Steps to Form a Texas LLC — Complete Walkthrough

This page walks you through the exact steps to form an LLC in Texas, from initial name search through receiving your filed Certificate of Formation. For the overview, see our main Texas LLC formation guide.

Step 1: Search for Name Availability

Before anything else, verify your desired LLC name is available on the Texas Secretary of State records.

How to search:

1. Go to SOSDirect: https://direct.sos.state.tx.us/
2. Click "Name Availability" under the search tools
3. Enter your desired name and check results
4. The name must be "distinguishable" from all other entities on file — not just LLCs but corporations, LPs, and other registered entities

Texas naming rules :

• Must include "Limited Liability Company," "LLC," "L.L.C.," "Limited Company," "LC," or "L.C."
• Cannot include restricted words (bank, trust, insurance, university) without regulatory approval
• Cannot imply government affiliation
• Must be distinguishable from existing entities — minor variations like punctuation or "the" do not make a name distinguishable

If your name is taken, see our name search guide for strategies.

Step 2: Reserve Your Name (Optional)

If you are not ready to file immediately, you can reserve your name for 120 days by filing Form 501 with a $40 fee. This guarantees no one else can register that name while you prepare your formation documents. See our name reservation guide for details.

Step 3: Designate a Registered Agent

Choose your registered agent before filing — you must list them on the Certificate of Formation and they must consent to serve.

Requirements :

• Must have a physical street address in Texas (no PO boxes)
• Must be available during regular business hours to accept service of process
• Individual agents must be Texas residents, age 18+
• Business entities must be authorized to transact business in Texas
• The LLC itself cannot be its own registered agent

See our registered agent guide for a full breakdown of options.

Step 4: Prepare and File Certificate of Formation (Form 205)

This is the official formation filing. You can file online through SOSDirect or by mail.

Online filing through SOSDirect:

1. Create a SOSDirect account at https://direct.sos.state.tx.us/
2. Navigate to Business Formations > Domestic LLC
3. Complete the form fields:

• Entity name (exactly as you want it registered)
• Registered agent name and Texas street address
• Management type (member-managed or manager-managed)
• Governing authority members/managers (names and addresses)
• Duration (perpetual or specific end date)
• Purpose statement
• Organizer name and address

4. Pay the $300 filing fee
5. Submit and note your confirmation number

Processing time: 5-7 business days for standard online filings. Mail filings take 2-3 weeks.

For detailed guidance on what to include, see our Certificate of Formation page.

Step 5: Draft an Operating Agreement

Once your LLC is filed, draft your operating agreement. Texas calls this the "company agreement" under the Texas Business Organizations Code. It is not filed with the state — it is an internal document — but it governs your LLC's operations.

Key provisions to include:

• Ownership percentages and capital contributions
• Profit and loss allocation
• Management structure and voting rights
• Member admission and withdrawal procedures
• Buyout provisions and transfer restrictions
• Dissolution triggers and procedures

See our operating agreement guide.

Step 6: Obtain Your EIN

Apply for an Employer Identification Number from the IRS. This is free and can be done online at irs.gov (immediate issuance) or by mailing Form SS-4.

You need your EIN to:

• Open a business bank account
• Hire employees
• File federal tax returns for the LLC
• Apply for business credit

See our EIN guide.

Step 7: Post-Formation Compliance

After formation, handle these items:

• Open a business bank account — guide here
• File Franchise Tax Report — due May 15 following formation year, filed with the Texas Comptroller
• Obtain business licenses — check city/county requirements for your location and industry
• Assumed Name Certificate — if operating under a name different from your LLC name, file with the county clerk

Timeline Summary

Total time from start to fully operational: 2-4 weeks with standard processing.

FAQ

Can I complete the entire Texas LLC formation process online?

Yes. All steps can be done online: name search via SOSDirect, Certificate of Formation via SOSDirect, EIN via irs.gov. The operating agreement is internal and does not require any state filing. Business licenses vary by locality.

What if my Certificate of Formation is rejected?

The Secretary of State will return your filing with a letter explaining the issue. Common reasons: name not distinguishable, missing required information, or incorrect fee. Fix the issue and refile — the $300 fee is non-refundable, so you must pay again.

Do I need a lawyer to form a Texas LLC?

No. The process is designed for self-filing. However, if you have complex ownership structures, multiple members with different contribution levels, or professional licensing requirements, consulting an attorney for the operating agreement is worthwhile.