How Much Does an LLC Cost in Texas

Forming an LLC in Texas costs $300 for a domestic LLC and $750 for a foreign LLC. But what are other costs to consider? Read on.

The total cost of setting up an LLC in Texas can be grouped into three main categories:

• One-time fees for registering the company
  
• Annual fees for maintaining the LLC
  
• Optional or add-on fees

The fee for a Certificate of Formation is the only one-time fee you need to consider. Annual fees, on the other hand, include the Franchise Tax due for the filing year and a $1 service charge for online payments.

And depending on other services you may need, add-ons can include the costs for an operating agreement, registered agents, and reservation fees.

Keep reading for the full breakdown.

Texas Certificate of Formation Fees

Cost: $300 - $750

The Certificate of Formation fee is often referred to as the basic cost of forming an LLC in Texas. It's a legal fee that is payable to the Texas Secretary of State.

The cost of a Certificate of Formation is different for domestic and foreign LLC registrations:^[1]

• Texas Domestic Certificate of Formation Fee: $300
  A domestic LLC is a business that is formed within its home. In other words, you are registering an LLC in Texas, where your business was originally formed.

• Texas Foreign Application for Registration Fee: $750
  A foreign LLC conducts business in a different state from where it was first created. This includes companies from outside the U.S. that want to start an LLC in the country.

There are no other fees due to the state. Just take note that if you pay the Certificate of Formation using a credit card, there is a 2.7% convenience fee.^[2]

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Texas Sales Tax Permit

Cost: $0

All LLCs operating in Texas need a Texas Sales Tax Permit. And applying for one is FREE.^[4]

You need this sales tax permit to legally collect tax from your customers, which you then forward to the state. You can get a new permit through the Texas Comptroller's official website. It automatically renews every year.

Texas Annual Franchise Tax Rates

Cost: 0.331 - 0.75%

There are no annual registration fees for LLCs in Texas. However, you may need to file an annual franchise tax report with the Texas Comptroller.

All businesses in Texas that exceed the annual tax threshold of $2,470,000 are required to pay the franchise tax. The franchise tax rate range in Texas is 0.331% - 0.75%.^[5]

There is no filing fee for a franchise tax report. But there is a $1 service fee for online payments.

Note that regardless of revenue, all LLCs in Texas must submit a Public Information Report. You'll be charged a $50 fine if you file your report after the due date. This applies to all LLCs, even if you don't owe any taxes with the report.^[6]

Optional Fees for LLCs in Texas

Your Texas LLC might never need to pay for the add-ons below. However, it's a good idea to set aside a budget just in case.

Here's a summary of the add-ons and their pricing:^[1]

Texas Registered Agent Fee

Annual Cost: $0, or $100-$300/yr

In Texas, you must have a registered agent to receive business and legal documents for your LLC. This includes government notices, tax forms, and annual reporting forms.

You can technically be your LLC's registered agent—as long as you're at least 18 and have a physical street address in Texas. You must also be available to receive documents during business hours.

However, your address will be public record. So many LLCs like to hire a registered agent service to keep their personal details private. These services usually charge $100-$300 per year to be your registered agent.

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Texas LLC Expedited Processing Fee

Cost: $10 to $25

The Secretary of State will review your application to form an LLC in Texas. This can take up to 72 business days if sent by mail or fax and within 10-15 days if submitted online.^[8]

If you need to speed up the process, you will have to pay an additional $25 for expedited processing. Your Certificate of Formation application will be moved to the front of the line, ahead of everyone else who applied before you.

You can also request expedited services for obtaining certified copies of the LLC's business documents. This costs $10 per copy.

Texas LLC Operating Agreement Fee

Cost: $0, or up to $500+

LLCs in name are not required to have an operating agreement. However, it's recommended because it defines important rules and regulations that all members must follow.

An LLC operating agreement contains the following:

• The roles and responsibilities of each member
  
• How new or departing members will be treated
  
• How business profits and losses will be divided

Ideally, you should already have a signed Operating Agreement before forming an LLC in name. But if your LLC is already formed, you can always draft it yourself after.

Alternatively, an LLC attorney might charge you a $500 flat fee for a standard operating agreement. If you have more complex details, the cost could be higher.

Employer Identification Number

Cost: $0, or $50 to $99

Any LLC with more than one member or with employees must have an EIN, regardless of how it's taxed. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for tax-related purposes.

You can just apply for an EIN for free on the IRS website. But if you'd like an LLC service to process it for you, you can do so for a small fee. Here are some providers that do this and their pricing:

• Northwest Registered Agent: $50
  
• Bizee: $70
  
• ZenBusiness: $99

Single-member LLCs in Texas don't require an EIN, but it's almost essential in practice. For instance, you'll need one if you hire employees or want to open a business bank account.

BOI Report

One-Time Cost: $0, or up to $149

The Beneficial Ownership Information (BOI) is a one-time report that must be submitted to the Financial Crimes Enforcement Network (FinCEN) within 90 calendar days of your LLC's formation.^[9]

It includes information about the LLC's beneficial owners, including name, birth date, and address.

FinCEN doesn't charge a fee to submit your BOI report. But you can pay an LLC service to process it for you and save yourself the hassle:

• Northwest Registered Agent: $25
  
• LegalZoom: $149
  
• ZenBusiness: $149

You're considered a beneficial owner if you own 25% or more of the ownership interests in your LLC. Or if you exercise substantial control over the LLC.

Texas LLC Trade Name Registration Fee

Cost: $25

An LLC that wants to operate under a name that is different from its official registered name needs to file a Trade Name Registration. This is also called an Assumed Name Certificate (Form 503) and costs $25.

Texas LLC Application for Reservation Fee

Cost: $40

When you reserve a name for your LLC, it is held for your use for up to 120 days.

Texas LLCs are not obligated to reserve a trade name. However, this step is recommended to ensure that nobody else can register that name during the reservation period.

Texas LLC Certificate of Correction Fee

Cost: $15

After your Texas LLC application is approved, review all the details of the Certificate of Formation carefully.

If there are errors, like a misspelled business name or incorrect address, correct them as soon as possible by filing the Articles of Correction.

Texas LLC Amendment Fee

Cost: $25 to $150

A Texas LLC Amendment (Form 424), costs $150 for for-profit corporations and $25 for nonprofit corporations.

In Texas, if any of the following details about your LLC change, you need to file an amendment:

• LLC Name: if you change the official name of your LLC
  
• Address: if your business location moved to a new place
  
• Purpose: if you change the primary purpose of your LLC
  
• Management Structure: if you switch from member-managed to manager-managed or vice versa

Texas LLC Certificate of Status Fee

Cost: $15

A Certificate of Status is a document that verifies your LLC is in good standing with the state. It means you've met all requirements and paid any fees or taxes due. You might need this if your LLC is:

• Opening a bank account
  
• Applying for a loan
  
• Entering into business deals
  
• Registering in another state

You can request a Certificate of Status (sometimes called a Certificate of Good Standing) from the Texas Secretary of State's office. It costs $15 and you can do this online, by mail, or in person.

Texas LLC Certified Copy of Form Fee

Cost: $1 - $15

If you need a certified copy of any legal document, you can request this from the Secretary of State. A copy of the Certificate of Formation costs $15 per certificate.

Other legal documents, like a copy of a Certificate of Amendment you previously filed, cost $1 per page.

Texas LLC License and Permit Fees

You may have to set aside a budget for specific permits or licenses to operate in Texas. The cost of these permits varies, but some examples are:

• Sales tax permit: for LLCs selling products
  
• Health permit: for LLCs in the food business
  
• Building permit: for LLCs in the construction business

Always check with local Texas city or county offices and the state of Texas to know which licenses or permits your LLC needs.

DIY vs. Hiring Services

A DIY approach costs $300 for the Certificate of Formation. Then, you must pay for permits and licenses your LLC needs.

Alternatively, pay a Texas LLC formation service to do the work. Northwest Registered Agent charges $39 for an LLC formation package on top of the $300 state filing fee.

Other providers like ZenBusiness could charge as much as $349 for a premium package. These typically include annual registered agent services, an EIN, and an operating agreement.

Fortunately, LLC services like Bizee offer free basic packages. It prepares and files your LLC documents at no additional cost.

Is it Worth it to Form an LLC in Texas?

It could be worth it to form an LLC in Texas because of its favorable business environment.

It has no state income tax, low filing fees, and straightforward LLC regulations. It's an attractive option compared to states with higher taxes and more complex filing requirements.

Plus, forming an LLC in Texas provides liability protection, a benefit that sole proprietorships and partnerships don't have. It also has more flexibility in management than corporations.

Bottom Line

Before taking the plunge to establish an LLC in Texas, double-check all potential costs so you can plan your budget right.

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Wrapping up, you need at least $300 for a local LLC in Texas and $750 for a foreign one. While the starting fees seem minimal, optional and annual expenses can quickly add up to $3,000+.

However, knowing these costs upfront keeps surprises at bay. Since you've read everything up to this point, you're now one step closer to creating a well-budgeted and thriving business.

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