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How Much to Start an LLC in Texas (Updated)

Max Smith

Reading Time: 7 minutes

While exploring the rules and benefits of an LLC in Texas, you may wonder how much to start an LLC in Texas. Compared to other states, an LLC in Texas has different costs to start, and it is relatively affordable. 

You may pay a reasonable amount to file an LLC, but you must also pay additional expenses. However, there is a process you should follow in order to create an LLC.

But if you choose a cheaper way, you can save money and make an LLC legally. Do you want to know how? Read on an I unveil the details.

To start an LLC in Texas, you must go through several steps. Most of these steps require you to bear the cost of completing the LLC formation process. 

Starting an LLC will provide benefits like limited liability protection, pass-through taxation, and flexible management; so paying for these is worth the cost.

Task

Cost

Certificate of Formation for a Texas Entity

$300

Certificate of Formation for a Texas Foreign Entity

$750

Certificate of Formation for a Texas Nonprofit Entity

$25

Certificate of Fact (covering Certificate of Existence or Status)

$15

LLC Name Reservation (120 days or renewal)

$40

LLC Name Search

$1

Registered Agent Services

$0-$300

Assumed Name Certificate

$25

Application for Trademark Registration

$50 per class

Cost of Forming an LLC​

The costs of forming an LLC in Texas can be divided into two parts. One is the primary cost; the other is the additional cost. 

Primary Cost

The Texas State Filing Fee for LLC filing is the primary cost of starting an LLC. This is payable to the Texas Secretary of State. The filing fee for your Texas LLC formation is $300. Pay this to submit your Certificate of Formation.

This fee will cover:

  • The administrative costs for document formation and processing &
  • The official LLC registration costs with the state government.

Additional Cost

Apart from the primary cost, there are some additional costs that you will need to pay if you decide to go through the associated steps.

  • Registered Agent Fee

Every LLC needs to have an appointed registered agent. But this fee is optional, as you can choose not to hire a professional service.

Many business owners go for professional services for ease of use and compliance. The fee for registered agent services depends on the provider and the degree of service offered.

  • Name Reservation Fee

Other than choosing a name for your Texas LLC, you should reserve that name. It is to protect your brand identity and secure that name for a specific period.

In the state of Texas, reserving an LLC name costs $40. Reserve the name before filing the formation documents.

  • Business Licenses, Permits, and Insurances

Getting business licenses, permits, and insurance is essential for starting a Texas LLC. Those are optional but will ensure a smooth business journey.

  • Business Licenses

A business license can be general or professional. The general permit depends on the type of business and its location. The professional license depends on your profession and the application, examination, and renewal fees.

  • Business Permits

Some exceptional businesses require specific permits or certifications from state or local authorities.

  • Business Insurances

There are insurances like:

  1. General Liability Insurance
  2. Workers’ Compensation Insurance
  3. Professional Liability Insurance
  4. Commercial property insurance

Note that some steps are incidental but come free of charge. One of the most common ways of doing this is by getting an employer identification number (EIN) from the Internal Revenue Service (IRS). Also, the annual report filing fee for LLCs in Texas is $0.

So what’s next? Now that you get the costing idea, it’s time to form your LLC. But do you know the proper method to do so? If not, then read our next section!

How to Create an LLC in Texas?

Creating an LLC in Texas takes several steps. Below, we will provide a general outline of how to file an LLC in Texas:

1. Name Your LLC

Start by naming your LLC something unique and distinguishable. However, make sure it complies with the Texas naming requirements. Just be careful not to be too similar to an existing business entity within Texas.

There should be phrases like “Limited Liability Company” in your chosen name. You can also use abbreviations like “L.L.C.” or “LLC.”

2. Designate a Registered Agent

A registered agent should be designated for your LLC. That agent will receive legal documents on your company’s behalf. This agent can be a professional individual or a company authorized to be an agent.

You can be an agent for your own company, too. But whomever you designate, that agent must have a physical address in Texas and be available during regular business hours.

3. File Formation Documents

You need to file the formation documents with the Texas Secretary of State. You can complete this online, by mail, or in person. The Certificate of Formation typically has information such as:

  • LLC name and address,
  • Registered agent’s name and address,
  • Management structure,
  • Purpose of the LLC,
  • Duration of the LLC, &
  • Organizer’s signature.

4. Create an Operating Agreement

Although the Texas LLC law does not demand it, it highly recommends creating an operating agreement. This document records internal operations like:

  • The ownership structure,
  • Management responsibilities,
  • Voting rights,
  • Profit distribution, & more.

5. Obtain an EIN

For an employer identification number, apply to the Internal Revenue Service. You will use this unique nine-digit number for:

6. Comply with Additional Requirements

Some LLC businesses require additional steps when creating an LLC. Those steps include obtaining licenses, permits, insurance, or certifications. These can be at the federal, state, or local levels.

When you file for an LLC in Texas, research, depending on the nature of your business, industry, and location, get those additional requirements if necessary.

7. File Annual Reports

After your Texas LLC formation, you must file an annual report with the Texas Secretary of State. It will help you to keep your LLC in good standing.

Get the help of an expert if you find it hard to make an annual report. But it’s a must to make it. Failure to submit annual reports on time will cause penalties or even the dissolution of your LLC.

Furthermore, as a new entrepreneur, it’s important to search for ways to lower your costs. So, let’s get into the following and learn about the cheapest way possible to start an LLC in Texas.

The Cheapest Way to Start an LLC in Texas

The process required to start an LLC in Texas usually incur a few costs. However, following  those steps carefully will help to minimize the cost:

  • Do Your Formation

You can do the LLC formation process by yourself instead of hiring a professional service. In this way, you can avoid paying for the hired assistance.

For this, go to the Texas Secretary of State website. Here, you will find the fill-out instructions and resources for the Certificate of Formation form. You can complete this online or by mail.

  • Choose a Simple Business Structure

You will need less money if you opt for an LLC with a single member and a basic operating agreement. There will be little paperwork or legal fees. Note that complex ownership structures or multi-member LLCs consist of higher formation costs.

  • Avoid Name Reservations

Check the Texas Secretary of State’s website to see if the name you want is available. However, since reserving a name is optional, do not do so. In this way, you can save on name-reservation fees.

  • Be Your Registered Agent

An LLC owner is required to designate a registered agent for the LLC. People usually appoint professional individuals or companies for that post. However, you can also avoid hiring professional assistance by being an agent. Just make sure to carefully attend to all critical LLC duties.

  • Apply for an EIN

You might need an EIN from the IRS for various necessities, like tax, hiring purposes, or bank accounts. There is no fee to submit for an EIN. However, if you use third-party services to obtain it, you may have to spend money for it. So, do this on your own.

  • Cut Additional Expenses

Research and identify the necessary ones before obtaining any licenses, permits, certifications, or insurance; only get the essential ones that are required to operate your business legally. And keep an eye out for the cost-effective options.

  • Keep Low Ongoing Costs

Even after your Texas LLC formation is over, you must continue to pay for a few ongoing costs—for example, annual report filings. Always file the necessary reports and renewals on time to prevent late fees or penalties.

Conclusion​

So, how much to start an LLC in Texas? It is affordable if you know how to form your LLC cheaply. It will be helpful if you make a budget for your LLC formation in Texas. 

Besides, you may also find a cheaper way to create your LLC to save some extras. An expert service provider may help you in this manner. In fact, you can also choose a perfect state for your LLC among the best states in the USA for an LLC formation.

Key Points

  1. Cost of Forming an LLC in Texas:
    • The primary cost is the filing fee for your Texas LLC formation, which is $300.
    • Registered agent fees and name reservation fees can be considered additional costs.
    • The additional cost also covers business licenses, permits, and insurance fees.
  2. Steps to Creating an LLC in Texas:
    • Name your LLC in a unique and distinguishable way.
    • Designate a registered agent with a Texas physical address.
    • Send the Texas Secretary of State the Certificate of Formation by mail or online.
    • Create an operating agreement to outline internal LLC operations.
    • Obtain an employer identification number from the IRS for tax and other purposes.
    • Based on your business, comply with other additional requirements.
    • To maintain the good standing of your LLC, file annual reports.
  3. The Cheapest Way to Start a Texas LLC:
    • Instead of hiring professional assistance, form the LLC yourself.
    • Choose an LLC with a simple structure to reduce paperwork and legal costs.
    • Avoid reserving an LLC name to save some fees.
    • Be your own registered agent rather than hiring one.
    • As an alternative to using any third-party service, apply for an EIN directly from the IRS free of charge.
    • Get only the necessary licenses, permits, and insurance to keep the additional expenses low.
    • Maintain low ongoing costs by filing reports and renewals on time.

Frequently Asked Questions

How to start an LLC in Texas for free?

LLC filing in Texas is not free. However, it charges fewer fees than other states. You can find many ways to cut your expenses, but you must pay some mandatory fees. 

Is Texas LLC filing online possible?

Yes! It’s possible to file an LLC online in Texas. The Texas Secretary of State supports electronic filing using SOSDirect or SOSUpload. The SOSDirect account features no monthly subscription fees However, there are expenses for filing documents, obtaining copies and certificates, and submitting queries.

Do you have to renew LLCs every year in Texas?

Yes! You must renew your LLC every year in Texas to operate it legally. However, the process is simple. You may submit the form to renew your LLC registration to the BOC office. It may cost you $40.

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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