How to Start an LLC in Texas: A Comprehensive Guide

What is an LLC in Texas?

An LLC, or Limited Liability Company, is a business structure that provides personal asset protection and a separate legal entity from its owners. It's a popular choice for small businesses and entrepreneurs in Texas.

How Much Does it Cost to Start an LLC in Texas?

The cost to start an LLC in Texas varies depending on the method you choose to file and the services you need. Here are the estimated costs associated with starting an LLC in Texas:

1. File Online:

The Texas Secretary of State's website allows you to file online for a fee of $300. This is the most cost-effective option, and you'll receive your certificate of formation within 2-3 business days.

2. File by Mail:

You can also file by mail, but this will cost you $300 plus a $50 filing fee. This option takes longer, typically 2-4 weeks, and you'll need to wait for the state to process your application.

3. File with an Attorney:

If you hire an attorney to help you with the process, you can expect to pay between $500 and $2,000, depending on the complexity of your case.

4. File with a Business Formation Service:

Companies like Incfile, ZenBusiness, and Northwest Registered Agent offer business formation services, including LLC formation, for a fee that ranges from $0 to $300, depending on the package you choose.

5. Registered Agent Fees:

You'll need to appoint a registered agent to receive official documents and notices on behalf of your LLC. The cost of a registered agent service varies but you can expect to pay between $100 and $300 per year.

6. Operating Agreement:

An operating agreement is a crucial document that outlines the ownership and management structure of your LLC. You can hire an attorney to draft this document for you which will cost between $500 and $2,000.

7. Business Licenses and Permits:

Depending on the type of business you're operating you may need to obtain additional licenses and permits. These costs vary depending on the industry and location.

8. Annual Fees:

Texas LLCs are required to file an annual report with the Secretary of State which costs $25. You'll also need to pay a franchise tax which ranges from $0 to $300 depending on your business's revenue.

9. Taxes:

As an LLC you'll need to pay self-employment taxes on your business income. You'll also need to file a tax return with the IRS and pay any applicable taxes.

10. Other Costs:

Depending on your business needs you may need to pay for additional services such as accounting bookkeeping insurance etc.

Steps to Start an LLC in Texas

1. Choose a Business Name:

Your business name must be unique and not already in use by another business in Texas. You can search the Texas Secretary of State's database to ensure your desired name is available.

2. Select a Registered Agent:

You'll need to appoint a registered agent who will receive official documents notices on behalf of your LLC. You can choose a friend family member but it's recommended hiring professional registered agent service.

3. File Certificate Formation:

You can file certificate formation online mail make sure include required information such as business name address registered agent.

4 Create Operating Agreement:

Operating agreement outlines ownership management structure crucial document hire attorney draft document cost between $500-$2000.

5 Obtain Business Licenses Permits:

Depending type business operating may need additional licenses permits costs vary industry location.

6 File Annual Report Paying Annual Fees:

Texas LLCs required file annual report Secretary State costs $25 pay franchise tax ranges $0-$300 depending revenue.

7 Filing Taxes Other Business Requirements:

LLC pay self-employment taxes business income file tax return IRS pay applicable taxes depending needs pay additional services accounting bookkeeping insurance etc.

Overall cost starting LLC Texas range $300-$2000 more depending services needed complexity case.

Now know estimated costs associated starting LLC Texas let's move steps need take form LLC.