If you’re thinking of starting a limited liability company (LLC) in Texas, you’ll want to know in advance how much it’s going to cost. LLC formation fees vary by state, so it’s wise to do a bit of research and prepare yourself, and your new business, for the necessary steps.
LLC Costs in Texas
|Certificate of Formation||$300
|Certified Copy – Certificate of Formation||$15 plus $1 per page
|Certificate of Fact – Standing||$15
|Registered Agent Service||$50 – $300
|Operating Agreement||$0 – $2500
|Business Licenses and Renewals||varies – check with state and local government
Certificate of Formation Cost
In Texas, you form an LLC by filing a certificate of formation, which requires a $300 fee. It’s a simple process you can do online at the Texas Secretary of State’s website. You’ll need to create an account on the site and log in in order to file. If you file online, your LLC should be approved and formed within five to seven business days.
If you need a certified copy of the Certificate of Formation, there is a $15 fee plus $1 per page. If you need a Certificate of Fact-Status, there is a $15 fee. If you’d like the state to hold your LLC name before you register, you can apply online here for $40 to reserve it for 120 days. You’ll need to create an account on the site to reserve the name.
Registered Agent Cost
In Texas, you are required to have a registered agent, also known as an agent of service in process. A registered agent is a person or business authorized to accept and respond to legal, tax, and financial documents on behalf of your business.
In Texas, you can be your own registered agent, or it can be another member of the LLC. An individual who is not a member or a professional agency can also serve as the registered agent for your LLC.
Costs for a registered agent service range from $50 a year up to $300 or more. Several online firms, such as ZenBusiness and Northwest Registered Agent, provide quality services at reasonable rates.
Business Licenses and Permits Cost
Starting an LLC requires obtaining the required licenses and permits from local, state, and federal governments. Fees for these vary, but most costs are minimal.
Federal regulations, licenses, and permits associated with starting your business include doing business as, health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific permits.
You may also need state-level and local county or city-based licenses. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments to learn more.
Business license fees depend on the type of business and the agency issuing the license or permit. On average, business licenses cost between $100 and $300+, plus renewal fees.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package ($149 + state fees). They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
Operating Agreement Cost
In Texas, your LLC is not required to have an operating agreement in place. But it’s highly recommended, as an effective operating agreement can help avoid disputes and lawsuits that could threaten the stability of your LLC.
An LLC operating agreement is an important legal document that details who owns the business and provides essential information pertaining to member duties. An LLC operating agreement establishes the financial relationship between members and the basics of the working relationships between those members and the managers who oversee daily operations.
The operating agreement is not filed with the state, but instead remains private. It’s advisable to hire an attorney to ensure your operating agreement is thorough and legally binding.
Creating an operating agreement is free if you just draw it up yourself. Alternatively, you can pay around $100 for guidance from an online business advisory.
This is an extremely important document, so it’s recommended that you use the services of a specialist or legal firm. If you choose to hire an attorney to help you create this document, the price will be around $500 for a single-member LLC and $2,500 for a multi-member LLC.
LLC Formation Service Cost (Optional)
Forming an LLC in Texas tends to involve a lot of red tape and paperwork, so for many entrepreneurs just starting out it’s a good idea to hire an experienced service provider.
Some of the best services for forming an LLC are ZenBusiness and Northwest Registered Agent. LLC Formation service will take care of all the key steps, keeping you updated while allowing you to focus on launching and growing your business.
The cost of professional services depends on your requirements and LLC formation plan. Most LLC service providers offer different plans/packages and there are many LLC services that offer free LLC formation.
Ongoing Texas LLC Costs
Every state has a different fee structure and timelines for LLC documents and licenses. It’s important to stay up-to-date or your business could face significant penalties. The fees and timelines for Texas are detailed below.
Franchise Tax Reports
A franchise tax is not a tax on a franchise business. It is a fee that the state imposes on registered business entities for the right to operate. Texas charges varying tax rates for different types of businesses, and the tax charged is a percentage of the LLCs income. With your franchise tax report, you also file an information report, which is called an annual report in most states. There is no fee to file the information report.
Business License Renewal Fees
Some business licenses and permits must be renewed periodically, which may have a small associated fee. In Texas, a sales tax permit has no cost and renews automatically every year with no fee.
Other business-specific licenses and permits, such as permits for retail food establishments, must be renewed annually. You’ll need to check with the offices that issue your required licenses and permits, at both the state and local levels, for renewal requirements and fees.
It’s best to set calendar reminders for all your license renewals so that you stay in compliance with the law.