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

There are some required costs and some optional costs to starting an LLC in Texas. The main required one is paying for a certificate of formation (Form 205) with the Texas Secretary of State (SOS).

Optional costs include:

• Hiring registered agent services
• Working with an LLC formation company
• Consulting legal help
• Reserving a name before filing (Form 501)
• Checking for name availability
• Operating under a doing business as (DBA) name (Form 503)

Here is a general overview of all these potential costs:

Below, you can find a deeper breakdown of how these fees work.

Texas LLC Filing Fees

For most people starting an LLC in Texas, the filing cost is $300. If you’re forming a nonprofit organization, you can reduce this fee to $25. Veteran-owned businesses also qualify for a reduced filing fee. These situations apply to all Texas-based businesses.

If your business is based in another state and operates within Texas, you’re considered a foreign entity. In this case, you’re required to pay $750 for Texas business formation. Out-of-state businesses transacting in Texas are legally obligated to register as foreign LLCs within 90 days using Form 304.

The cost of submitting these forms online and physically is the same. However, you can expect faster results with SOSDirect, which is Texas’ online system for SOS matters.

If you want even faster results, you can pay an additional $25 per document for expedited service. You can also pay an extra $10 to receive certified copies of your LLC formation documents.

Texas LLC Registered Agent Costs

Every business entity in Texas is legally required to have a registered agent. The registered agent is the company’s official point of contact, receiving legal documents on its behalf.

The business owner can be their own registered agent if they are a Texas resident. This route is free. However, you end up sacrificing time reviewing mail. Your physical address also becomes public record, which isn’t ideal for privacy.

Alternatively, you can hire an LLC service provider to be your registered agent. This takes this tedious task off your plate, though it does cost between $100 and $300 usually.

Texas LLC Business License Costs

You pay for any business licenses on top of the fees of forming your LLC. Each of these licenses varies in cost, starting at $15 and going as high as several hundred dollars.

For a full list of business licensing costs, review the Texas Business Licenses & Permits guide. There are close to 150 pages of potential permits and licenses, so take some time to see if your company needs any of them.

Texas LLC Operating Agreement Costs

An operating agreement is an optional internal document. It lays out the roles and responsibilities of each business owner and explains what is to happen if the business is to collapse in the future.

Given that you don’t submit your operating agreement to the state of Texas, there’s nothing stopping you from creating it yourself using a template from LegalShield or another site. These types of templates are pretty basic, though, so they might not cover your specific business needs. Therefore, some business owners prefer to hire a business lawyer or an LLC service company to make a custom operating agreement for them, which can cost several hundred dollars.

For additional security, you can get your operating agreement notarized to prove that the signatures are authentic. This costs $10.

Texas law does not require business owners to pay anything to maintain their LLCs year to year. However, if you need to change any information about your business, you must submit the proper documentation, which comes with a filing fee.

Here’s a breakdown of these potential costs:

Texas LLC Annual Report

Texas requires every business to submit an annual report by May 15 of each year (or face a $50 penalty). These reports are called Public Information Reports (PIRs). PIRs include general information about your business, such as your Employer Identification Number (EIN) and your current owners. There is no cost to filing a PIR.

Texas LLC Franchise Tax

As of Jan. 1, 2024, The Texas LLC Franchise Tax only applies to businesses that earn over $2.47 million in revenue. This is an increase from the previous year’s rate of $1.23 million. This increase came from Senate Bill 3, which resulted in a few additional changes.

Prior to this bill, businesses making below the earnings threshold were required to provide a No Tax Due Report. After Jan. 1, 2024, they no longer have to file this report; they just have to file a standard PIR.

For businesses who make over the $2.47 million earnings threshold, the LLC Franchise Tax rate has a few rules:

• Retail and wholesale businesses pay a tax rate of 0.375%.
• All other businesses pay a rate of 0.75%.
• There is a compensation deduction limit of $450,000 for employee wages. You can take up to this out of your revenue to reduce your owed amount.

Yes, it is cheaper to start an LLC yourself. However, what you don’t pay in money, you end up paying in time and energy. You also literally pay for your mistakes, as you have to pay $15 per correction.

The point of an LLC company is to take these problems out of your hands. Naturally, you need to pay several hundred dollars to get this done, which might be out of the budget of some small business owners.

Here’s a table showing you a quick comparison of the pros and cons of filing yourself vs. using a service:

While we recommend keeping up to date with the latest tax data through official Texas resources, here are some simple tax tips to keep in mind:

• LLC members are subject to a 15.3% self-employment tax if they form their LLC under a partnership, C corporation or sole proprietorship.
• Texas does not have state income tax.
• Sales tax permits are required for anyone who sells, rents or leases tangible personal property. You can apply for this permit with the Texas comptroller. Sales tax rates average at 6.25% with an extra 2% depending on the district.
• The unemployment insurance tax is the only payroll tax businesses have to pay in Texas.
• Texas’ annual reports are due on May 15. Federal tax returns stay the same (January, April, June and September 15).
• Franchise tax returns, if applicable, are due on May 15 alongside PIRs.

In sum, Texas has high upfront costs for business formation, but the lack of income tax means high potential savings down the line.

The cost of forming an LLC in Texas can vary from $25 to $750, with most people paying $300. If you hire an LLC service to handle this on your behalf, you’ll end up paying several hundred dollars more.

These numbers do not include the extra costs of making corrections, hiring a registered agent or seeking legal assistance. Because of this, it helps to budget more than what you expect for forming a Texas LLC.

To provide consumers with objective and accurate information, our credentialed legal experts created a comprehensive rating system for Limited Liability Company (LLC) services. We researched five online LLC, registered agent and trademark registration services, including ZenBusiness, LegalZoom, Swyft Filings, Northwest Registered Agent and Bizee (formerly Incfile).

We conducted a survey in 2024 of 200 professionals who were currently using LLC services or had used LLC services within the past year. We analyzed the results of this survey to determine the following rating criteria:

• Features (20%)
• Value for Money (25%)
• Customer Service (20%)
• Usability (25%)
• Reputation and Credibility (10%)

Visit the full LLC methodology page for more details on our rating system.