How Much Does an LLC Cost in Texas
Forming an LLC in Texas costs $300 for a domestic LLC and $750 for a foreign LLC. But what are other costs to consider? Read on.
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Here are the following fees to consider:
- Certificate of Formation Fees: $300 to $750
- Texas Sales Tax Permit: FREE
- Franchise Tax: 0.331 - 0.75%; $1-$1,000 (annual statement)
- Optional Fees: $0 to $3,000+
The total cost of setting up an LLC in Texas can be grouped into three main categories:
- One-time fees for registering the company
- Annual fees for maintaining the LLC
- Optional or add-on fees
The fee for a Certificate of Formation is the only one-time fee you need to consider. Annual fees, on the other hand, include the Franchise Tax and Franchise Tax Statement fees.
And depending on other services you may need, add-ons can include the costs for an operating agreement, registered agents, and reservation fees.
Keep reading for the full breakdown.
Texas Certificate of Formation Fees: $300 - $750
The Certificate of Formation fee is often referred to as the basic cost of forming an LLC in Texas. It's a legal fee that is payable to the Texas Secretary of State.
The cost of a Certificate of Formation is different for domestic and foreign LLC registrations:[1]
- Texas Domestic Certificate of Formation Fee: $300
A domestic LLC is a business that is formed within its home. In other words, you are registering an LLC in Texas, where your business was originally formed. - Texas Foreign Application for Registration Fee: $750
A foreign LLC conducts business in a different state from where it was first created. This includes companies from outside the U.S. that want to start an LLC in the country.
There are no other fees due to the state. Just take note that if you pay the Certificate of Formation using a credit card, there is a 2.7% convenience fee.[2]
Business Formation Service - $39 + State Fees
- Form Your LLC, Corporation, or Nonprofit Today
- A Fully-Formed Business
- Registered Agent Service
- Business Address
- Mail Forwarding
- Privacy by Default
There is no way to register an LLC in Texas for free. However, veterans forming an LLC in Texas don't have to pay the $300 LLC filing fee. The LLC needs to be 100% owned by a veteran/veterans honorably discharged from a branch of the U.S. Armed Services.[3]
Texas Sales Tax Permit: $0
All LLCs operating in Texas need a Texas Sales Tax Permit. And applying for one is FREE.[4]
You need this sales tax permit to legally collect tax from your customers, which you then forward to the state. You can get a new permit through the Texas Comptroller's official website. It automatically renews every year.
Texas Annual Franchise Tax Statement Fee: 0.331 - 0.75%
There are no annual registration fees for LLCs in Texas. However, you may need to file an annual franchise tax statement with the Texas Comptroller.
All businesses in Texas that exceed the annual tax threshold of >$1,180,000 are required to pay the franchise tax. The tax rate range in Texas is 0.331% - 0.75%.[5]
There is no filing fee for a franchise tax report. But there is a $1 service fee for online payments.
Note that regardless of revenue, all businesses in Texas must submit an Annual Franchise Tax Statement. You'll be charged a $50 fine if you file your report after the due date. This applies to all LLCs, even if you don't owe any taxes with the report.[6]
Businesses might expect to pay anywhere from $200 to $1,000 or more to have an accountant prepare and file a franchise tax statement in Texas.
However, it's not mandatory to use an accountant. If you are the LLC owner or member, you can prepare and file the statement. Just make sure it's accurate and compliant with the state regulations.
Optional Fees for LLCs in Texas
Your Texas LLC might never need to pay for the add-ons below. However, it's a good idea to set aside a budget just in case.
Here's a summary of the add-ons and their pricing:[1]
| Add-ons | Fee |
|---|---|
| LLC Operating Agreement | $0-$2,500 |
| Registered Agent | $50-$300 |
| Expedited Processing | $25 |
| Certificate of Status | $15 |
| Texas LLC Amendment | $25-$150 |
| Certificate of Correction | $15 |
| Trade Name Registration | $25 |
| Application for Reservation | $40 |
| Renewal of Reservation | $40 |
| Certified Copy of Form | $1-$15 |
| Licenses and Permits | Varies |
Texas LLC Operating Agreement Fee: $0 - $2,500
Forming an LLC in Texas does not require an LLC Operating Agreement. However, it is recommended to have one.
You can create an LLC Operating Agreement using free templates online. If you hire a lawyer to draft a basic LLC Operating Agreement, expect to pay around $500 or more.
An LLC Operating Agreement is designed to help reduce the risk of culture conflict. It helps avoid disputes about ownership shares and business policies.
Texas Registered Agent Fee: $50 - $300
All LLCs in Texas need a registered agent to receive documents on behalf of the LLC. You don't have to pay for a registered agent, but you need someone who has a physical address in the state of Texas.
So, that means you can be your LLC's own registered agent. Employees, partners, or trusted friends can also receive your LLC's documents as long as they live in Texas.
The best registered agents in Texas, however, charge around $50 to $300 per year. The price depends on the agent and the services they provide. Some offer basic services, while others provide extra features and support. Always shop around and compare to find the best fit for your needs.
Registered Agent Service - $125/year
- Business address included
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Registered Agent - $249/Year
- Includes unlimited cloud storage for your business documents
- Includes a Compliance Calendar (valued at $69) for critical tax and annual report deadlines
- Renews automatically each year. Renewal rate is subject to change.
- Cancel your service plan online or by calling (877) 808-8977
Registered Agent - $199/Year
- Get a registered agent for LLCs and corporations
- Available in 50 states
- Get notifications via mail of important legal notices
- Find important documents scanned and uploaded to your dashboard
You can change your registered agent for your LLC in Texas. Just fill out the Change of Registered Agent/Office form (Form 401). This costs $15.[7] You then submit it to the Texas Secretary of State.
Texas LLC Expedited Processing Fee: $10 - $25
The Secretary of State will review your application to form an LLC in Texas. This can take up to 72 business days if sent by mail or fax and within 10-15 days if submitted online.[8]
If you need to speed up the process, you will have to pay an additional $25 for expedited processing. Your Certificate of Formation application will be moved to the front of the line, ahead of everyone else who applied before you.
You can also request expedited services for obtaining certified copies of the LLC's business documents. This costs $10 per copy.
Texas LLC Certificate of Status Fee: $15
A Certificate of Status is a document that verifies your LLC is in good standing with the state. It means you've met all requirements and paid any fees or taxes due. You might need this if your LLC is:
- Opening a bank account
- Applying for a loan
- Entering into business deals
- Registering in another state
You can request a Certificate of Status (sometimes called a Certificate of Good Standing) from the Texas Secretary of State's office. It costs $15 and you can do this online, by mail, or in person.
Texas LLC Amendment Fee: $25 - $150
A Texas LLC Amendment (Form 424), costs $150 for for-profit corporations and $25 for nonprofit corporations.
In Texas, if any of the following details about your LLC change, you need to file an amendment:
- LLC Name: if you change the official name of your LLC
- Address: if your business location moved to a new place
- Purpose: if you change the primary purpose of your LLC
- Management Structure: if you switch from member-managed to manager-managed or vice versa
Texas LLC Certificate of Correction Fee: $15
A Certificate of Correction (Form 403) costs $15.
You need to file a Certificate of Correction when you want to correct a mistake in a document you previously filed with the state.
Texas LLC Trade Name Registration Fee: $25
An LLC that wants to operate under a name that is different from its official registered name needs to file a Trade Name Registration. This is also called an Assumed Name Certificate (Form 503) and costs $25.
You can skip this step, but if your company name is already registered, it can mean legal trouble later.
Texas LLC Application for Reservation Fee: $40
When you reserve a name for your LLC, it is held for your use for up to 120 days.
Texas LLCs are not obligated to reserve a trade name. However, this step is recommended to ensure that nobody else can register that name during the reservation period.
You'll have to pay an additional $40 to extend the time frame to 120 days more. Think of it like keeping a library book for a bit longer before someone else can check it out.
Texas LLC Certified Copy of Form Fee: $1 - $15
If you need a certified copy of any legal document, you can request this from the Secretary of State. A copy of the Certificate of Formation costs $15 per certificate.
Other legal documents, like a copy of a Certificate of Amendment you previously filed, cost $1 per page.
Texas LLC License and Permit Fees
You may have to set aside a budget for specific permits or licenses to operate in Texas. The cost of these permits varies, but some examples are:
- Sales tax permit: for LLCs selling products
- Health permit: for LLCs in the food business
- Building permit: for LLCs in the construction business
Always check with local Texas city or county offices and the state of Texas to know which licenses or permits your LLC needs.
Bottom Line
Before taking the plunge to establish an LLC in Texas, double-check all potential costs so you can plan your budget right.
Business Formation Service - $39 + State Fees
- Form Your LLC, Corporation, or Nonprofit Today
- A Fully-Formed Business
- Registered Agent Service
- Business Address
- Mail Forwarding
- Privacy by Default
Form Your LLC at $0 + State Filing Fees
- Articles of organization
- Name check service
- Digital welcome packet
- Customizable website
Starter - $0 + State Filing Fees
- Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
- Standard filing speed
- 100% accuracy guaranteed
- Other services are available with additional costs
Wrapping up, you need at least $300 for a local LLC in Texas and $750 for a foreign one. While the starting fees seem minimal, optional and annual expenses can quickly add up to $3,000+.
However, knowing these costs upfront keeps surprises at bay. Since you've read everything up to this point, you're now one step closer to creating a well-budgeted and thriving business.
References
- ^ Texas Secretary of State. Business Filings & Trademarks Fee Schedule, Retrieved 12/09/2023
- ^ Texas Secretary of State. Instructions for an Application for Registration of a Limited Liability Company (Forms 304/305), Retrieved 11/03/2023
- ^ Texas Secretary of State. Business Information for Veterans, Retrieved 11/03/2023
- ^ Texas Comptroller of Public Accounts. Texas Sales and Use Tax FAQ: Is there a fee for a permit?, Retrieved 12/09/2023
- ^ Texas Comptroller of Public Accounts. Franchise Tax, Retrieved 11/03/2023
- ^ Texas Comptroller of Public Accounts. Franchise Tax Overview, Retrieved 11/03/2023
- ^ Texas Secretary of State. Form 401 - Statement of Change of Registered Office/Agent, Retrieved 11/03/2023
- ^ Texas Secretary of State. Filing & Other General FAQs, Retrieved 11/03/2023
- ^ Texas Secretary of State. SOSDirect, Retrieved 12/09/2023
- ^ Texas Secretary of State. Accessing Information, Retrieved 12/09/2023
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