How to Start an LLC in Texas

To start an LLC in Texas, file a Certificate of Formation (Form 205) with the Texas Secretary of State, pay the $300 state filing fee, and name a registered agent with a physical Texas address — most filings are approved in a few business days online through SOSDirect. That single filing legally creates your company. Everything else — getting an EIN, opening a business bank account, drafting an operating agreement, and registering for state taxes — follows from it. Below is the exact sequence an operator should run, the real costs at each step, and the part most guides skip: how a Texas LLC with no credit history and no filed tax return actually gets working capital once the doors are open.

The 7 steps to form a Texas LLC

Texas keeps formation deliberately simple. There is no state-level LLC operating agreement requirement and no annual report fee, which makes it one of the cheaper states to run a company long-term. Here is the working sequence:

1. Choose and clear your name. It must include "LLC," "L.L.C.," or "Limited Liability Company" and be distinguishable from every other Texas entity. Run a free preliminary check on the Secretary of State's SOSDirect name-availability search before you commit.
2. Appoint a registered agent. This is a person or company with a physical Texas street address (no P.O. boxes) who accepts legal service during business hours. You can be your own agent, but many owners use a commercial service for privacy.
3. File the Certificate of Formation (Form 205). This is the document that legally creates the LLC. File online via SOSDirect or by mail. The state fee is $300.
4. Get an EIN from the IRS. Free, immediate online, and required to open a business bank account and hire.
5. Draft an operating agreement. Not filed with the state and not legally required in Texas — but banks, lenders, and partners will ask for it, and it governs who owns and controls what.
6. Open a dedicated business bank account. This is the single most important step for future funding: your deposit history in this account is what a revenue-based funder underwrites.
7. Register for state taxes. Set up a Texas franchise tax account with the Comptroller and, if you sell taxable goods or services, a sales-and-use tax permit.

What it actually costs

The advertised "start an LLC in Texas" price is the $300 state fee. The realistic all-in first-year cost depends on how much you outsource. Figures below are typical ranges for example only and change over time — confirm current amounts with the Secretary of State and Comptroller.

The genuinely unavoidable spend to exist is $300. The Texas franchise tax is a pleasant surprise for new owners: below the state's revenue threshold you file a report but owe nothing, and there is no separate annual report fee like many states charge.

Registered agent and operating agreement: the parts that matter later

Two steps look like paperwork but decide how smoothly you operate and borrow later.

Registered agent. If you use your home address as your own agent, it becomes public record and you must be physically available during business hours to accept lawsuits. For a solo operator who is out on job sites, that is a real liability — a missed service of process can lead to a default judgment. A commercial agent solves both problems cheaply.

Operating agreement. Texas does not require one, and single-member owners often skip it. Do not. When you apply for a business bank account, a lease, or working capital, the counterparty wants to see who owns the company, how profits are split, and who can sign. A one-page agreement now prevents a stalled application later. It also reinforces the liability shield that is the whole point of forming an LLC — courts look for evidence you treat the company as separate from yourself.

Funding a brand-new Texas LLC (the honest version)

Here is the trap. A freshly formed LLC has no credit history, no filed tax return, and often only a few weeks of deposits. Traditional bank lines and SBA loans generally want two years of financials and strong personal credit, so most new owners get declined and assume no capital exists. It does — it is just underwritten differently.

Revenue-based financing and MCA marketplaces underwrite the one thing a working LLC produces immediately: bank deposits and revenue. Instead of scoring you on a two-year tax return, a marketplace looks at how much money actually moves through your business bank account each month. That is why opening that dedicated account (step 6 above) matters so much — it is the underwriting file.

Realistic parameters for this channel: approval driven by revenue and deposit consistency rather than credit, FICO 500+ accepted, funding amounts typically starting around $10,000, and decisions in roughly 24 to 48 hours. Repayment is structured as a fixed or percentage remittance tied to your cash flow, not a conventional amortized loan. Nothing here is ever guaranteed — approval and terms depend on your actual deposits — but for a young Texas LLC with steady sales and thin credit, it is usually the fastest realistic path to working capital.

For the broader landscape of options, see our pillar on small business loans and how revenue-based financing compares to term loans and lines of credit.

Decision framework: when to fund a new LLC on revenue vs. wait

Speed is a tool, not a virtue. Use this framework before you take working capital in your first months.

Revenue-based funding works best when:

• Your LLC is already generating consistent bank deposits — you are open and selling, not pre-revenue.
• You have a specific, cash-generating use: inventory to fill a signed order, equipment to take on more jobs, payroll to cover a growth spurt, or bridging a known receivable.
• The opportunity has a return that comfortably outpaces the cost of capital, and the timing is real (a discount, a contract, a season).
• Bank or SBA credit is off the table today because you are too new, but you need to move now.

Avoid or wait when:

• You are pre-revenue with no deposit history — there is nothing to underwrite, and forcing it leads to bad terms. Fund the launch with savings, a startup credit line, or friends-and-family first.
• The cash would cover ongoing losses rather than a specific growth move. Revenue-based capital is for offense, not for plugging a leak.
• Your margins are thin enough that a daily or weekly remittance would choke cash flow. Model the remittance against your slowest week, not your best.
• You qualify for cheaper bank or SBA credit and can wait for it — use the faster, costlier channel only when timing justifies the premium.

Example: a new Texas LLC's first funding decision

The following is an illustrative scenario, for example only, to show how the channel is evaluated — not a quote or a promise.

Same state, same formation steps, opposite funding answer. The deciding variable is not the LLC paperwork — it is whether money is already moving through the business bank account.

After formation: staying compliant and fundable

Forming the LLC is day one. To keep it in good standing and attractive to funders:

• File your franchise tax report every year with the Texas Comptroller, even when you owe $0. Missing it can forfeit your right to do business.
• Keep business and personal money strictly separate. Commingling weakens your liability shield and muddies the deposit history underwriters read.
• Maintain clean bank statements. Consistent deposits, few negative days, and minimal returned payments are exactly what a revenue-based funder scores. Your bank activity is your credit in this channel.
• Update your registered agent if you move or change services, so you never miss legal notice.
• Build a paper trail — invoices, contracts, a simple P&L. The stronger your documentation, the better your options as you graduate toward bank and SBA credit.