Average Cost of setting up an LLC in Texas

Starting a new business is always exciting, but worrying about the set-up costs definitely isn’t.

13:55 05 September 2020

See how you can minimize the cost of forming an LLC in Texas.

 

The average cost of setting up an LLC varies significantly from state to state, and can also depend on whether states require that LLCs pay additional fees, such as the publication fees required in New York, or the Franchise Tax required in Delaware, Georgia, Texas and several other US states. In Texas, the basic cost of setting up an LLC in Texas starts with a $300 filing fee, and goes up from there depending on how people go about setting up an LLC. Some people make use of formation services, which may result in it costing more, while others complete the process entirely by themselves. 

 

Filing fees in Texas

 

In the State of Texas, to form an LLC business owners are required to file a Certificate of Formation with the Texas Secretary of State. This can be done either online, by mail or tax, or in person. The filing fee to process the Certificate of Formation, which will officially form the LLC in Texas is $300, and certified copies of the Certificate of Formation is $30 each. Another option is to hire an LLC formation service to file your formation forms on your behalf. Some LLC formation services, like ZenBusiness charge $39 plus state fees and others, like LegalZoom can charge $149 plus state fees. This is the basic cost of setting up an LLC in Texas, the filing fees and the costs of a formation service. However there are additional and other optional costs that need also be considered. One such optional cost is for reserving an LLC name, the Name Reservation fee which is $40 when done online. It will also cost an extra $25 to expedite the processing procedures of the forms.

 

Costs of a registered agent

 

Hiring a registered agent is part of forming an LLC. The appointed registered agent must be resident with a physical address, and be authorized to conduct business in Texas. In Texas the services of a registered agent costs, on average, between $100 and $300 per year depending on the individual or service provider. However there are registered agent services in Texas that charge from $50 per year, and with some services, like ZenBusiness, the services of a registered agent is free for the first year for customers who make use of their LLC formation service. 

 

Paying Franchise Tax

 

Aside from the state and federal taxes LLC are required to pay, LLCs in Texas are also required to file an annual report and Franchise Tax with the Texas Comptroller of Public Accounts, on their website. The payable amount will depend on an LLC’s annual revenue. If their total annual revenue is less than $1,130,000, then they do not pay taxes but are still required to file a “no tax due” report. If their annual revenue is more than $1,130,000 then LLCs will be required to pay a graduated tax, calculated based on a complex formula. 

 

The costs of business licenses and permits

 

Depending on the industry in which an LLC operates, it may also be required to obtain specific business licenses and permits in order for them to conduct business and operate in Texas. The cost of business licenses and permits will depend on the location of the business, what kind of business it is and also the type of licence or permit. More details on federal licences and permits requirements can be found in the U.S. Small Business Administration guide, while more specific details of costs and requirements in Texas can be found on The State of Texas’ Work Section. 

 

Saving on startup costs

 

It's quite easy to save on startup costs of an LLC. by forming an LLC without the assistance of LLC formation services, registered agents service or even business attorneys, will make setting up an LLC in Texas much cheaper than with the use of such services. Hiring LLC formation and registered agents services, and the like, can really hike up the cost of setting up an LLC. However, some formation services are really affordable and therefore worth considering as their services generally include filing services, a registered agent, an operational agreement and an Employer Identification Number (EIN). Yet, to minimize the costs of setting up an LLC in Texas, it's best to do it without the assistance of a service. But that’s not to say help isn’t out there, visit TRUiC’s website where you can get all the guidance you need to set up an LLC in Texas at the cheapest possible cost.