How Much Does an LLC Cost in Texas? A Look at Startup and Ongoing Expenses

Howdy, entrepreneurs! Thinking about starting a new business in the great state of Texas and considering a Limited Liability Company (LLC)? That’s a smart move. An LLC is a fantastic way to get the liability protection of a corporation with less formality. But a common question on every new business owner’s mind is: “How much does an LLC cost in Texas?”

As a Texas business attorney who’s helped countless folks get their ventures off the ground, I can tell you that the answer, like a good Texas chili recipe, has a few key ingredients. The best answer to the total cost is that “it depends” on various factors, from state-mandated fees to the level of customization and legal guidance you need.

Let’s break down the potential expenses:

Certificate of Formation: This is the cornerstone document that officially creates your LLC with the Texas Secretary of State. The current filing fee is $300. If you file online (which most do), there’s a small credit card processing fee, making it around $310. This is a non-negotiable, one-time state fee.

By the way, other states might have different filing fees.

Every Texas LLC (or foreign LLC qualified to do business in the state of Texas) must have a registered agent with a physical street address in Texas. This agent is responsible for receiving official legal and tax documents.

• Be Your Own Agent: You or another member of the LLC can serve as the registered agent if you have a physical Texas address (not a P.O. Box) and are available during business hours. Cost: $0
• Use a Commercial Registered Agent Service: Many business owners opt for a professional service for privacy and convenience. Annual fees for these services in Texas typically range from $50 to $300, with many good options in the $100 range.

This is where the cost can vary significantly. While you can file the paperwork yourself or use a basic online service, many entrepreneurs choose to hire an attorney for peace of mind and to ensure everything is set up correctly, especially the crucial Operating Agreement.

• Simple Single-Member LLC: For a straightforward single-owner LLC where a fairly standard Operating Agreement will suffice, attorney fees in Texas might range from approximately $1,000 to $2,000, plus the state filing fee. Some attorneys in San Antonio, Austin, Dallas, Houston, and other Texas cities offer flat-fee packages for basic formations.
• Multi-Member or Complex LLCs: If you have multiple owners, require a highly customized Operating Agreement (to address specific management structures, profit distributions, buy-sell provisions, dispute resolution, etc.), or have unique business needs, attorney fees will be higher. Expect costs to range from $1,500 to $5,000, and potentially much more for very complex structures that require significant consultation and drafting time.

What influences attorney fees?

• Single-member vs. multi-member structure.
• The complexity and level of customization needed for your Operating Agreement.
• Industry-specific regulations or requirements.
• Additional services like obtaining your EIN (Employer Identification Number) or filing an Assumed Name (DBA).

You’ve likely seen ads for online LLC formation services. They can seem like a cheap and easy option, often advertising low service fees on top of the state filing cost. While these can work for the very simplest of businesses, there are potential pitfalls:

• Generic Operating Agreements: The Operating Agreement is the internal rulebook for your LLC. DIY services often provide very basic, one-size-fits-all templates, based on your answers to a multiple choice questionnaire. These may not adequately protect your interests, address specific needs of your business, or provide clear guidance if disputes arise among members. They may also actually result in a counterproductive or very inappropriate document, depending upon your answers to the multiple choice questions.
• Missed Compliance Steps: They may not fully explain ongoing compliance obligations.
• Lack of Personalized Legal Advice: These services CANNOT provide legal advice – i.e. no answers to legal questions tailored to your situation. An error in formation or a poorly drafted Operating Agreement can be far more costly to fix down the road than getting it right from the start. (We actually have another article on our blog discussing the pros and cons of DIY business formation in more detail!)

Forming your LLC is just the first step. There are ongoing obligations:

• Annual Texas Franchise Tax Report: All Texas LLCs must file an annual franchise tax report with the Texas Comptroller.
  • No Tax Due: If your LLC’s total annualized revenue is below the “no tax due” threshold (currently $2.47 million for report years 2024 and 2025), you’ll file a “No Tax Due Report.” There’s no fee to file this specific report if no tax is owed, but you still must file it.
  • Franchise Tax Owed: If your revenue exceeds the threshold, you will owe franchise tax. The rates vary (e.g., 0.331% for the EZ computation, 0.375% for retail/wholesale, 0.75% for other businesses).
  • Late Filing Penalty: There’s a $50 penalty for filing the franchise tax report late.
• Public Information Report (PIR): This is filed along with your franchise tax report and includes basic information about your LLC’s principals.
• Registered Agent Fee: If you use a commercial service, this is an annual recurring cost.

• Employer Identification Number (EIN): If you plan to hire employees, open a business bank account, or choose to be taxed as a corporation, you’ll need an EIN from the IRS. It’s free to obtain directly from the IRS. Some formation services will charge a fee to get it for you, but you shouldn’t hire any of them. It’s super easy to do this part yourself.
• Assumed Name Certificate (DBA – “Doing Business As”): If your LLC will operate under a name different from its official legal name (e.g., “Lone Star X Solutions LLC” wants to do business as “Austin X Services”), you’ll need to file an Assumed Name Certificate (also known as a “DBA” or “Doing Business As”). For LLCs, this is filed with the Secretary of State, and the fee is $25. This is typically valid for 10 years.
• Business Licenses and Permits: Depending on your industry and location (city/county) in Texas, you may need specific licenses or permits. These costs vary widely.
• Name Reservation (Optional): If you want to reserve your LLC name before you’re ready to file the Certificate of Formation, the fee is $40 for 120 days.

While it’s important to be mindful of the “cost to start an LLC in Texas,” remember that proper formation is an investment in your business’s future and your personal liability protection. The cheapest option isn’t always the best.

Consider what level of guidance and customization you need. For many, especially those with partners or specific operational plans, consulting with a Texas business attorney provides significant value by ensuring your LLC is structured correctly from day one, with a robust Operating Agreement tailored to your venture.

If you’re looking to form an LLC in San Antonio or anywhere in Texas, reach out to a qualified business attorney. They can discuss your specific needs and give you a clear picture of the true investment required for a solid foundation.