success.


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