How To Set Up An LLC In Texas Setting up an LLC can be intimidating, to say the least. Each state has specific filing requirements and related fees. If you wish to file an LLC in Texas, you’re going to want to focus on specific steps for the unique […]
Setting up an LLC can be intimidating, to say the least. Each state has specific filing requirements and related fees. If you wish to file an LLC in Texas, you’re going to want to focus on specific steps for the unique requirements in the state
Don’t worry. We did all of the leg work for you in putting together this streamlined explanation. Read on to learn how to set up an LLC in Texas.
Before You Create an LLC in Texas
It’s always a good idea to know the exact steps and requirements before filing your LLC. In Texas, as in every state, there are a few specific requirements you’ll need to have squared away before moving forward with the process.
Unique requirements for Texas include:
• Putting “LLC” in the name: Texas law requires the inclusion of “Limited Liability Company” in the name. You have the option to abbreviate to “LLC” or “L.L.C” Additionally, “Limited” and “Company” can be written as “Ltd.” and “Co.” respectively.
• The LLC can’t share a name with an existing business: You must also not knowingly name your LLC after an existing entity already operating in the state. If your name’s too similar to an existing brand, your application will be rejected.
Use the Texas Taxable Entity search engine to see if any existing businesses have the same name as the one you hope to register. If the name is available, reserve it by filing a Reservation or Renewal of Reservation of Name form or Form 501. The filing fee is $40 and it allows you to hold the name for up to 120 days.
• A registered agent is required: All LLCs operating in the state of Texas must have a registered agent. The registered agent can be an individual Texan, including the LLCs owners and workers, or a registered agent service with permission to operate in the state. The agent agrees to accept paperwork on behalf of your business in the event of a lawsuit. They must have a physical address within the state.
Crucially, the LLC cannot act as its own registered agent. Obtaining a reputable agent can cost between $100 and $300 annually.
Be sure to do your research and know the agent’s service will cover all the necessary bases.
Getting the Right Forms and Paying Fees
Below are links to the necessary forms for filing your LLC as well as the related filing fees.
Form 205: The “Certificate of Formation—Limited Liability Company” is the most crucial paperwork needed for getting your LLC off the ground. It’s available for download and the filing fee is $300.
Form 304: An “Application for Registration of a Foreign Limited Liability Company” form must be filed by anyone operating outside of and not native to Texas that wishes to operate an LLC in the state. Access the form here. The filing fee is $750.
Additional costs related to taxes, filing fees, or hiring a registered agent can range between $100 and $1000. There are no yearly fees associated with maintaining your LLC in Texas.
Texas State Franchise Tax Fee
Most Texas LLCs are subject to an annual state franchise tax. There is additional information available through the official Texas Comptroller website as to how costs get calculated. You can find related tax documents here.
Once you have all relevant paperwork filled out, you can:
- Go ahead and file them online.
- Mail the documents to P.O. Box 13697, Austin, Texas 78711-3697.
- Fax your completed paperwork to (512) 463-5709.
- Deliver the documents in person to the James Earl Rudder Office Building, 1019 Brazos, Austin, Texas 78701.
Please be aware that if you decide to send a fax, you’re also required to submit additional credit card information using Form 807.
Correcting Texas LLC Filing Errors
Mistakes happen. If you file an LLC and later realize there are errors to correct, you will have to file a Certificate of Correction or Form 403 with the Texas Secretary of State. It’s available here.
When completing the document, carefully identify what you wish to correct. Please note that there’s a $15 filing fee Also, the process presently cannot be completed online.
Should You Create a Corporation or DBA Instead of an LLC?
One popular question regarding LLCs is whether one is necessary in the first place. In Texas, the cost to establish a corporation is roughly the same. Forming a “doing-business-as” or DBA is considerably cheaper thanks to the $25 state filing fee and $15 fee per county.
There’s a similar level of personal separation with a DBA, but LLCs offer a level of protection, particularly with legal matters, that some business owners feel make it worth the investment.