Starting a business in Texas is an exciting step toward building independence and long-term success. One of the most common business structures entrepreneurs choose is the Limited Liability Company (LLC), thanks to its flexibility, protection of personal assets, and favorable tax treatment. However, before forming an LLC in Texas, it is important to understand the associated costs. These costs not only include the initial filing fees but also recurring expenses, maintenance fees, and optional services depending on the needs of your business.
The cost of an LLC in Texas is more than just a one-time filing expense. It can include the Certificate of Formation fee, registered agent fees, annual reports, franchise taxes, and additional charges for services such as business name reservations or certified copies of documents. Choosing the right services and providers can make the process smooth and cost-effective, while avoiding unnecessary expenses.
In this guide, we’ll explore the top 20 breakdowns of the cost of forming and maintaining an LLC in Texas. Each listing will detail the specific expense, its purpose, and key points such as approximate pricing, where to file or pay, and what services may be included. This will help entrepreneurs prepare a clear budget before launching their business in Texas.
Cost of an LLC in Texas
1. Certificate of Formation Fee
Description: The Certificate of Formation is the legal document that officially creates your LLC in Texas. Filing this with the Secretary of State is mandatory to begin your business.
Cost: Approximately $300 for standard filing.
Address: Texas Secretary of State, 1019 Brazos Street, Austin, TX 78701.
Contact: Phone – (512) 463-5555.
Services Offered: Processing of LLC formation, official filing acceptance, and providing a stamped copy of the filed certificate.
2. Registered Agent Service Fee
Description: Every Texas LLC must designate a registered agent who can receive legal and tax documents on behalf of the company. This can be the owner or a professional service.
Cost: $100–$300 annually if hiring a professional service. Free if the owner acts as their own agent.
Address: Varies depending on service provider; professional agents are located across Texas.
Contact: Phone numbers and customer service vary by provider.
Services Offered: Acceptance of state documents, compliance reminders, mail forwarding, and privacy protection.
3. Name Reservation Fee
Description: Reserving a business name ensures that it is held for your LLC before officially filing. This step is optional but helpful if you are not ready to file immediately.
Cost: $40 per reservation.
Address: Texas Secretary of State, Business Filings Division, Austin, TX.
Contact: Phone – (512) 463-5555.
Services Offered: Reservation of a business name for up to 120 days.
4. Assumed Name (DBA) Registration Fee
Description: If your LLC wants to operate under a name different from its legal name, a “Doing Business As” or Assumed Name Certificate must be filed.
Cost: $25 per county if filed at the county clerk’s office; approximately $25–$50 if filed at the state level.
Address: Varies depending on county; state filings at Secretary of State, Austin.
Contact: County clerk’s office or Secretary of State at (512) 463-5555.
Services Offered: Legal registration of alternate trade names.
5. Operating Agreement Drafting Costs
Description: Though not required by Texas law, an Operating Agreement outlines ownership, management, and operational procedures. Businesses often hire professionals to draft one.
Cost: $0 if self-drafted, $200–$1,000 if created by an attorney.
Address: Law firms and business service providers across Texas.
Contact: Varies by provider.
Services Offered: Legal consultation, customized operating agreements, compliance with Texas business laws.
6. Employer Identification Number (EIN)
Description: An EIN is required for tax purposes, opening business bank accounts, and hiring employees. It is issued by the Internal Revenue Service.
Cost: Free if obtained directly through the IRS; $50–$100 if obtained via third-party services.
Address: IRS Office, available nationwide.
Contact: Phone – (800) 829-4933.
Services Offered: Issuance of federal tax identification numbers.
7. Franchise Tax Filing
Description: Texas requires LLCs to file an annual franchise tax report. The amount depends on the business’s revenue.
Cost: Varies; $0 if revenue is below the threshold (currently $2.47 million), otherwise a percentage of taxable margin.
Address: Texas Comptroller of Public Accounts, Austin, TX.
Contact: Phone – (512) 463-4600.
Services Offered: Tax filing processing, franchise tax assessments, compliance assistance.
8. Annual Report Fee
Description: Texas requires an annual report to maintain the good standing of an LLC. This is often filed alongside the franchise tax report.
Cost: Included with franchise tax filing; $0 if below revenue threshold, otherwise determined by taxable revenue.
Address: Texas Comptroller of Public Accounts.
Contact: Phone – (512) 463-4600.
Services Offered: Annual reporting compliance, records maintenance.
9. Business License Fees
Description: Depending on your industry, you may need specific business licenses or permits at the city or county level.
Cost: Varies widely, from $50 to several hundred dollars depending on the business type.
Address: Local city or county offices in Texas.
Contact: City hall or county clerk offices.
Services Offered: Issuance of business licenses and permits.
10. Sales Tax Permit
Description: Businesses selling goods or taxable services in Texas must obtain a Sales Tax Permit from the Comptroller’s office.
Cost: Free to apply, but ongoing compliance costs depend on taxable sales.
Address: Texas Comptroller of Public Accounts, Austin, TX.
Contact: Phone – (512) 463-4600.
Services Offered: Sales tax permit issuance, collection and reporting guidelines.
11. Professional Licensing Fees
Description: Certain professions, such as healthcare providers, contractors, or accountants, require professional licenses to operate legally.
Cost: $50–$500 depending on the profession.
Address: Texas Department of Licensing and Regulation, Austin, TX.
Contact: Phone – (512) 463-6599.
Services Offered: Licensing, renewals, professional regulation compliance.
12. Certified Copy Fees
Description: Businesses may need certified copies of documents such as the Certificate of Formation for banking or legal purposes.
Cost: $30 per certified copy, plus $1 per page.
Address: Texas Secretary of State, Austin, TX.
Contact: Phone – (512) 463-5555.
Services Offered: Issuance of certified business documents.
13. Certificate of Good Standing
Description: This document verifies that your LLC is compliant with state requirements and authorized to do business in Texas.
Cost: $15 per certificate.
Address: Texas Secretary of State, Austin, TX.
Contact: Phone – (512) 463-5555.
Services Offered: Issuance of certificates verifying business compliance.
14. Expedited Filing Fee
Description: If you want your LLC documents processed faster than the standard turnaround, you can request expedited service.
Cost: Additional $25–$50 depending on the document.
Address: Texas Secretary of State, Austin, TX.
Contact: Phone – (512) 463-5555.
Services Offered: Priority processing of LLC formation and related documents.
15. Business Insurance Premiums
Description: While not a direct state filing fee, most LLCs need business insurance such as general liability or professional liability coverage.
Cost: $500–$1,500 annually depending on industry and coverage.
Address: Insurance providers throughout Texas.
Contact: Varies by insurance company.
Services Offered: Coverage for liability, property, and professional risks.
16. Legal Consultation Fees
Description: Entrepreneurs may choose to consult attorneys to ensure full compliance when forming an LLC.
Cost: $150–$500 per hour depending on the law firm.
Address: Law firms statewide in Texas.
Contact: Varies by provider.
Services Offered: Legal advice, contract drafting, LLC compliance assistance.
17. Accounting and Bookkeeping Services
Description: Many LLCs rely on accountants for tax planning, bookkeeping, and annual filings.
Cost: $500–$3,000 annually depending on complexity.
Address: Accounting firms across Texas.
Contact: Varies by provider.
Services Offered: Tax preparation, bookkeeping, payroll management, compliance support.
18. Document Amendment Fee
Description: If your LLC changes its name, management structure, or other major details, you must file a Certificate of Amendment.
Cost: $150 per amendment.
Address: Texas Secretary of State, Austin, TX.
Contact: Phone – (512) 463-5555.
Services Offered: Filing updates to LLC information and maintaining state records.
19. Reinstatement Fee
Description: If your LLC falls out of good standing due to missed filings or nonpayment of fees, reinstatement may be required.
Cost: Varies depending on penalties; base reinstatement fee starts at $75.
Address: Texas Secretary of State, Austin, TX.
Contact: Phone – (512) 463-5555.
Services Offered: Processing reinstatement of forfeited or inactive LLCs.
20. Voluntary Dissolution Fee
Description: If an LLC chooses to close, it must file a Certificate of Termination with the state.
Cost: $40 filing fee.
Address: Texas Secretary of State, Austin, TX.
Contact: Phone – (512) 463-5555.
Services Offered: Processing of official business closure documents.
Brief Overview of LLC Costs in Texas
Forming and maintaining an LLC in Texas involves both fixed and variable expenses. The fixed costs include the $300 Certificate of Formation, potential $40 name reservation, and $25–$50 fees for DBAs or expedited filings. Variable expenses come into play with services like hiring a registered agent, legal consultations, accounting, or business insurance, which depend on the size and complexity of the business. Additionally, ongoing compliance requirements, such as annual franchise tax filings and professional licenses, ensure that businesses remain in good standing with state and local authorities.
While some costs are mandatory, others are optional but can make business operations smoother. For example, hiring a registered agent may not be required if the owner serves in that role, but doing so provides privacy and convenience. Similarly, drafting an operating agreement or seeking professional legal and accounting support may be optional but offers long-term benefits.
Conclusion
Starting an LLC in Texas is an attractive choice for entrepreneurs due to the state’s strong economy, business-friendly climate, and legal protections offered by this entity type. However, before diving into the process, it is crucial to understand the financial responsibilities involved.
At the core, you can expect to pay around $300 to establish your LLC, with potential additional fees for name reservations, DBAs, or amendments as your company grows. Beyond the initial setup, ongoing expenses such as franchise taxes, business insurance, accounting services, and professional licenses must be factored into your operating budget. Depending on the industry, location, and scale of the business, total yearly expenses can range from a few hundred dollars to several thousand.
By carefully planning for these costs, entrepreneurs can avoid surprises and ensure they remain compliant with state regulations. Moreover, selectively investing in optional services like legal consultation, accounting support, or registered agent services can provide greater peace of mind and smoother business operations.
Ultimately, understanding the top 20 costs of an LLC in Texas allows aspiring business owners to set realistic budgets and make informed decisions. With the right preparation, forming an LLC in Texas can be a cost-effective and rewarding step toward long-term business success.