Starting a business in Texas usually means forming an LLC or corporation with the Texas Secretary of State, which costs $300 for a Certificate of Formation as of October 2026, then registering with the Texas Comptroller for franchise tax and, if you sell taxable goods or services, a sales tax permit. Sole proprietors and general partnerships skip the state formation filing but file an assumed name certificate with their county if they use a trade name.
Texas has no personal income tax. Most small businesses also owe no franchise tax, because the no-tax-due threshold for 2026 and 2027 reports is $2.65 million in annualized revenue.
Updated October 2026.
Go to:
Best Business Formation Services in Texas (2026)
If you’d rather not handle forming a business in Texas yourself, these are the services we recommend, in order. The table compares price and what’s included.
| Rank | Provider | Best for | Price | What’s included |
|---|---|---|---|---|
| 1 | Mainstay Filing | Forming an LLC with the agent, EIN and annual report included | $199/year + state fee at cost | LLC formation filing, registered agent for the year, EIN application, annual report preparation and filing |
| 2 | TX Registered Agent.org | Texas registered agent service only | $99/year | $99 per year, flat; in-state street address for the registered office; legal documents served on the company are scanned and sent to the owner online |
| 3 | Texas Registered Agent.ai | Texas registered agent service only | $99/year | in-state street address for the registered office; legal documents served on the company are scanned and sent to the owner online |
1. Mainstay Filing
Mainstay Filing is our top pick in Texas. It costs $199/year + state fee at cost and covers lLC formation filing, registered agent for the year, EIN application, annual report preparation and filing. The price stays the same every year, with no add-on menu.
2. TX Registered Agent.org
TX Registered Agent.org is a Texas registered agent service at $99/year. It provides $99 per year, flat; in-state street address for the registered office; legal documents served on the company are scanned and sent to the owner online. It’s a fit if you only need a registered agent rather than full formation help.
3. Texas Registered Agent.ai
Texas Registered Agent.ai is a Texas registered agent service at $99/year. It provides in-state street address for the registered office; legal documents served on the company are scanned and sent to the owner online. It’s a fit if you only need a registered agent rather than full formation help.
Texas at a glance (October 2026)
| Item | Texas detail |
|---|---|
| Filing office | Texas Secretary of State, Business and Public Filings |
| Online filing | SOSPortal (formerly SOSDirect) |
| LLC Certificate of Formation (Form 205) | $300 |
| For-profit corporation Certificate of Formation (Form 201) | $300 |
| Name reservation | $40 for 120 days, renewable |
| Assumed name (DBA), LLCs and corporations | $25 with the SOS, valid up to 10 years |
| Annual filing | Franchise tax report or Public Information Report, due May 15 |
| Franchise tax no-tax-due threshold | $2,650,000 for 2026 and 2027 reports |
| Sales tax | 6.25% state, up to 8.25% combined |
Fees come from the Secretary of State’s Form 205 instructions and related form pages. For a full first-year budget, see Mainstay Filing’s Texas LLC cost breakdown.
Picking a structure: what Texas law offers
Texas recognizes every common business form, and the choice affects liability, taxes and paperwork.
| Structure | State filing | Liability | Franchise tax? |
|---|---|---|---|
| Sole proprietorship | County assumed name only, if needed | Personal | No |
| General partnership | County assumed name only, if needed | Personal | Generally no |
| LLC | Form 205, $300 | Limited | Yes (most owe $0 under the threshold) |
| Corporation | Form 201, $300 | Limited | Yes (most owe $0 under the threshold) |
LLCs are the most common choice for Texas small businesses: same $300 fee as a corporation, fewer formalities and flexible federal tax treatment. Corporations make sense when you plan to sell shares to investors. Note that LLCs and corporations are both “taxable entities” for franchise tax purposes, so they have an annual Comptroller filing even when they owe nothing. Our Texas LLC guide walks through Form 205 in more detail.
Naming your Texas business
The Secretary of State requires your entity name to be distinguishable from existing entities, registered names and reservations on file, and it cannot imply a government affiliation or a business you are not authorized to run. LLC names need an organizational designation such as “Limited Liability Company”, “LLC” or “Ltd. Co.”, and corporations need “Corporation”, “Incorporated”, “Company” or an abbreviation.
Practical ways to check a name:
- Search existing Texas entities through SOSPortal or the Comptroller’s taxable entity search, and see our Texas business name search guide.
- Check whether the .com and social handles are free with Namechk, since a name you cannot claim online is a weaker brand.
- Search the USPTO trademark database before you invest in signage.
- Generate alternatives with the business name generator if your first choice is taken.
A name reservation costs $40 and holds the name for 120 days. You can renew it during the 30 days before it expires, according to the Form 501 instructions.
Assumed names (DBAs) in Texas
An LLC or corporation that does business under another name files an assumed name certificate with the Secretary of State for $25. It lasts up to ten years and can be renewed within six months of expiring. Since September 1, 2019, entities no longer also file at the county level, per the Form 503 instructions. Sole proprietors and general partnerships still file their assumed name certificates with the county clerk.
Choose a registered agent
Every Texas LLC and corporation must keep a registered agent and a registered office at a Texas street address where legal papers can be personally delivered during business hours. A mailbox service or answering service does not qualify. The agent can be a Texas resident or a business entity registered in Texas, and an LLC cannot serve as its own agent.
The person you name must consent to serve. Many owners appoint a commercial agent for privacy and reliability; Mainstay Filing includes a Texas registered agent for the first year with its formation service.
File your Certificate of Formation
LLCs file Form 205, and for-profit corporations file Form 201. The filing fee is $300 for either. The Secretary of State recommends filing online through SOSPortal for faster processing; card payments add a convenience fee of $0.25 plus 2.25%.
Form 205 asks for:
- The entity name and designation.
- The registered agent and registered office.
- Whether the LLC is managed by managers or by its members, with each name and address.
- The initial mailing address, which the Comptroller uses for tax correspondence.
- The organizer’s signature. No notarization is needed, and the filing can take effect on approval or on a delayed date up to 90 days out.
After approval, adopt an operating agreement (LLC) or bylaws (corporation). Texas does not collect these documents, but they govern ownership, voting and transfers.
Get an EIN
Apply for a free Employer Identification Number with the IRS. You need it for a business bank account, payroll and most Comptroller registrations.
Register with the Texas Comptroller
Franchise tax
Texas LLCs and corporations are subject to franchise tax. According to the Comptroller, the annual report is due May 15. For 2026 and 2027 reports:
- No-tax-due threshold: $2,650,000 in annualized total revenue.
- Rates: 0.375% for retail and wholesale businesses, 0.75% for others.
- EZ computation: available up to $20 million in revenue, at 0.331%.
Businesses at or below the threshold no longer file a No Tax Due Report, but they must still file a Public Information Report (corporations and LLCs) or Ownership Information Report each year. Skipping it leads to forfeiture notices and can cost the company its right to do business in Texas.
Sales and use tax permit
If you sell taxable goods or services, apply for a sales tax permit through the Comptroller’s eSystems before you start selling. Texas imposes a 6.25% state sales and use tax, and local jurisdictions can add up to 2%, for a maximum combined rate of 8.25%, per the sales tax overview. The Comptroller tells you after approval whether you will file monthly or quarterly.
Employer accounts
If you hire, register with the Texas Workforce Commission for state unemployment tax. Texas follows the federal minimum wage of $7.25 per hour. Workers’ compensation works differently here than in other states: according to the Texas Department of Insurance, most private employers can choose whether to carry it. Employers without coverage (non-subscribers) must report that to the state and report qualifying workplace injuries.
Licenses and permits
Texas has no general statewide business license. Licensing depends on your industry and location:
- State occupational licenses through agencies such as the Texas Department of Licensing and Regulation (electricians, cosmetologists, HVAC and more) and the Texas Alcoholic Beverage Commission for alcohol sales.
- Professional licenses from boards for accountants, engineers, real estate agents and health professionals.
- City requirements such as certificates of occupancy, sign permits and health permits in Houston, Dallas, San Antonio, Austin and other cities.
Check with your city’s permitting office and county before you sign a lease, especially for food, child care and home-based businesses.
Banking and insurance
Open a business bank account with your Certificate of Formation, EIN and operating agreement. Keeping finances separate protects the liability shield and simplifies your franchise tax and federal returns. Insurance worth pricing includes general liability, professional liability for service firms, commercial auto and, if you decide to subscribe, workers’ compensation.
What does a Texas business file each year?
Texas has no annual report with the Secretary of State. The yearly obligation is with the Comptroller: a franchise tax report, or for businesses under the threshold, the Public Information Report or Ownership Information Report, due May 15. Sales tax returns follow the monthly or quarterly schedule assigned to you. Keep your registered agent current with the Secretary of State, because failing to maintain one can lead to involuntary termination of an LLC.
Building a website for a Texas business
Claim a domain that matches your business name, ideally before you file, then put up a simple site with your services and contact details. These website builders are good starting points:
FAQs
How much does it cost to start an LLC in Texas?
As of October 2026, the Texas Secretary of State charges $300 to file a Certificate of Formation for an LLC (Form 205). Online filings through SOSPortal by card add a small convenience fee. Optional costs include a $40 name reservation and a $25 assumed name certificate. Texas has no annual report fee with the Secretary of State.
Do I have to pay franchise tax in Texas?
Texas LLCs and corporations are subject to franchise tax, but businesses with annualized revenue at or below $2,650,000 owe no tax for 2026 and 2027 reports. They no longer file a No Tax Due Report, but they must still file a Public Information Report or Ownership Information Report by May 15 each year.
Does Texas have a state income tax?
No. Texas does not tax personal income, so owners of sole proprietorships, partnerships and most LLCs pay no state income tax on business profits. Instead, LLCs and corporations fall under the franchise tax, which only charges tax above the $2.65 million revenue threshold for 2026 and 2027 reports.
How do I file a DBA in Texas?
LLCs and corporations file an assumed name certificate (Form 503) with the Texas Secretary of State for $25. It lasts up to ten years. Sole proprietors and general partnerships file their assumed name certificates with the county clerk in each county where they do business, and county clerks set their own fees.
Do I need a sales tax permit in Texas?
You need a Texas sales and use tax permit if you sell, lease or rent taxable goods or sell taxable services in Texas. Apply through the Comptroller’s eSystems before you start selling. The state rate is 6.25%, and local jurisdictions can add up to 2% for a combined maximum of 8.25%.
Is workers’ compensation required in Texas?
Not for most private employers. The Texas Department of Insurance says private employers can choose whether to carry workers’ compensation insurance. Employers who opt out are called non-subscribers and must report their lack of coverage to the state, along with qualifying work-related injuries. Carrying coverage limits an employer’s liability if an injured employee sues.
Can I be my own registered agent in Texas?
Yes, if you are a Texas resident with a street address where legal papers can be delivered in person during business hours. A mailbox service does not qualify, and an LLC cannot be its own registered agent. Your address will appear on public records, which is why many owners use a commercial registered agent.
CHK_ YOUR NAME RIGHT NOW
Use our engine to quickly check your content right now!
Disclosure: We may earn a commission from services recommended on this page.
