When you form your LLC in Texas, you’ll have to pay certain costs to officially register your business with the state.
In addition to formation and ongoing costs, there will be business expenses like using a registered agent service, building a website, getting business insurance, and so on. So, how much does an LLC cost in Texas?
In this guide, we break down the costs associated with forming your LLC, from the Texas LLC filing fee to LLC upkeep prices and other business expenses.
Cost of Forming an LLC in Texas
When forming your LLC, there are a few different costs that you may incur. These include the filing fee, LLC formation service cost, operating agreement draft, and registered agent costs.
Texas LLC Filing Fee
To form an LLC, you must file a Certificate of Formation with the Secretary of State. The filing fee for the Certificate of Formation is $300. You will commonly see this fee referred to as the “state fee” or “filing fee.”
If you choose to use an LLC formation service, you will pay the $300 state fee on top of their service fee. Generally, these service fees start around $29 and increase depending on additional services you purchase.
Most people choose to use an LLC formation service to create their LLC. The cost is low and they guarantee that your filing is done correctly. Check out our #1 rated LLC service:
For more details on the formation process, check out our Texas LLC Formation guide.
Texas Registered Agent and Registered Office
Every Texas LLC is required to appoint a registered agent. A registered agent is a person or entity you assign to receive tax forms, legal documents, or government correspondence on your LLC’s behalf. Registered agent services can cost around $130 per year or more.
Your registered agent can be:
- A registered agent service (most common)
- Yourself (not recommended)
- Another member of the LLC
- A business attorney
If you haven’t yet formed your LLC, we recommend using Northwest Registered Agent to form, as you will receive one year of registered agent services for free with a $29 formation.
Texas LLC Operating Agreement
An operating agreement defines the roles and responsibilities of the members or managers in your LLC and will help prevent and solve any business disputes that may arise later on.
The costs associated with the operating agreement come in the drafting of the document. For single member LLCs and simple multi-member LLCs, most people choose to create the document themselves.
You don’t need to file this document with the Texas Secretary of State. Using a free operating agreement template or document builder, that means your total cost would be $0.
Optional Texas LLC Formation Costs
Along with the fees associated with forming an LLC, there are several optional LLC formation costs that you may encounter.
- Reserve a Name for your LLC – Before registering your Texas business name, you must first check to ensure it’s unique by doing a business entity name search. The name reservation fee of $40 is only necessary if you aren’t forming right now, but still want to reserve the name.
- DBA (doing business as) Name – If you want to operate your business under a different name than your LLC’s, you will need to file a DBA. The filing fee for a DBA is $25.
- Expedite Texas LLC Filing – Texas offers expedited filing of your Certificate of Formation for an additional $25 fee per document.
- Certified Document Copies – Getting certified copies of your Texas business documents that are already on file with the state validate that the documents are true and correct. The fee for requesting a certified copy is $30.
- Certificate of Status – A certificate of status verifies that your business is properly registered and legally authorized to conduct business with the state. It is often required by banks and other lenders. The fee for requesting a certificate of status is $15.
Texas LLC Cost and Fees Over Time
There are a few things you need to address to keep your LLC in good standing with the state year after year. Each of these comes with costs and fees.
Annual LLC Fee Texas
Each year, your Texas LLC must submit a Public Information Report and file for Texas Franchise Taxes. The tax rate for your Texas Franchise Tax Public Information Report depends on your business’ total revenue or the type of business that you own. The service fee for filing this report is $1.
This franchise tax public information report is due by May 15th each year and is required for all Texas LLCs.
LLCs that generate less than $1.3 million per annum in revenue are not required to pay franchise tax. See our Texas LLC Annual Report article for a more in-depth overview.
Registered Agent Fee
If you use a professional registered agent service, you will pay their fee annually. Pricing will depend on the service provider that you use, but usually costs around $130/year. Using a registered agent service will save you time and the hassle of handling important legal documents and filings for the long term.
If you act as your own registered agent there are no maintenance fees. However, for privacy and compliance purposes, we don’t recommend being your own registered agent.
We recommend Northwest Registered Agent, which offers a year of its registered agent service for free when you use the company to form your LLC ($29 + state fees).
General Costs of Running a Business
Operating a business will obviously come with more than just LLC costs. These are a few of the expenses that you may run into.
Business Bank Account
An LLC separates your personal assets from your business assets. This separation is called the corporate veil. That corporate veil ensures that if your business is sued or incurs debts, your personal assets will be protected from any liabilities.
Commingling (mixing) your personal bank account with your business can pierce your LLC’s corporate veil, which means you are no longer protected by the separated entity of your LLC.
Using a separate bank account to accept payments and pay business expenses is the only way to prevent commingling funds and piercing the corporate veil.
Recommended article: Check out TRUiC’s Best Small Business Banks guide to find the best bank account for your business.
Business Permits and Licenses
Depending on the type of business you operate, your business may need the proper permits and licenses to legally operate in Texas.
Alongside the permits required, your business may require industry-specific licenses to operate legally. Examples include licenses like the Texas real estate license, the Texas insurance license, the Texas adjuster license, and so on.
See TRUiC’s How to Get a Business License in Texas article for more information.
Every business needs a website. There’s no better way to get in front of your customers, build your brand, and grow your business.
Fortunately, the cost and difficulty of creating a business website have come down over the years. Websites are now simple to build and cheap to keep up.
We advise small business owners to use the GoDaddy Website Builder. It’s an extremely simple to use system, creates great business websites, and only costs about $15/month.
Having the proper insurance coverage can potentially save your entire business if there is a loss, accident, or lawsuit.
A few of the most common business insurance policies include:
- General liability insurance – Protects against claims of personal injury, physical injury, property damage, and more. This is the most common of all business insurance policies. Learn more about general liability insurance.
- Professional Liability Insurance – Protects against claims of inaccurate or negligent work. It’s most common in the “professional” space where businesses offer services or advice to other businesses or consumers. Learn more about professional liability insurance.
- Commercial Workers’ Compensation Insurance – This type of insurance protects your employees from on-the-job injuries or illnesses. This coverage is required if you have one or more employees. Learn more about Workers’ Compensation insurance.
The cost of business insurance varies widely based on business type, size, location, and other factors. Getting a quote is the only way to understand the actual cost of insurance for your LLC.
We recommend NEXT Insurance to help protect and grow your Texas LLC. It features instant coverage with competitive pricing that’s tailored to fit your business’ needs.
LLC Cost in Texas FAQ
Do you have to pay ongoing fees for an LLC every year?
Texas requires LLCs to pay the Annual Franchise Tax and Public Information Report fees. Determine and pay the fees at the Texas Comptroller of Public Accounts’ website.
What’s the cheapest way to form an LLC?
Can you start a Texas LLC for free?
No. All applicants must pay the state filing fee to start a Texas LLC. The filing fee is $300.
How much does a registered agent cost?
Do I need to pay a franchise tax for my Texas LLC?
Yes. The tax rate for your Texas Franchise Tax Public Information Report is attributed to your business’ total earnings or the type of business that you have. The service fee for filing the report is $1 via the Texas Comptroller of Public Accounts’ website.
How much does an LLC formation service provider cost?
It depends on the LLC formation company you choose. We recommend Northwest Registered Agent, which starts at $29, plus the $300 state fee, and includes the first year of registered agent services for free.