Starting a business in Texas is an exciting step, and forming a Limited Liability Company (LLC) is one of the most popular options for entrepreneurs. LLCs combine the flexibility of a partnership with the liability protection of a corporation, making them a strong choice for small business owners. However, before registering your LLC, it’s important to understand the full costs involved—not only the initial filing fees but also the ongoing expenses required to keep your business compliant with state law.
This article provides a detailed, fact-based breakdown of the cost of forming and maintaining an LLC in Texas. We’ll go through the required state fees, optional services you may need, and recurring compliance costs, all backed by the latest official information.
Cost of an LLC in Texas
The cost of an LLC in Texas is primarily determined by the filing fee required to register your business with the Texas Secretary of State. The most essential and unavoidable cost is the Certificate of Formation filing fee, which is $300. Beyond that, additional expenses may apply depending on your business’s needs.
Here is a quick summary of the main costs:
| Type of Cost | Amount | Frequency | Required or Optional |
|---|---|---|---|
| Certificate of Formation (Form 205) | $300 | One-time | Required |
| Name Reservation (optional) | $40 | 120 days | Optional |
| Assumed Name (DBA) filing | $25 | 10 years | Optional (if using DBA) |
| Registered Agent Service | $100–$300 | Annual | Required (if not self) |
| Annual Franchise Tax Report | Varies (min. $0) | Annual | Required |
| Annual Public Information Report (PIR) | $0 | Annual | Required |
| Certified Copies of Documents | $30+ | As needed | Optional |
| Certificate of Status (Good Standing) | $15 | As needed | Optional |
| Reinstatement (if LLC is forfeited) | $75+ | As needed | Conditional |
Breaking Down the Required Costs
1. Certificate of Formation Filing Fee ($300)
The most significant upfront cost to form an LLC in Texas is the Certificate of Formation filing fee. This document (Form 205) must be submitted to the Texas Secretary of State either online, by mail, or in person.
- Cost: $300
- One-time payment at the time of filing
- Required for every new LLC
Once approved, your LLC officially comes into existence under Texas law.
2. Name Reservation (Optional – $40)
If you want to reserve a business name before officially filing your Certificate of Formation, Texas allows you to reserve a name for 120 days.
- Cost: $40
- Optional—not required if you’re ready to file your LLC immediately
- Filed with Form 501 (Application for Reservation or Renewal)
This can be useful if you’re still finalizing your paperwork but want to make sure no one else takes your preferred name.
3. Assumed Name (DBA) Filing ($25)
If your LLC will operate under a name different from the legal name listed on the Certificate of Formation, you must file an Assumed Name Certificate (commonly known as a “Doing Business As” or DBA).
- Cost: $25
- Valid for 10 years
- Required if using any name other than the LLC’s registered legal name
This ensures transparency and allows the public to know which legal entity is behind the business name.
4. Registered Agent Service ($0–$300 annually)
Every LLC in Texas is legally required to have a registered agent—a person or business authorized to receive legal documents on behalf of the company.
- Cost if self-acting: $0 (you can serve as your own agent if you have a Texas physical address)
- Cost for professional service: $100–$300 annually
Hiring a professional registered agent is optional but often recommended, especially if you don’t want your home address listed in public records or if you need reliable compliance reminders.
5. Annual Franchise Tax Report (Varies)
Texas does not require a traditional “annual fee” like some states. Instead, LLCs must file an Annual Franchise Tax Report with the Texas Comptroller of Public Accounts.
- Cost: Varies based on your LLC’s revenue
- If annual revenue is below the no-tax-due threshold (currently over $1 million), you pay $0
- Above the threshold, tax rates apply (generally 0.375% for retail/wholesale and 0.75% for other businesses)
- Frequency: Annual
- Required for every active LLC
Even if you owe no tax, you must still file the report each year to maintain compliance.
6. Annual Public Information Report (PIR) ($0)
Along with the Franchise Tax Report, LLCs must submit a Public Information Report (PIR) each year.
- Cost: $0
- Filed with the Comptroller’s Office at the same time as the Franchise Tax Report
- Provides updated details about the LLC’s registered agent, principal office, and governing persons
Failure to file can result in penalties and potential forfeiture of your LLC.
Optional and Additional Costs
While the above are the primary recurring and one-time state requirements, there are additional costs that may apply depending on your business needs.
Certified Copies of Documents ($30+)
If you need a certified copy of your Certificate of Formation or other LLC documents (for banks, contracts, or legal requirements), you can request it from the Texas Secretary of State.
- Cost: $30 plus $1 per page
- As needed—not required unless a third party requests it
Certificate of Status (Good Standing) ($15)
A Certificate of Fact – Status (commonly known as a Certificate of Good Standing) verifies that your LLC is legally registered and compliant with Texas requirements.
- Cost: $15
- As needed—usually required when applying for financing, registering in another state, or entering certain contracts
Reinstatement Costs (Varies)
If your LLC is forfeited due to failure to file reports or pay taxes, you may need to apply for reinstatement.
- Cost: $75 reinstatement fee plus any delinquent taxes and penalties
- As needed—only if your LLC loses its good standing
Key Takeaways for Texas LLC Costs
- The minimum cost to form an LLC in Texas is $300, which covers the Certificate of Formation.
- Optional expenses like name reservation ($40) and DBA filing ($25) may apply depending on your circumstances.
- Ongoing compliance involves annual filings with the Comptroller, but many small LLCs owe no franchise tax due to the high no-tax-due threshold.
- Professional services, such as registered agent providers, can add $100–$300 per year to your costs but may be worth the convenience.
Comparing Texas LLC Costs to Other States
Texas falls in the middle range when it comes to LLC formation costs. For perspective:
- California: $70 filing fee, but an $800 annual minimum franchise tax
- New York: $200 filing fee plus costly newspaper publication requirements
- Delaware: $90 filing fee but higher annual franchise taxes for larger businesses
- Texas: $300 filing fee, with no annual filing fee if revenue is under the threshold
This makes Texas relatively affordable over the long term, especially for small businesses.
Hidden or Overlooked Costs to Watch Out For
While Texas LLC costs are straightforward, entrepreneurs often overlook certain expenses that can affect the total price of starting and maintaining a business.
- Business Licenses and Permits: Costs vary depending on industry and location. A local permit could range from $50 to several hundred dollars.
- Operating Agreement Drafting: While not required by Texas law, it’s strongly recommended. If drafted by an attorney, this can cost several hundred dollars.
- Professional Services: Using an attorney or LLC formation company can add $200–$1,000 to initial expenses.
- Banking Fees: Opening a business bank account may require a deposit or ongoing fees.
- Domain and Branding Costs: Reserving a website domain and creating branding materials also add to startup expenses.
Why Understanding LLC Costs Matters
Knowing the true cost of an LLC in Texas helps entrepreneurs:
- Budget realistically for startup expenses
- Stay compliant with state regulations to avoid penalties
- Compare entity options (e.g., LLC vs. corporation vs. sole proprietorship)
- Plan for growth, especially if revenue might exceed the no-tax-due threshold in the future
By having a clear picture of both required and optional costs, business owners can avoid surprises and make informed financial decisions.
One of the most frequently misunderstood aspects of LLC costs in Texas is the franchise tax. Unlike many states that require an annual LLC fee regardless of revenue, Texas ties this cost to the company’s earnings.
Current No-Tax-Due Threshold
For reports due in 2025, the no-tax-due threshold is $2,470,000 in annual revenue. This means that if your LLC makes less than that amount, you owe no franchise tax.
- Revenue below $2.47 million → $0 franchise tax (still must file)
- Revenue above $2.47 million → Tax owed, based on rates
Franchise Tax Rates
- Retail and wholesale businesses: 0.375% of revenue above the threshold
- All other businesses: 0.75% of revenue above the threshold
Example:
- A consulting LLC with $3,000,000 in revenue would pay 0.75% on the amount above $2,470,000.
- Taxable margin = $530,000
- Franchise tax = $3,975
Why This Matters
Many small businesses in Texas pay nothing beyond the initial $300 filing fee and minimal optional costs, making the state appealing for entrepreneurs. But larger LLCs must factor in franchise taxes as a recurring expense.
Step-by-Step Guide to Filing an LLC in Texas
Forming an LLC in Texas involves several clear steps. Understanding these upfront helps you anticipate costs and timelines.
Step 1: Choose Your LLC Name
- Must include “LLC,” “L.L.C.,” or “Limited Liability Company”
- Cannot conflict with existing Texas business names (check availability via the Texas SOSDirect database)
- Optional name reservation ($40) if not filing immediately
Step 2: Appoint a Registered Agent
- Must have a physical address in Texas (no P.O. boxes)
- Can be yourself, another individual, or a professional registered agent service
Step 3: File the Certificate of Formation
- Complete Form 205 with the Texas Secretary of State
- File online via SOSDirect, by mail, or in person
- Pay the $300 filing fee
Step 4: Create an Operating Agreement (Recommended)
- Not legally required, but highly advisable
- Outlines ownership structure, member rights, and management procedures
- Helps prevent disputes and demonstrates separation of business and personal finances
Step 5: Obtain an EIN (Employer Identification Number)
- Free from the IRS
- Required for hiring employees, opening a business bank account, and filing taxes
Step 6: File for Licenses and Permits
- Depending on your industry, you may need local, state, or federal permits
- Costs vary widely (from $50 to several thousand dollars depending on the type of license)
Step 7: Maintain Ongoing Compliance
- File annual Franchise Tax Report and Public Information Report
- Keep registered agent information up to date
- Renew assumed names every 10 years if applicable
DIY vs. Professional Service Costs
Entrepreneurs can choose between filing on their own or using professional assistance. Both approaches have different cost implications.
DIY Filing
- Cost: $300 (plus optional extras like name reservation and DBA)
- Pros: Lowest upfront cost, direct control over the process
- Cons: Time-consuming, risk of mistakes, no professional support
Attorney-Assisted Filing
- Cost: $500–$2,000 plus filing fees
- Pros: Legal guidance, custom operating agreement, compliance advice
- Cons: High cost compared to other options
Online Formation Services
- Cost: $0–$300 service fee (in addition to $300 state filing fee)
- Pros: Faster processing, help with paperwork, add-on services like registered agent
- Cons: Not as personalized as an attorney, upselling of unnecessary extras
For most small businesses, an online LLC service offers a good balance of affordability and convenience, while those with complex structures may benefit from attorney assistance.
Common Mistakes That Increase LLC Costs
Even though Texas is relatively affordable for LLCs, many entrepreneurs end up paying more than necessary due to avoidable mistakes.
- Forgetting to File Annual Reports
- Leads to penalties and possible forfeiture of the LLC
- Reinstatement costs ($75 + back taxes) add unnecessary expense
- Failing to Maintain a Registered Agent
- If your agent resigns or becomes unavailable and you don’t replace them, your LLC risks losing good standing
- Hiring a reliable registered agent service can prevent compliance lapses
- Using a DBA Without Filing
- Operating under an unregistered assumed name can result in fines and legal challenges
- Filing a DBA in Texas only costs $25 for 10 years
- Not Keeping Records and Operating Agreements
- Even though not required, lack of proper records can cause disputes and undermine liability protection
- Drafting an operating agreement early can save thousands later
- Ignoring Industry-Specific Licenses
- Each city and industry has different permit requirements
- Operating without proper licenses can result in shutdowns or penalties
The Realistic Total Cost of a Texas LLC
While the minimum cost to form an LLC in Texas is $300, most businesses will encounter additional expenses.
- Bare minimum (DIY, no extras): $300
- With DBA + Registered Agent + Misc. filings: $450–$700 first year
- With attorney-assisted formation: $800–$2,500+ first year
Recurring annual costs vary depending on whether you owe franchise tax, use a registered agent service, or file for renewals.
Why Texas Is an Attractive State for LLC Formation
When evaluating business-friendly states, Texas consistently ranks highly due to its:
- No state personal income tax
- High franchise tax threshold (many small LLCs owe nothing annually)
- Straightforward filing process through SOSDirect
- Relatively low ongoing compliance costs
For small to mid-sized businesses, Texas offers a balance of affordability and legal protection that makes LLC formation accessible.
Final Thoughts on LLC Costs in Texas
Forming an LLC in Texas requires a $300 filing fee at minimum, with optional and recurring costs depending on your business’s choices and size. Many small LLCs benefit from owing no franchise tax due to the state’s high revenue threshold, making ongoing costs low compared to other states.
To summarize:
- Required minimum cost: $300 (Certificate of Formation)
- Optional costs: $25 for DBA, $40 for name reservation, $100–$300/year for a registered agent
- Annual costs: Franchise Tax Report (often $0 for small businesses) and Public Information Report ($0)
- Additional costs as needed: Certified copies, Certificate of Status, reinstatement fees
By planning ahead and avoiding common mistakes, Texas entrepreneurs can keep costs predictable and maintain compliance while focusing on growth.