How to Start an LLC in Texas in 2026: The Steps, the Real Costs, and the Filings After

Forming an LLC in Texas is quick and cheap: one form, filed online with the Secretary of State, for $300. The formation is rarely where new Dallas business owners go wrong. What goes wrong is everything that comes after it: a franchise tax questionnaire that arrives by post, a report due the following May even if you owe nothing, and a sales tax permit you needed before your first sale. This guide covers the whole sequence, in order, with the 2026 costs.

Before you file: is an LLC the right structure?

An LLC keeps your personal assets separate from business debts and gives you a choice about how you are taxed. By default, a single-member LLC is taxed like a sole proprietorship, and you can later elect S-corporation treatment to reduce self-employment tax once profits are high enough. We cover that decision in LLC vs S-Corp in Texas. Forming the LLC first and electing later is common and perfectly normal.

Step 1: Choose a name and check it is available

The name must include “limited liability company”, “limited company” or an abbreviation such as LLC, and it must be distinguishable from names already on file. You can run a preliminary check with the Secretary of State, but its own guidance warns against spending money or signing documents based on a preliminary clearance alone. If you want to hold a name while you get organized, a name reservation (Form 501) costs $40 and lasts 120 days.

Step 2: Appoint a registered agent

Every Texas LLC needs a registered agent: an individual Texas resident, or a business registered to act as one, with a physical Texas address where legal papers can be delivered during business hours. The agent must have consented to the appointment, in writing or electronically, and the LLC cannot act as its own registered agent. Many owners name themselves as individuals; others use a commercial agent to keep their home address off the public record.

Step 3: File the Certificate of Formation (Form 205)

This is the step that creates the LLC. You file Form 205 with the Texas Secretary of State, most easily online through SOSDirect, though you can also upload a PDF or file by mail or in person in Austin.

Normal processing times vary through the year, so check the Secretary of State’s current times before you plan a launch date around them. If you want a Series LLC, which Texas allows, the required language has to go in both the certificate and the company agreement, and each series must keep separate records.

Step 4: Get an EIN

Apply for an Employer Identification Number directly with the IRS at irs.gov. It is free, and if approved the number is issued immediately online. You need it to open a business bank account, run payroll and file returns. Be wary of websites that charge for this. The IRS online tool keeps limited hours, and a session expires after 15 minutes of inactivity, so have your formation details ready before you start.

Step 5: Write a company agreement

Texas calls the operating agreement a company agreement. It is not filed with the state, and there is no statute that permits filing it. Even for a single-member LLC, we strongly recommend one: it sets out ownership, who can sign and borrow, and what happens if a member leaves or dies, and banks often ask for it when you open an account.

Step 6: Register a DBA if you trade under a different name

If your LLC will do business under a name other than its legal name, file an assumed name certificate (Form 503) with the Secretary of State for $25. Since September 1, 2019, an entity that files with the Secretary of State no longer has to file a second certificate with the county clerk as well.

Step 7: Franchise tax: the filings that arrive after formation

Texas has no state income tax, but LLCs are subject to the franchise tax, and this is where new owners slip up.

• The Accountability Questionnaire. Shortly after formation, the Comptroller mails a letter with a Webfile number beginning with “FQ”. Use it to complete the Franchise Tax Accountability Questionnaire online. Watch your mail for it.
• The first report is due May 15 of the year after the LLC became subject to the tax. An LLC formed in 2026 files first in May 2027. Because May 15, 2027 is a Saturday, that report is due Monday, May 17, 2027.
• Most small LLCs owe nothing. The no-tax-due threshold for 2026 and 2027 reports is $2,650,000 of annualized revenue, and since 2024 LLCs under it no longer file a No Tax Due Report.
• But the Public Information Report is still required every year. Skipping it can cost the LLC its good standing, even when no tax is due.

Our Texas franchise tax guide walks through the thresholds and rates in detail. There is no separate annual report for LLCs with the Secretary of State; the management information on your PIR is passed along to it.

Step 8: Sales tax permit, if you sell taxable goods or services

If you sell or lease tangible goods, or sell taxable services, in Texas, you need a sales and use tax permit from the Comptroller before your first sale. It is free, though some applicants must post a security bond. Most businesses apply online through the Comptroller’s eSystems, and the permit arrives in roughly two to three weeks. Our Texas sales tax guide covers rates, filing frequency and the discounts for filing on time.

Step 9: Beneficial ownership reporting (you can skip it)

If you have read that every LLC must report its owners to FinCEN, that is out of date. FinCEN exempted domestic companies in March 2025 and confirmed it in a final rule effective August 14, 2026: US companies “are no longer required to file BOI reports.” Only companies formed outside the US and registered to do business here are still covered. Be wary of any letter or email demanding a BOI filing fee.

Step 10: Local Dallas requirements

Texas does not have a general state business license. Dallas-specific requirements depend on what you do and where:

• Certificate of Occupancy: if you will operate from a commercial space in Dallas, the City requires one before you use or change the use of a building, except for single-family and duplex uses.
• Activity permits: certain activities, such as food service or alarm systems, need their own City permits.
• Professional licenses: some trades and professions are licensed by the state, separately from the LLC itself.

Once you own equipment or inventory on January 1, you will also have a business personal property rendition to consider with your county appraisal district.

A simple first-year checklist

1. File Form 205 and save the stamped certificate.
2. Get your EIN and open a separate business bank account the same week.
3. Sign a company agreement.
4. Apply for a sales tax permit if you sell taxable goods or services.
5. Complete the franchise tax questionnaire when the FQ letter arrives.
6. Set up bookkeeping from day one, not at year-end.
7. Put your first Public Information Report in the calendar: May 17, 2027 for an LLC formed in 2026.

If you would like help with the setup, or with deciding whether and when an S-corp election makes sense, call us at (214) 807-2440.

Frequently Asked Questions

Sources: Texas Secretary of State, Form 205 instructions, SOSDirect fee schedule, Texas Express expedite program (July 2026), formation, name and assumed-name FAQs; Internal Revenue Service, Get an Employer Identification Number; Texas Comptroller of Public Accounts, franchise tax overview, reports and payments FAQ, Accountability Questionnaire, and sales tax permit guidance; FinCEN, Beneficial Ownership Information (final rule effective August 14, 2026); Office of the Texas Governor, Business Permits Office; City of Dallas, Certificate of Occupancy. Retrieved 2026-09-25. Fees and processing times change; confirm current figures before filing.