No. In Texas, you cannot form an LLC for free. The cost of forming an LLC (limited liability Company) online in Texas is $300. When filing the LLC’s Certificate of Formation, this fee is paid to the Texas Secretary of State. The basic cost of registering a foreign LLC is $750.
Optional fees for a certified copy of the filing document, a certificate of status, and hiring an outside registered agent could bring the total up to $535. Limited liability companies (LLCs) in Texas are business entities that help shield your personal assets from business-related liabilities.
An LLC also provides a flexible management structure as well as certain tax advantages. In order to form an LLC in Texas, you must submit a Certificate of Formation to the Texas Secretary of State. Knowing how much it will cost to form your LLC is critical to getting your business off to a good start.
Note that the only fee you must pay to the Texas comptroller is the state filing fee. This fee is currently set at $300. It is determined by the secretary of state’s office in accordance with existing state laws. But note that the Texas business registration process requires more than just the filing fee. For one, the total cost of registering a foreign LLC is $750.
Aside from that, if you are a foreign LLC, you will be expected to seek additional services such as additional liability protection, an employer identification number, and even a registered agent service to ensure that you can pay federal income tax at the right time. Note that all these costs are very necessary if you want to get your certificate of formation faster.
Cheapest Way to Start an LLC in Texas?
According to experts, the cheapest way to start an LLC in Texas is to do it yourself. Have it in mind that you can save good money while forming an LLC by completing the formation process yourself, putting together your own operating agreement, being your own registered agent, and getting your own EIN. To carry out the process yourself, here are useful steps to take;
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Name Your Texas LLC
The first step to take when starting an LLC is to come up with a name for it. A name search will also need to be carried out to verify that no other similar business names exist in the state. It may also be a good idea to be as innovative with the business name as possible.
At the end of the day, people will recognize your services or products based on the company name. Owing to that, it is critical to take extra precautions to ensure that you get this right. Don’t forget that the name will also be included in the domain.
Choose Your Registered Agent
It’s also a good idea to get a registered agent so you can get all the professional help you need as you file your Texas LLC. In the state of Texas, every LLC is expected to have an agent in the state for the service of process. An agent is a person or company who accepts legal documents on behalf of the LLC.
The registered agent can be a Texas resident or a business entity registered in Texas. A physical street address in Texas is required for the registered agent.
File Articles Of Organization
After you must have verified the name and the registered agent, it is time to file the articles of organization. This is more or less the penultimate process in the process of formation. The article of the organization is expected to include:
- The LLC’s name, including the suffix
- The name and address of the LLC’s registered agent
- Whether the LLC will be member-managed or manager-managed
- If member-managed, the name and address of each initial member
- If a manager-managed, the name and address of each initial manager
- A general purpose clause
- The name and address of the LLC’s organizer
- The effective date of the certificate, and
- Signature of the organizer.
Note that you can file the certificate online via the Texas Secretary of State SOSDirect website, or by mail. The filing fee is $300
Prepare an Operating Agreement
In Texas, while an LLC operating agreement is not required, note that it is strongly recommended. It is an internal document that outlines how you intend to run your LLC. It outlines the members’ and managers’ rights and responsibilities, as well as how the LLC will be managed.
Aside from that, it can help to maintain your limited liability by showing that your LLC is a distinct business entity. In the absence of an operating agreement, your LLC will be governed by state LLC law. Your operating agreement will be expected to include the following:
- The members’ percentage interests in the LLC
- The members’ rights and responsibilities
- The members’ voting powers
- How profits and losses will be allocated
- Rules for holding meetings and taking votes, and
- Buyout, or buy-sell, provisions, determine what happens when a member wants to sell his or her interest, dies, or becomes disabled.
Obtaining an EIN
And at last, obtain an employer identification number. This is provided for free, but it is a vital document. You’ll need it to file the Texas franchise tax among other things. The best way to go about this is to apply for the EIN at the same time you apply for the LLC formation service.
A new Texas LLC will have to file a Certificate of Formation with the Texas Secretary of State and pay a $300 filing fee. Just as was noted above, there is a $30 fee for a certified copy of the Certificate of Formation. There is a $5 fee if you require a Certificate of Status.
You may file an Application for Reservation or Renewal of Reservation of an Entity Name (Form 501) and pay a $40 fee if you want to reserve a name for your LLC for 120 days before registering.