You’ll hit the spot by choosing a limited liability company (LLC) as a legal structure for your future business in Texas even if you are not quite sure. When looking into how to start an LLC in Texas, you understand that it’s a no-frills task.
The next thing you want to clarify is the cost of setting up an LLC in Texas. Let’s make a detailed breakdown of all the expenses the company formation and operation might entail including basic Texas LLC costs and added ones.
Table of Content
The cheapest way to start an LLC in Texas is to handle the whole process on your own. This will allow you to save on paying an attorney or professional formation company. You will only have to cover compulsory state fees and government charges.
The payments you’ll have on your plate will depend on the state rules and requirements, the type of company to be formed, and the type of activity you are going to run. Based on this, we’ve considered all possible LLC-related payments you might need to cover in Texas.
A filing fee is a compulsory payment you have to make to get your company registered by the state. Hence, this fee is state-specific and is to be paid to the Secretary of State’s Office when submitting your formation documents.
An LLC filing fee in Texas is $300. It’s valid for state residents only. In other words, it’s the registration cost of a domestic LLC when you file and transact business in the same state.
Notably, should you choose any alternative payment method or channels other than an online payment or cheque, get ready to add a 2.7% convenience fee to $300.
Online filing is not only the most convenient but also the fastest registration method. Your application will be reviewed and approved within 2 to 3 business days. Meanwhile, mailed submissions are processed within 7 to 10 working days.
Basically, you have two options here:
A quick remark here is that specialized service is by far the best option since the job will be performed by professionals, and you’ll enjoy peace of mind that is well worth the price.
On average, an agent service subscription costs about $100 a year. Many companies provide bulk discounts on multi-state and multi-year orders that will cut down the final cost by 15% to 25%.
The state does have annual reporting requirements for all companies, yet filings are free. However, if you miss the due date (15th of May), you’ll be charged a $50 late fee.
Notably, companies that have tax overdue will be also levied a penalty, which is 5% of the unpaid tax amount.
A franchise tax is a sort of privilege charge for conducting business within a jurisdiction. Some states have franchise taxes for companies while others don’t. In Texas, all taxable entities are open to a franchise tax.
The state levies a franchise tax over LLCs based on their net revenue. Threshold and deductions amounts as well as franchise tax rates vary by year. To learn more about the Texas franchise tax and figure out the current rates, visit the Texas Comptroller’s website.
Anyway, even if you don’t have to pay this tax, you should file a “No Tax Due” report with the state.
If you have an established LLC registered in some other state and want to operate in Texas, you should for a foreign LLC in this jurisdiction.
You should file Form 304 with the Secretary of State and pay a $750 foreign LLC filing fee.
As the name suggests, a professional LLC is normally formed by some kind of certified specialist to provide professional services. A professional LLC filing fee in Texas is the same as that for a domestic company. It is $300.
Yet, you should also have or get an appropriate license for each professional who is a member of your company. This might add from $15 to $500 or even more to your registration cost.
A series LLC is a structure that allows for creating a number of sub-divisions under the roof of a single LLC. Those units or series have different business purposes and have their own assets and commitments separate from a parent LLC and other affiliates.
A state filing fee for a Series LLC is still $300 since you pay only for the master LLC formation. However, to make “child” companies distinguishable, you’ll have to file an Assumed Name Certificate for each of them. A certificate filing fee is $25.
The state doesn’t call for a general business license for LLCs at a state level. In the meantime, municipalities might have their own requirements for a general license depending on the activity you are engaged in or the professional services you provide.
To learn more about statewide and federal licenses and permits, you can visit the website of the Texas Department of Licensing and Regulation. And in a city or county clerk’s office, you will learn everything you need to know about local permissive documents.
The LLC fees in Texas vary from $15 - $40 at a lower end to $500 - $1000 at a high end. Such a big price gap is due to the business scenarios and the type of license you need.
Licenses and permits in Texas need to be renewed on an annual or biennial basis. Normally, renewal fees are the same as registration fees. So, they fall within the above-mentioned range.
Texas LLCs are open to certain tax payments when formed and further on a regular basis. Apart from a franchise tax discussed above, companies are to pay the following levies:
Texas is one of a few US states that have no state income taxes. All other state levies are to be paid to the Texas Comptroller’s office.
You might have some added Texas LLC fees to pay if you need one of the services and options listed below.
If you have a great company name in mind and have already verified its availability in the state, you can put a moniker on hold for a period of up to 120 days. This will give your time to finalize the rest of the preparations before filing.
You can file an Application for a Reservation by paying a $40 fee and even renew it for yet another 120-day period if needed. The service is available for domestic and foreign limited liability companies alike.
You can run your enterprise in Texas under a name different from the registered or legal moniker. This will expand your marketing and business opportunities a lot.
A fictitious or DBA (doing business as) name needs to be registered with the state as well. You should file for an Assumed Name Certificate that costs $25 per name version.
Called a Certificate of Good Standing in most other states, this document is issued by the Secretary of State to confirm your company’s good standing status and legitimacy. When ordering, you should pay a state fee of $15.
Most often, the document is required by:
You might need a certified copy of your Texas LLC registration documents when applying for foreign qualification, registering a trademark, filing a lawsuit, etc.
An official documents copy is issued by the Secretary of State, signed, and sealed. An official service fee is $30 per copy.
By trademarking your LLC name, logo, or other designs, you safeguard your company’s attributes from being used by other entities or businesses.
Notably, trademarking at a state level in Texas will enable you to considerably save on expenses. A state trademark registration rate is $50 per class against a $325 federal rate.
If it happens that your company has been administratively dissolved due to some compliance issues, to regain its legal status, you’ll have to file for the Texas LLC reinstatement and pay a compulsory fee of $75.
Should you decide to quit doing business, you need to dissolve a legal entity to legalize your decision.
Similar to formations, dissolutions are filed with the Texas Secretary of State. The state filing fee in this case is $40.