Start a Business in Texas
Written by Deanna R. Ngueket, CPA. Reviewed August 2026. This page is general information, not tax advice for your situation.
Filing a certificate of formation is the easy part. It costs $300 and can be done online in an afternoon. What causes trouble later is everything decided around it: which entity, whose name is on the public record, whether an S election makes sense and when it has to be filed, and which annual reports you have just signed up for without being told.
Most of the expensive problems we fix for clients trace back to a formation done quickly by someone who never had to file the returns afterwards.
What forming a Texas LLC involves
| Step | Detail | Cost |
|---|---|---|
| Certificate of formation | Form 205, filed with the Texas Secretary of State | $300 |
| Expedited processing | Optional. Standard expedited, or next-day and same-day tiers | $50 / $500 / $750 |
| Registered agent | Texas street address, consent required. The entity cannot be its own agent | Varies |
| EIN | Issued immediately online by the IRS | Free |
| S-corp election | Form 2553, if the numbers support it | — |
Two things worth knowing before you file
Your registered agent address is public. The Secretary of State says so plainly: a document on file is a public record subject to public access. If you work from home, listing your home address makes it permanently searchable. The SOS itself recommends using a business address where privacy matters.
Never pay for an EIN. The IRS issues them free and immediately online. Sites charging for one are reselling a free government service. One limit worth knowing: the IRS issues only one EIN per responsible party per day.
The S-corporation election, and its deadline
An S election can reduce self-employment tax — but it is a calculation, not a default, and it brings obligations: payroll registration, quarterly Forms 941, annual Forms W-2 and 940, and a Form 1120-S with a K-1 for each shareholder. It also obligates you to pay yourself reasonable compensation.
The timing rule catches people. Form 2553 is generally due within two months and fifteen days of the start of the tax year the election should take effect — and for a new entity that year starts on the earliest of when it first had shareholders, first acquired assets, or began doing business. Not the date on your formation certificate.
If you have missed it, relief exists. Under Revenue Procedure 2013-30 a late election can generally be made within three years and seventy-five days of the intended effective date, with reasonable cause.
What you owe every year afterwards
This is the section nobody gets at formation, and it is the one that causes real damage.
Your Texas LLC almost certainly owes no franchise tax — the threshold for report years 2026 and 2027 is $2,650,000 in annualized total revenue. But the No Tax Due Report was discontinued for reports due on or after 1 January 2024, and entities below the threshold must still file an information report every year by 15 May. For an LLC that is Form 05-102, the Public Information Report.
Miss it and the Comptroller can take away your right to sue or defend in Texas courts, expose officers, directors, members and owners to personal liability for certain debts of the entity, and ultimately forfeit your business rights and your certificate of formation. Reinstatement is possible with no time limit, but it means filing everything delinquent, paying penalties and interest, obtaining a tax clearance letter, and filing Form 801.
Good news, and it is recent
You no longer have to file a beneficial ownership report. FinCEN’s final rule permanently removes beneficial ownership reporting for US companies and US persons under the Corporate Transparency Act. FinCEN states the rule is effective on its publication in the Federal Register. Foreign reporting companies must still report beneficial ownership information for foreign individuals.
If you were told in 2024 or 2025 that you had a BOI filing obligation, that is no longer the case.
If you plan to hire
Two Texas obligations arrive quickly. You must register with the Texas Workforce Commission within 10 days of becoming a liable employer — and paying $1,500 in gross wages in a calendar quarter is enough to trigger it, which a single S-corporation owner salary usually does. New hires must be reported to the Attorney General’s Child Support Division within 20 calendar days.
Who this is for
- 1099 professionals ready to move from sole proprietor to LLC
- Digital business owners forming a Texas entity from out of state
- Anyone weighing LLC against S-corporation and wanting the arithmetic first
- Owners who formed an entity years ago and are not certain what they have been filing
Talk it through
Book a free consultation, or call 713-730-9792.
Frequently asked questions
How much does it cost to form an LLC in Texas?
The state filing fee is $300. Expedited processing is available at additional cost. An EIN is free from the IRS.
Can I be my own registered agent?
You personally can serve, but the entity cannot serve as its own agent. Remember the address becomes public record — worth thinking about if you work from home.
Should I elect S-corporation status right away?
Not automatically. It saves self-employment tax at some income levels and costs payroll administration at all of them. It can also affect your QBI deduction. Model it first.
Do I still have to file a BOI report?
No, if you are a US company owned by US persons. FinCEN’s final rule permanently removed that requirement. Foreign reporting companies must still file.
My LLC has no revenue. Do I file anything with Texas?
Yes — an annual information report by 15 May, generally Form 05-102. Zero revenue does not excuse the filing, and not filing has real consequences.