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Forming a Texas LLC

Do you want to form a limited liability company (LLC) in the state of Texas? LLCs are an incredibly popular business entity type these days, and there are a few different ways to form one.

You can form an LLC on your own using the DIY method, but that can be quite a bit of hassle, especially if you’ve never done it before. You can hire an attorney to form your LLC, but this option can cost thousands of dollars that many startups don’t have.

This leaves the third option, which is to hire an online LLC service. There are many reliable LLC services available online, but for Texas, there are four that stand out from the pack. Let’s discuss which online business formation service is the right choice for you.

What Is a Texas LLC?

First off, let’s quickly outline what an LLC is. LLCs are formal legal entities that are typically taxed similarly to sole proprietorships and general partnerships, in that the owners include any company profits or losses into their personal returns — the LLC itself does not owe income taxes. An LLC may also elect to be taxed like a corporation, although this is not a very common option.

There are similarities to corporations too, especially when it comes to financial responsibilities. In an LLC, the owners or members are not usually personally accountable for the financial status of the business. This means that if someone sues your LLC, your personal assets are not at risk.

One unfortunate aspect of Texas LLCs is that they’re expensive to form. In fact, at $300, the Texas LLC formation fee is one of the highest such fees in the nation. Considering the fact that some states will form your LLC for around $50, it’s clear that Texas charges a premium price point for LLC creation.

However, Texas can save you money as an LLC owner as well, thanks to this state’s lack of personal income tax, and they don’t have a corporate income tax either. This means that whether you use the default pass-through taxation method or opt for corporation-style taxes, you can save a tremendous amount of money compared to operating an LLC in most other states.

Finally, Texas allows entrepreneurs to form series LLCs. In fact, we have an entire guide on how to form a Texas series LLC. The series LLC is a group of LLCs that fall under the umbrella of one parent LLC. The big advantage of series LLCs is that each LLC in the series is shielded from the liability of each other LLC, and you only need to form one entity instead of several separate LLCs or a corporation with subsidiaries.

The 4 Best Services for Forming a Texas LLC

1) ZenBusiness
2) IncFile
3) Northwest Registered Agent
4) LegalZoom

In Conclusion

There are several great companies that we recommend for LLC formations in the state of Texas. ZenBusiness has the most well-rounded service available, while Northwest Registered Agent has the best customer support. IncFile will form your Texas LLC for free, and LegalZoom has the experience edge. And, of course, both ZenBusiness and IncFile are based in Texas, while LegalZoom has a major satellite office in this state.

We hope this guide helped you hone in on which company is the right choice to form your Texas limited liability company!

Frequently Asked Questions

Where Can I Get More Information About Forming LLCs in Texas?

We invite you to take a look at our comprehensive guide to forming a limited liability company in Texas. This article walks you through the LLC formation process in this state step by step, ensuring that you don’t miss any crucial elements.

How Can I Search the Texas Business Name Database?

One of the most important steps in forming a Texas LLC is choosing a business name. Once you come up with ideas for your name, you should search through the state’s Taxable Entity Search to make sure your desired name is available. For more information on conducting a business name search in Texas, check out our full article on the topic.

Where Can I Find the Texas Certificate of Formation?

You can file your Certificate of Formation online through the Texas Secretary of State’s SOSDirect system, or you can print off the paper form which can be filed by mail, fax, or in-person.

What Are the Ongoing LLC Maintenance Requirements in Texas?

All LLCs operating in the state of Texas are subject to an annual franchise tax, which ranges from 0.375% to 0.75%. However, Texas LLCs are not required to file a traditional annual report like they are in most other states.

Where Can I Get Information on Licensing for My Texas LLC?

To find out which permits and licenses are applicable to your business, head on over to the Texas Department of Licensing and Regulation site, where you can find extensive information about licensing requirements in this state.

How Quickly Can Texas Process My LLC Formation?

According to the Texas Secretary of State, the typical filing time for an LLC formation is 5-7 business days. If you’re in a hurry, you can expedite your filing for just $25, which speeds up the turnaround time to just one business day.