Form an LLC in Texas with Tailor Brands
Forming your LLC in Texas is now easy thanks to our trusted partner—Tailor Brands. Fast-track your LLC formation with their reliable business formation services. Benefit from their rich experience, which has helped over 500k businesses nationwide.
100% Free LLC Formation
Free LLC formation services in Texas and other states, with zero service charges.
End-to-end help with the process from document review to application filing.
Additional business services like LLC operating agreement drafting are paid.
What You Should Know Before Forming an LLC in Texas
Texas is one of the few states that levy a high filing fee for LLC formation. Like any state, starting an LLC in Texas has its benefits and disadvantages.
Still, if you’ve decided to do so, you should understand the key costs involved:
- To form an LLC in Texas, you need to submit an application with the Secretary of State, which requires a $300 filing fee. This is higher than the $100-$150 filing fee that most states charge.
- If you already have an LLC in another state and want to expand your business to Texas, you need to form a foreign LLC. This will require a one-time filing of $750, which is a bit costly.
- Though Texas LLCs are not required to file annual reports, they need to file a Public Information Report (PIR). It is a part of the annual franchise tax reports for the business and is filed annually.
- Some other business costs may include $25 to appoint a statutory agent or registered agent and $40 for name reservation. Expedited filing is also available at an extra cost of $25.
Considering these are one-time costs, these should not deter you from starting an LLC in Texas. Moreover, LLCs are cheaper to run in the long run and have several other benefits, which we’ll discuss later.
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Steps to Form an LLC in Texas
If you’re considering forming an LLC in Texas, it’s important to understand the specific requirements and steps to follow. This section gives you a step-by-step overview of the process.
Read on to learn the 8 easy steps to form an LLC in Texas.
Pick a Name for Your LLC in Texas
The first step in forming your LLC in Texas is to pick a unique business name. If you have already come up with a name, you can check if it is available by contacting the Texas Secretary of State or by visiting the SOSDDirect website.
Your chosen business name should follow the state’s guidelines and should not have any misleading words. It should ideally be short, easy to remember, and easy to spell. This will make it easier for customers to remember your brand name and find it online.
Reserve the Business Name
While it is not mandatory to reserve the name for your LLC in Texas, doing so can give you peace of mind. Reservation is important if it is a special name, such as a family name, or if you are not planning to start the business immediately.
If the name is available, you can file an application for “company name reservation” (Form 501) at SOSDirect, which takes one week to process. You will also need to pay a filing fee of $40 and your name will be reserved for 120 days.
Pick a Registered Agent
Whether you are forming your LLC in Texas or are incorporated in another state and wish to operate in Texas, you must be represented by a registered agent. A registered agent receives legal documents on the behalf of the business.
A registered agent could be an individual or an organization. They should be available at the registered address at all times during regular business hours on working days. This is probably why most entrepreneurs choose to hire professionals for this.
File The Texas Certificate of Formation
The next step to take in the process of forming your LLC in Texas is to submit the “Certificate of Formation,” also known as “Articles of Organization” in other states. To do this, you will need to fill out and submit Form 205 by paying a filing fee.
If your business is established in another state, you will need to file the form meant for a foreign LLC. The filing fee for forming a domestic LLC in Texas is $300. However, if you want to form a foreign LLC in Texas, it will cost you $750 in filing fees.
Draft the Operating Agreement
While Texas does not require an LLC operating agreement, it is highly recommended to create one to ensure efficient business operations. The agreement helps clarify each member’s responsibilities and reduces the risk of disputes.
The agreement should contain details like the LLC’s offerings and the procedures to be adopted for dissolution, voting, and so on. Tailor Brands handles the drafting of your Texas LLC operating agreement if you opt for any of its paid plans.
Obtain an Employer Identification Number
Also known as Tax ID, the Employer Identification Number (EIN) is a nine-digit number the IRS assigns for tax purposes. Every LLC in Texas needs an EIN if it has several members, and wants to hire employees or open a business bank account.
The EIN is also required to file taxes and apply for loans. While there are different ways of applying for the EIN, the easiest and quickest way is to let Tailor Brands submit Form SS-4 with the Internal Revenue Service on your behalf.
Obtain Business Permits and Licenses
Depending on the nature of your business or the industry, you may need to obtain additional licenses and permits to run an LLC in Texas. The state has published a guide listing 300+ business types that need specific permits and licenses.
If you are unsure of what licenses and permits apply to your Texas limited liability company, you can contact Tailor Brands. Their team of experts will provide consultation to help guide you on all your business licensing requirements.
Open Your Business Bank Account
Having a business bank account for your LLC in Texas will help separate your personal finances from your business’s. To open a business bank account, you need to submit your LLC formation documents and EIN to the bank.
Tailor Brands can help you find the best banking options for your business and open a business checking account. This is an additional service that’s available at an extra cost and is not a part of any of the company’s free or paid plans.
File Business Taxes
Once you receive your EIN and Certificate of Formation, your business is officially a legal business entity and can start operating in Texas. However, to remain in good standing with the state and the IRS, LLC owners need to file taxes on time.
LLCs in Texas need not pay state income tax, but must pay the federal income tax and franchise tax on their net profit. LLCs also need to pay self-employment tax and sales tax, while its members need to file self-employment taxes.
Why Should You Outsource LLC Formation?
Forming an LLC in Texas is no walk in the park. By outsourcing the process to professionals, you can save time and effort. Here are some reasons why you should outsource.
Convenience
As mentioned earlier, outsourcing the Texas LLC formation process is convenient for you. Why deal with tons of paperwork when professionals can do it better, faster, and more accurately?
Accuracy
Even if you don’t mind the hassle, there’s a high chance that you might make a simple mistake that gets your application rejected. By outsourcing you eliminate the chances of errors.
Speed
Filing a Texas LLC application requires you to review and prepare many legal documents. Doing this yourself could be a tedious and time-consuming process, but outsourcing will speed things up.
Benefits of Forming an LLC in Texas
Limited liability companies offer many advantages over other business entities as they offer the best features of different entities.
Here are some reasons why you should consider forming an LLC in Texas.
Limited Liability Protection for Members
The most obvious advantage of forming an LLC in Texas is that it protects you and other members from personal liability. If the business fails to repay its debts, then only business assets can be seized, your personal assets will remain safe.
You and other LLC members will not be required to pay off the company’s debts using your personal assets or finances. Also, in case the business is sued, you will be offered liability protection, unless you were personally involved in the case.
Tax Flexibility
Another benefit of starting an LLC in Texas is that you can choose how you want the business to be taxed. A single-member LLC will be treated as a pass-through entity and will not be required to pay corporate taxes of any sort.
However, a multi-member LLC has more options. It can be taxed as an S-corp or C-corp for tax purposes if that’s more beneficial to you. Alternatively, you can opt for the default pass-through taxation option if that offers more tax benefits.
Comparatively More Affordable to Form and Run
While Texas is one of the states that charges a steep fee for LLC formation, it’s still cheaper to form and run an LLC than manage a corporation. The one-time state filing fee for both a Texas LLC and a Texas Corporation is $300.
However, in the long run, managing a corporation is more expensive because of the numerous formalities associated with corporations. From holding shareholder meetings to keeping immaculate records, there are a lot of formalities that cost extra.
Requires Less Paperwork
Forming an LLC in Texas is a relatively straightforward process with less paperwork than what’s required for forming a corporation. The number of steps required is fewer and you just need to file an online application and provide the required documents.
Corporations not only are more difficult to form but also have strict legal requirements for day-to-day operations. They need to keep detailed records and minutes of meetings, which leads to more paperwork than what’s required to run an LLC.
Easier to Run
Limited liability companies in Texas or anywhere else have few compliance requirements and have complete management control. LLC members come together to discuss how they want to run their business and lay down the rules in an operating agreement.
There are no external guidelines or strict management rules. LLC members have complete control over their business and how the day-to-day operations will be managed. They can even hire managers or choose to do it themselves.
More Ownership Flexibility
LLCs offer a lot of flexibility in who can be a member. Both organizations and individuals can be LLC members, with very few restrictions and exceptions. Only certain types of financial institutions are prohibited from being members of an LLC in Texas.
This is unlike other business entities, such as S-corporations, which can have only 100 shareholders, who can’t be non-resident aliens. A multi-member LLC in Texas can have as many members as needed, as there’s no upper limit or restrictions.
The Legal Right to Hold Business Assets
An LLC in Texas is a legal business entity that’s separate from its members. As such, this allows LLCs certain legal rights and the ability to acquire business assets is one of them. A Texas LLC can buy assets in the name of the business.
This means that members don’t need to hold business assets like equipment and real estate in their names. This affords a level of protection to LLC members as they can remain completely separate from business deals and contracts.
Right to Enter into Business Contracts
This is in line with the previous point. Being a legal entity also allows Texas LLCs to enter into legal business contracts with vendors, customers, or other stakeholders, without getting the members involved. This adds further liability protection.
In case the business fails to meet the terms of a legal contract, only the company will be held liable and its members will be protected. Similarly, if the business faces a lawsuit, the LLC members will not be held personally liable and will remain safe.
Why Choose Tailor Brands for Texas LLC Formation
Tailor Brands has helped set up 500k+ business entities and can help you launch a business as well. Here’s why you should choose Tailor Brands to form an LLC in Texas.
Hassle-Free
You don’t need to deal with the hassle of filling out forms and submitting documents as Tailor Brands’ team of experts will do it for you. They’ll take care of the tedious tasks while you focus on growing your business.
Error-Free
Tailor Brands has a team of professionals who deal with LLC formation applications as part of their daily tasks. They specialize in it and can handle all aspects of filing your LLC’s Articles of Organization with the Texas Secretary of State.
Cost-Free
The Texas LLC formation application process is a free service offered by Tailor Brands. It doesn’t cost a dime and you only need to pay the state’s filing fees. This saves you money when forming an LLC in Texas.
Tailor Brands’ Pricing Plans for Texas LLC Formation
Tailor Brands offers many business services, other than basic LLC formation. It offers both free and paid plans and add-on services that are not a part of any plan.
Here’s what you’ll get with its free and paid plans.
Lite
This is the most basic plan that Tailor Brands offers and it includes LLC formation and nothing else.
Here’s what you’ll get with Tailor Brands’ free plan:
- LLC formation: The team at Tailor Brands will help you with the entire LLC formation process end-to-end. From preparing documents to filling out the application, they will do everything. You just need to provide all the information and the necessary documentation for the application filing process.
Price: Free
This is the best option for anyone looking for a no-fuss, cost-free LLC application filing service. It has no bells and whistles, but it will help you form an LLC in Texas without hassle.
Essential
Apart from LLC formation, this paid plan includes several other services and perks. Here are the details:
- Annual compliance: When running an LLC in Texas, you need to meet several ongoing compliance requirements, such as filing annual reports and paying taxes on time. These have strict deadlines and failing to meet them could cause severe penalties. Tailor Brands’ team will remind you of these and send annual compliance notices to ensure you never miss a deadline.
- 2-5 day processing: Another key feature of this plan is that you get expedited application processing. Customers on this plan can enjoy fast processing times of 2-5 business days. This is a significant advantage because the normal processing times could be high due to the sheer number of applications in the queue. This will ensure your Texas LLC is up and running as soon as possible.
- LLC operating agreement: With this plan, you’ll also get help preparing a comprehensive operating agreement for your LLC in Texas. Their team will help you with the drafting process and will ensure you include all important elements. This includes all rules and guidelines related to decision-making within the company, member roles and responsibilities, and more.
- $30 Amazon gift card: One of the perks of choosing this paid plan is that you’ll get an Amazon gift card for $30. Though this is a small amount to impact your decision, when combined with other benefits it makes this plan worth the money. You can spend this to buy practically anything from Amazon, whether business-related or otherwise. It’s an extra benefit that sweetens the deal.
Price: $199 per year
Elite
The Elite plan offers many other business services and benefits, apart from what you get with the Essential plan.
Here are the additional services you can expect.
- Website domain: To run a successful business in today’s digital world, you need a website. Tailor Brands can help you acquire a domain name that matches your business name, which is essential for starting a business website.
- DIY website builder: Next, you also get access to tools to build a business website yourself. These are easy to use and don’t require technical expertise, so you don’t need to hire a developer to build a website as you can do it yourself.
- Business tools: Tailor Brands offers a whole suite of business tools and services with this top-tier plan. Whether you want to design a business logo or create a digital business card, Tailor Brand will assist you in various ways.
- $50 Amazon Gift Card: This is a complimentary gift that just acts as an additional perk to opt for this plan. You can use this gift card to buy anything from Amazon for the said amount, which can be a business-related product or not.
Price: $249 per year
Additional Services
In addition to the free and paid plans, Tailor Brands offers numerous add-on services for an extra cost.
Here are some of the many services you can get with Tailor Brands.
- Business Licenses: You will likely need multiple licenses and permits to conduct business in Texas. Tailor Brands can help you find out the requirements for your specific business and get the necessary licenses quickly.
- Employer Identification Number: Every business should have an EIN as it has numerous use cases and benefits. Tailor Brands can help you with the application process and get you an EIN as quickly as possible.
- Business Bank Account: If you need help finding the best banks for your business, then the team at Tailor Brands can help you. They will not only give you great options but also help you start a business checking account.
- Business Insurance: Getting your business insured is a prudent decision as it can protect your business from various unforeseen circumstances. Tailor Brands helps businesses get all necessary types of insurance policies.
- Tax and Accounting Services: The company offers tax and accounting services for businesses, such as tax filing and general accounting consultation. They have a team of experts who can help you with all your queries.
- Invoicing and Bookkeeping: Lastly, you can also benefit from their bookkeeping services. You will get access to a bookkeeper who will manage your books, handle client invoicing, and take care of other related tasks.
Price: Custom
FAQ
To form an LLC in Texas, you need to file Articles of Organization with the Secretary of State and pay a filing fee that starts at $300. Additionally, you may be required to pay an annual franchise tax fee and hire a Texas registered agent.
Registered agent services can cost between $249 to $300 per year. If you need a Certificate of Good Standing that shows your business is compliant with state requirements, you may need to pay an additional fee of $15. In addition, you may need to obtain state/federal business licenses and permits that cost anywhere from $30 to over $200.
Many business formation services charge a processing fee of $79. So, adding up these costs, the cost of LLC in Texas can come up to $680 to $1000.
Tailor Brands offers free LLC formation services, so that’s one area where you can save some money.
Absolutely. A limited liability company provides several benefits for an individual or business entity in Texas, including limited liability protection, tax flexibility, less documentation, and the potential for significant cost savings.
Forming an LLC in Texas is also relatively fast and straightforward. The state has an online filing system that allows business owners to quickly and easily file the necessary paperwork to form their LLC.
What’s more, Texas also has a wide pool of talent and is known for minimal government regulations. This makes it easier and more cost-effective to start an LLC in Texas.
Ultimately, an LLC in Texas can be a great way to protect yourself and your assets while taking advantage of the strong business environment in Texas.
The first step is to choose a name for your limited liability company and make sure it meets all of the requirements set by the state. Next, you need to file and obtain the Texas LLC certificate from the Secretary of State and pay all applicable fees.
Create an LLC Operating Agreement and apply for EIN as well as other business permits and licenses. Tailor Brands makes it easy for you to get started and guides you through each step so that your LLC is quickly registered in Texas.
To create an LLC in Texas, you will need to file a Certificate of Formation with the Texas Secretary of State. This document must include your LLC’s name, purpose and duration, registered agent information, and the names and addresses of all members.
You can get the LLC application form (Form 205) on the Secretary of State’s website. You will also need to create an LLC operating agreement, obtain an EIN, and open a business bank account.
Additionally, you’ll need to obtain licenses or permits from other state agencies to operate your business legally.
However, a quicker way of forming an LLC in Texas is to use Tailor Brands’ free business formation services.
Their team will fill out and submit your LLC application form Their expert advisors are available to provide guidance and answers throughout the process.
Leverage Tailor Brands’ LLC formation services to start your business. Its team of experts will handle the entire process from start to finish.
It is possible to form an LLC in Texas typically within 5 to 7 business days. However, the time taken can vary based on the process you follow, the method of filing, and whether you opt for expedited or standard filing.
With Tailor Brands, the process of getting an LLC in Texas is fast and easy as they handle all the paperwork.
Create an LLC in Texas With Tailor Brands
Our trusted partner, Tailor Brands, has decades of experience in the field in addition to industry-leading expertise in LLC formation to help you save time and money.
A perfect solution for those who want to quickly create an LLC in Texas.
$0 + State Filing Fees