How Much Does It Cost to Start an LLC in Texas?

Texas is one of the best states to start a business — no state income tax, a massive economy, and straightforward LLC formation. But “straightforward” still involves fees, and the total cost surprises people who only budget for the filing fee. Here’s the complete, honest breakdown of what starting a Texas LLC actually costs in 2026.

How Much Does It Cost to Start an LLC in Texas? The Mandatory Costs

State filing fee: $300. This is the big one — Texas charges $300 to file the Certificate of Formation (Form 205) with the Secretary of State, among the highest LLC filing fees in the country (compare: $50 in Colorado, $125 in Florida). It’s non-refundable, so get the paperwork right the first time. File online through the Texas Secretary of State’s website (SOSDirect) for the fastest processing — typically 2–3 business days online versus 7–10 by mail, plus a small convenience fee.

Registered agent: $0–$150/year. Texas requires every LLC to have a registered agent with a physical Texas address. You can be your own agent for free — but your name and address become public record, and you must be available during business hours to receive legal documents. Most owners use a commercial registered agent service ($100–$150/year) for privacy and reliability. It’s the one recurring cost worth paying.

Minimum realistic total: $300–$450 for the first year (filing fee + optional registered agent). That’s it for the legal formation itself.

The Optional (but Smart) Costs

• Operating agreement: $0–$200. Texas doesn’t legally require one, but every business attorney will tell you to have one — it defines ownership, profit splits, and what happens if a partner leaves. Free templates work for single-member LLCs; multi-member LLCs should consider an attorney-drafted version ($150–$500).
• EIN (Employer Identification Number): $0. Free from the IRS at irs.gov — never pay a service for this. You need it to open a business bank account and hire employees.
• Business licenses/permits: $0–$500+. Texas has no general state business license, but cities, counties, and industries do. A food business needs health permits; contractors need trade licenses. Check your city and county requirements — this is the cost people most often forget.
• DBA (assumed name): ~$25. If you’ll operate under a name different from your LLC’s legal name, file an Assumed Name Certificate with the county clerk.
• Attorney review: $200–$500. Optional for simple single-member LLCs; advisable for partnerships or complex ownership.

The Small Business Administration has free Texas-specific startup guides that walk through these requirements without the upsell.

Texas LLC Taxes: The Franchise Tax Question

Texas has no personal income tax, but LLCs face the franchise tax — and here’s the good news most new owners miss: the “no tax due” threshold means LLCs with under ~$2.47 million in annual revenue owe $0 (though you still file the informational report). For the vast majority of new LLCs, the franchise tax is a paperwork formality, not a bill. Don’t let it scare you — but don’t ignore the annual filing either; penalties for skipping it are real.

LLC vs. Sole Proprietorship: Is the $300 Worth It?

A sole proprietorship costs $0 to start — so why pay $300? Liability protection: an LLC separates your personal assets (house, savings, car) from business debts and lawsuits. If you’re freelancing from a laptop with minimal risk, a sole proprietorship might suffice initially. If you have partners, employees, physical premises, or any meaningful liability exposure, the LLC is cheap insurance. Our detailed comparison of LLC vs. sole proprietorship walks through the decision with real scenarios. And if you’re still choosing a name, read how to register a business name in your state first — name availability affects everything downstream.

Timeline: How Long Does It Take?

Online filing: 2–3 business days for approval. Mail: 7–10 business days. Expedited service is available for an extra fee if you’re in a rush. After approval: get your EIN (immediate online), open a business bank account (same week), and handle licenses. Realistic total: legally formed within a week, fully operational within two. Don’t pay formation services $500+ for “rush filing” — the state’s own online system is already fast.

Common Texas LLC Mistakes to Avoid

Filing as a corporation by accident: the SOS site offers multiple entity types — make sure you select the domestic LLC Certificate of Formation (Form 205), not corporate forms. Skipping the operating agreement because “it’s just me” — then taking on a partner later with nothing in writing. Forgetting the franchise tax report: even when you owe $0, the annual filing is mandatory; penalties and forfeiture follow skipped filings. Using your home address as the registered agent address to save $100/year — your address becomes permanently public, and process servers show up at your door. Commingling funds from day one — open that business bank account immediately (see our business bank account guide); the LLC’s liability protection depends on treating it as separate.

After Formation: The First-Month Checklist

Formation is step one. Month one: get your EIN from the IRS (free, 10 minutes online), open a business bank account (bring your approved Certificate of Formation and EIN), obtain necessary local permits and licenses, set up basic bookkeeping (even a spreadsheet beats nothing — see our free accounting software picks), and check whether you need business insurance (general liability starts around $30–$60/month and many clients/contracts require it). Also consider trademarking your business name if brand matters — our trademark guide covers the process and costs. None of this is glamorous; all of it prevents expensive problems later.

Texas vs. Other States: Is Texas Actually Cheap?

Texas’s $300 filing fee is on the high side nationally — but the total cost of doing business is what matters. No state income tax saves Texas business owners thousands annually compared to states like California. No annual LLC report fee (just the $0 franchise tax filing for most small LLCs) beats states charging $100–$800 yearly. Formation is a one-time cost; taxes are forever. By that measure, Texas is among the cheapest states to operate in — the $300 upfront is quickly forgotten, the $0 income tax never is.

The Bottom Line

Budget $300 for the state filing fee plus $0–$150/year for a registered agent — $300–$450 all-in for year one. Add an operating agreement (free template is fine solo), a free EIN, and whatever local permits your industry needs. Skip the overpriced formation middlemen; file directly with the Texas Secretary of State online and keep the extra $200 for actually running your business.