Start an LLC in Texas — The Lone Star State's Biggest Business Advantage

Your Texas LLC name must be unique among all businesses registered with the Texas Secretary of State and must include a required designator. You can check availability for free on the Texas SOS website.

Texas Naming Rules:

• Must include: "Limited Liability Company," "LLC," or "L.L.C."
• Cannot use: Words implying a government agency (e.g., "FBI," "Treasury")
• Restricted words: "Bank," "Insurance," "University" require additional state approval
• Must be distinguishable: From all existing Texas business names on the SOS database
• Cannot be deceptive: Your name cannot mislead the public about your business type

Every Texas LLC must designate a registered agent — called a "registered agent for service of process" in Texas — who has a physical Texas street address and is available during business hours to receive legal documents and official state notices.

Who can be your registered agent?

• Yourself: Must have a physical Texas address and be available during business hours
• A trusted individual: Any adult Texas resident with a physical address
• A professional service: Like Brendat — keeps your home address off the public record

In Texas, the document that creates your LLC is called a Certificate of Formation (Form 205) — not "Articles of Organization" like most other states. You file it with the Texas Secretary of State via the SOSDirect portal online, or by mail.

What's included in Form 205 (Certificate of Formation)?

• LLC name and registered office address
• Registered agent name and Texas address
• Purpose of the LLC (can be general)
• Management structure (member-managed or manager-managed)
• Organizer's name and signature

Texas does not legally require LLCs to have an operating agreement, but it is strongly recommended for all Texas LLCs — especially multi-member ones. It defines ownership, profit sharing, and management rules, and strengthens your liability protection.

Your operating agreement should cover:

• Ownership percentages: Each member's share and capital contribution
• Profit distribution: How and when profits are divided
• Management: Who makes decisions and how voting works
• Member changes: Adding or removing members
• Dissolution: Steps to close the LLC if needed

An EIN is your LLC's federal tax ID — required to open a business bank account, hire employees, and file federal taxes. You apply through the IRS for free.

• US residents: Apply free online at IRS.gov — instant approval
• Non-US residents: Apply by fax using IRS Form SS-4 — takes 4–6 weeks
• Brendat handles this: Included in Standard and Premium packages

Texas does not require an annual report for LLCs. Instead, Texas has a franchise tax (also called a "margin tax") — but most small LLCs owe $0. Here's what you need to know:

• Revenue threshold: LLCs with total revenue under $2,470,000/year pay $0 in franchise tax
• Above threshold: Tax is calculated on your "taxable margin" (generally 0.375% for most businesses)
• No Income Tax: Texas has no personal state income tax — a major benefit for LLC owners
• Annual filing: Even if you owe $0, you must file a No Tax Due Report annually with the Texas Comptroller
• Due date: May 15 every year