Texas often sits at the top of lists showing which state is best for launching and growing a new business.
From a neighborhood lawn-care service and an online clothing store to a tech startup with global dreams, a Texas Limited Liability Company (LLC) gives you legal protection, builds trust with customers, and throws in some nice tax perks.
This step-by-step guide walks you through picking a name, filing the right papers, and keeping everything on the level, so you can form an LLC in Texas with peace of mind-whether you live in Houston or halfway around the world.
Why Choose Texas for Your LLC?
With the nations second-biggest state economy, friendly laws, no personal income tax, and a booming startup scene, Texas offers a stage where businesses can run hard and grow fast.
Key Benefits of Starting an LLC in Texas:
- No State Income Tax: Owners pocket more money because Texas does not tax LLC profits at the personal level.
- Supportive Business Climate: Low costs, quick permits, and plenty of investors knock Texas high on the ease-of-business scale.
- Strong Legal Protection: An LLC shields your home and savings by keeping business risks separate from your personal finances.
- Perfect for Foreign Founders: Non-U.S. citizens and residents can start an LLC in Texas, own it fully, and do so without a U.S. address or visa.
- Thriving Business Hubs: Cities such as Austin, Dallas, and Houston buzz with innovation, offer abundant networking events, and roll out policies that welcome startups.
No matter where you sit in the world, Texas remains a low-cost, flexible spot for launching your LLC on solid ground.**
Step 1: Pick a Name for Your Texas LLC
Your journey starts by picking a name no one else has, one that meets the law and captures your vibe. That name gets filed with the Texas Secretary of State.
Texas Naming Rules:
- It must have Limited Liability Company or the short forms LLC or L.L.C. somewhere in it.
- It cant hint that you’re part of the government, and certain words like Bank, University, or Insurance need special permission.
- It has to look different from every other business already registered in Texas.
Quick Name Check:
Head to the Texas Secretary of States website and run your idea through the Taxable Entity Search Tool to see if its still up for grabs.
💡 Pro Tip: Grab your domain and exact social media handles at the same time so your brand stays consistent everywhere.
Step 2: Pick a Registered Agent in Texas
Every Texas LLC needs a Registered Agent, and yes, its the law. This person or company collects official letters, court papers, and any other legal notices for your business.
Requirements for a Registered Agent:
- They must be a Texas resident or a company allowed to do business in Texas.
- They need a real street address in Texas; P.O. Boxes wont work.
- They must be available during regular business hours, usually 9 a.m. to 5 p.m. Monday through Friday.
Options:
- If you live in Texas, you can act as your own registered agent.
- Many owners choose a professional service to keep their address private, stay compliant, and avoid missing important papers.
📌 At Bizstartz we provide low-cost Texas registered agent plans that include mail scanning, document forwarding, and yearly compliance reminders.
Step 3: File the Certificate of Formation with the Texas Secretary of State
After naming your agent, the next step is to file Form 205, or the Certificate of Formation, with the Texas Secretary of State. This paper officially brings your LLC to life.
What the Certificate of Formation Includes:
- Your LLCs legal name
- Name and address of your Registered Agent
- Whether the LLC will be member-managed or manager-managed
- Duration of the LLC-usually perpetual
- Broad general-purpose clause
- Name, address, and signature of the Organizer
Filing Options:
- Online via SOSDirect-fastest method
- By mail to P.O. Box 13697, Austin, TX 78711-3697
- By fax (Form must include a credit card payment form)
Cost:
- Filing fee $300
- Optional $25 to reserve the business name in advance
- Processing time 5 to 7 business days or within 1 to 2 days with expedited processing
Step 4: Create an Operating Agreement
Even though Texas doesn’t require an Operating Agreement, this living document is still crucial. It serves as a private contract among members and spells out how the business will run day to day.
What to Include in an Operating Agreement:
- Ownership structure (who owns how much of the business)
- Rights and responsibilities of each member or manager
- Profit and loss distribution rules
- Voting procedures and decision-making guidelines
- Procedures for adding or removing members
- Dissolution process
Why You Need It:
- Helps prevent internal disputes
- Establishes clear roles and expectations
- Demonstrates professionalism to banks, partners, and investors
- Provides clarity during legal proceedings
💡 Even if you are a single-member LLC, having an Operating Agreement shows the IRS and banks that your business is a separate legal entity.
Step 5: Get an Employer Identification Number (EIN)
An EIN, or Employer Identification Number, is the 9-digit tax ID the IRS gives to your business. You need one if you plan to:
- Open a business bank account
- Hire employees
- File federal or state taxes
- Apply for business credit or licenses
How to Apply:
U.S. Citizens/Residents: Apply online at irs.gov.
Non-Residents: Fill out Form SS-4 and fax or mail it to the IRS. (No SSN needed.)
📌 At Bizstartz, we help non-U.S. residents get an EIN-even without a Social Security Number (SSN) or ITIN.
Step 6: Understand Texas Franchise Tax & Public Filings
Every LLC in Texas, big or small, needs to send an Annual Franchise Tax Report and a Public Information Report (PIR) to the Texas Comptroller of Public Accounts.
Key Points:
- Due Date: May 15th each year
- Taxes are based on gross sales, and no tax is due if revenue stays under $2.47 million
- Even if you owe nothing, you still file a No Tax Due Report
Forgetting to file brings penalties, interest, and may hurt your good standing with the state.
✅ Bizstartz offers annual compliance packages to handle your filings and keep your LLC active.
Step 7: Open a Business Bank Account
Keeping personal and business money separate protects you and makes taxes easier. A dedicated business account tracks income, expenses, and sales tax at a glance.
Documents Needed:
- EIN confirmation letter from IRS
- Certificate of Formation (filed Form 205)
- Operating Agreement
- Valid ID and proof of address
Options:
- Traditional U.S. banks usually want an in-person visit.
- Online banks like Mercury, Relay, or Wise work well for non-residents.
💡 We help both local and international founders open U.S. business bank accounts remotely, even if you’re outside the U.S.
Step 8: Register For Business Licenses or Permits
Before you start trading, take a minute to find-out if your Texas LLC needs any special licenses. Depending on what you sell, where you work, and who you serve, you might run to the city, state, or even a federal office.
Common Licenses:
- Sales Tax Permit (needed if you sell taxable items or services)
- Professional Licenses (required for healthcare, finance, real estate, and similar fields)
- Home Occupation Permit (must-have if your office is your kitchen table)
To see which papers are yours, read the Texas Business Licenses & Permits Guide or just call your local city or county clerk.
Step 9: Stay Compliant Every Year
Your LLC stays strong only if you keep up with yearly chores. Skipping a single task could cost you money and, worse, drag your limited liability protection down with it.
Ongoing Responsibilities:
- File Annual Franchise Tax & Public Information Report
- Renew any licenses or permits on time
- Keep Registered Agent details current
- Organize business records and tidy accounting
- Update the Operating Agreement when things change
📌 BizStartz can handle compliance checks, bookkeeping, and BOI filings so your Texas LLC never misses a beat.
Final Thoughts
Starting an LLC in Texas gives local and foreign business owners a strong launchpad.
With no state income tax, a straightforward setup, and solid asset shielding, Texas suits anyone ready to enter the U.S. market.
Whether you’re opening an online shop, running a consulting firm, or coding a tech app, a Texas LLC keeps you legal, guards your personal wealth, and connects you to customers worldwide.
📌 Ready to Start Your Texas LLC the Easy Way?
Let Bizstartz handle your entire LLC setup from A to Z. Our team guides non-U.S. founders through getting an EIN, opening a bank account, and meeting every rule.
✅ Registered Agent
✅ EIN Application
✅ Operating Agreement
✅ Annual Compliance
✅ U.S. Business Banking Support
👉 Visit www.bizstartz.com to get started today.
FAQs About Forming an LLC in Texas
1. How long does it take to form a Texas LLC?
Standard filing takes 5-7 business days, but submitting online through SOS Direct is usually faster. Expedited service is also offered for an extra fee.
2. Can a foreigner own a Texas LLC?
Absolutely. People and companies from outside the U.S. can start and fully own a Texas LLC. You don’t need to be a resident or citizen.
3. Do I need a physical office in Texas?
You don’t need a full-fledged office, but you must name a registered agent who has a real Texas address.
4. What are the annual fees for Texas LLCs?
- Annual Franchise Tax Report: $0 for small businesses under $2.47 million
- Public Information Report: Free, but still mandatory
- Registered Agent renewal: varies by provider, usually $49 to $150 each year
5. Can I use my Texas LLC to open an Amazon or Stripe account?
Yes! A Texas LLC works just fine for Amazon FBA, Etsy, Shopify, PayPal, Stripe, and other big online platforms.
