Starting a business is an exciting venture, and one of the smartest steps entrepreneurs take is choosing a Limited Liability Company (LLC) structure. If you plan to register LLC in Texas, understanding the legal and filing requirements is essential. Texas offers a business-friendly environment, strong liability protection, and simple compliance procedures—making it one of the most favorable states to launch an LLC. To help you get started, here’s a detailed guide covering the top 10 legal and filing requirements for forming an LLC in Texas.

1. Choose a Unique Business Name

The first step is selecting a distinctive name for your LLC. Texas law requires your business name to be unique and distinguishable from other registered entities in the state. You can verify name availability through the Texas Secretary of State’s SOSDirect portal. The name must include “Limited Liability Company” or abbreviations like “LLC” or “L.L.C.” Avoid restricted words such as “bank” or “insurance” unless your business qualifies for those activities.

2. Appoint a Registered Agent

Every LLC in Texas must have a registered agent to receive legal documents, tax notices, and official correspondence. Your agent can be an individual or a business entity authorized to operate in Texas. They must maintain a physical address (P.O. boxes are not allowed) and be available during standard business hours. Many business owners use professional registered agent services for privacy and reliability.

3. File the Certificate of Formation

To legally establish your LLC, you must file a Certificate of Formation (Form 205) with the Texas Secretary of State. This document includes your company name, registered agent details, business purpose, and management structure. You can file online through SOSDirect or by mail. The filing fee is typically $300. Once approved, your LLC becomes an official legal entity recognized by the state.

4. Create an Operating Agreement

Although not legally required, drafting an Operating Agreement is highly recommended. This internal document outlines ownership percentages, profit distribution, member responsibilities, and decision-making procedures. A well-written agreement helps prevent conflicts and provides a clear governance structure for your LLC, especially if you have multiple members.

5. Obtain an Employer Identification Number (EIN)

Next, apply for an EIN from the Internal Revenue Service (IRS). This number functions like a business Social Security number and is necessary for tax filing, hiring employees, and opening a business bank account. You can obtain an EIN for free through the IRS website. Even if you operate as a single-member LLC, having an EIN simplifies tax reporting and business transactions.

6. Register for State Taxes

Depending on your business type, you may need to register for various state taxes through the Texas Comptroller of Public Accounts. While Texas doesn’t impose a state income tax, LLCs may be subject to franchise tax and sales tax. It’s important to understand which taxes apply to your business category to ensure compliance and avoid penalties later.

7. Apply for Business Licenses and Permits

After your LLC is formed, check if your business requires specific licenses or permits. The requirements depend on your industry and location. For example, food service businesses, contractors, or healthcare providers often need specialized permits. You can use the Texas Business Licenses & Permits Guide to determine which authorizations are necessary before you apply for LLC in Texas and begin operations.

8. Comply with Annual Reporting Obligations

Unlike some states, Texas does not require a traditional annual report. However, every LLC must submit an Annual Franchise Tax Report to the Texas Comptroller each year. This report determines whether your business owes any franchise taxes based on its income level. Filing on time keeps your business in good standing and ensures continued operation within state regulations.

9. Maintain Proper Business Records

Maintaining accurate and organized records is a vital part of operating a Texas LLC. Keep all formation documents, meeting notes, tax filings, and financial statements safely stored. The Texas Business Organizations Code recommends transparency and documentation to demonstrate compliance and protect your limited liability status. Proper record-keeping also simplifies tax audits and financial reviews.

10. Open a Dedicated Business Bank Account

Finally, separate your personal and business finances by opening a dedicated business bank account. This separation helps maintain the LLC’s limited liability protection and simplifies accounting. Banks will typically require your Certificate of Formation, EIN, and Operating Agreement to open the account. Keeping business funds independent reinforces credibility and supports better financial management.

Why Choose Texas for Your LLC?

Texas has earned a strong reputation for supporting entrepreneurs. With no personal income tax, affordable filing fees, and straightforward business laws, it’s an ideal state for small and medium enterprises. Additionally, Texas’s growing economy and access to resources make it a prime choice for new ventures seeking long-term stability and success.

Conclusion

Forming an LLC in Texas is a smart move for entrepreneurs looking for flexibility, protection, and growth potential. From name registration to tax compliance, each step ensures your business remains legally secure and professionally recognized. By following these top 10 legal and filing requirements, you can confidently start your entrepreneurial journey in the Lone Star State.

If you’re ready to take the next step, make sure you fully understand all LLC requirements Texas to keep your business compliant and positioned for success.