How Much Is an LLC in Texas: A 2025 Guide

Officially establishing your business as a limited liability company (LLC) in Texas is a savvy move that offers liability protection, meaning your personal assets are shielded from business liabilities. However, many first-time founders underestimate the total investment required to officially form their LLCs, beyond the well-known $300 Texas state filing fee. When forming your Texas LLC, your budget should account for ongoing franchise tax filings and optional, but often critical, services like a Texas registered agent. This guide outlines every dollar you can expect to spend in 2025 and illustrates how proactive planning can transform compliance costs into growth‑driving investments.

Key Texas LLC Takeaways

• The $300 Texas Certificate of Formation fee is just the beginning. Factor in credit card processing, registered agent service, and industry permits.

• The annual franchise tax report is mandatory even when you owe $0. Missing the “No Tax Due Report” triggers penalties and jeopardizes your LLC’s good standing.

• Hiring a professional CPA firm or electing S corp status, among other strategic choices, can dramatically reduce lifetime income tax liability.

• Veteran‑owned startups may qualify for a fee waiver and five years of franchise‑tax relief.

Strategic decisions made early on during business formation, such as business entity structure, tax elections, and the Texas LLC operating agreement, have a lasting impact on the total cost of ownership for your Texas-based business.

The Initial Investment: Breaking Down Texas LLC Formation Costs

Whether you’re a new business or established, there are several primary, one-time additional costs associated with officially registering an LLC in the state of Texas. Other entities your business can operate as include single-member LLCs, Multi-member LLCs, and sole proprietorships.

The Mandatory State Filing Fee

The Certificate of Formation (Form 205) costs $300 when filed with the Texas Secretary of State, which is a mandatory fee. If you pay online with a credit card, plan for an additional 2.7 percent processing fee—approximately $8.10—bringing the total for most online submissions to $308.10. While an extra $8 might not seem like it will break the bank, costs can add up fast, potentially stressing your operations.

Digital filings cost more, but the expedited processing allows you to download stamped copies of legal documents instantly. In contrast, filing by mailed check avoids the convenience fee but will take much longer. Filing in person is rare.

Common First‑Year Expenses to Anticipate

Building these line items into your launch budget helps avoid delays opening bank accounts or securing permits.

Beyond Day One: Understanding the Ongoing Financial Life of a Texas LLC

As a business owner, there are recurring costs and tax obligations that you must manage to maintain your LLC's good standing with Texas officials. 

The Texas Franchise Tax: A Deeper Look

Instead of a simple annual report fee, Texas imposes a franchise tax on an LLC’s taxable margin. Most small businesses fall below the $2.47 million no‑tax‑due threshold for 2025, yet the Annual Franchise Tax Report (Form 05‑163) is still compulsory. File on time each May 15 to sidestep a $50 late‑report penalty and avoid accruing interest on any tax that's past due.

1‑800Accountant’s business tax advisory service helps Texas businesses accurately calculate their margin and file correctly to avoid penalties, even when no tax is owed.

Business Permits and Industry‑Specific Licensing

There are often-overlooked "hidden" costs of doing business in the state of Texas. State agencies and local governments will often layer on permit and professional license costs that vary by:

• City

• County

• Profession

For example, cosmetology salon licenses start at $106, while food‑service establishments pay from $258 plus inspections. Always confirm requirements and fees with your municipality and sector regulator before launch.

Strategic Decisions That Define Your Total Cost

Foundational choices made by Texas-based small business owners and entrepreneurs can significantly influence the overall cost and complexity of running an LLC.

Formation Path: DIY vs. Professional Services

There are three main formation paths, each with its advantages: DIY filing, online formation services, or full-service accounting partners.

1. DIY Filing ($300 + your time). This option is the most cost-effective upfront, but errors can trigger rejection fees or future amendments that disrupt operations.

2. Online Forming LLC Services ($0–$199 + state fee). This option has a low sticker price, but upsells for employer identification number (EIN), operating agreements, assumed name certificate, Articles of Organization, registered agent fee, business license, and formation documents can quickly add up.

3. Full‑Service Accounting Partnership. Firms pair filing with tailored tax strategy, bookkeeping setup, and year‑round franchise tax support, often saving multiples of the upfront fee through optimized business structure and deductions.

Partnering with an accounting firm like 1-800Accountant, offering transparent, tax-deductible flat-rate service fees from day one, provides expert guidance to ensure your entity is structured for long-term state and federal tax efficiency, not just compliance.

Optimizing Your Tax Structure: The S Corp Election

An LLC is a state-level entity, but you can elect for it to be taxed as an S corporation at the federal level.

Electing S corporation status can slash the 15.3% self‑employment tax for profitable LLCs by:

• Paying owners a reasonable salary

• Distributing the remaining profit as dividends 

Timing and documentation are critical because late or misfiled elections with the IRS can erase potential savings.  

Ready to restructure your LLC? 1-800Accountant provides personalized guidance on whether and when to make the S corp election, a critical decision that directly impacts your take-home pay and overall tax burden.

Special Considerations and Emerging Trends for Texas LLCs

These programs and recent developments impact LLC costs for certain types of businesses in Texas.

Honoring Service: The Veteran‑Owned Business Fee Waiver

Due to Senate Bill 938, Texas veterans who own 100 percent of their LLC may qualify for:

• A waiver of the $300 LLC filing fee

• A five‑year franchise tax exemption

If you qualify, submit Form 05‑904 and supporting DD‑214 documentation alongside your formation paperwork.

Asset Protection with Series LLCs

Texas allows Series LLCs. In this scenario, one filing fee creates a parent LLC that can establish unlimited “series” for separate assets. Legal and bookkeeping complexity increases, but real estate investors appreciate the built-in asset segregation.

This strategic choice requires upfront legal and accounting advice for proper setup and ongoing management.

From Cost Management to Financial Strategy: A Proactive Approach

It's essential to actively manage your Texas LLC's finances, including sales tax and state taxes, for growth and efficiency.

Laying the Foundation with Meticulous Bookkeeping

Accurate records let you:

• Monitor expenses

• Substantiate deductions

• Stay audit‑ready

This makes bookkeeping essential to your Texas LLC. Dedicated bookkeeping services, like those offered by 1-800Accountant, provide the transparent financial reporting needed to: 

• Track expenses

• Manage cash flow

• Make informed decisions about your business's future

The Power of Year‑Round Tax Planning

Minimizing your business's tax liability legally and strategically will achieve the lowest "cost" for your LLC and a favorable tax return.

When you trust 1-800Accountant to guide your business year-round via our affordable tax advisory solution, you experience service that moves beyond simple tax filing. Your designated tax advisor will reduce the lifetime costs of your business by: 

• Proactively identifying deductions

• Optimizing your business tax structure

• Ensuring compliance with complex state laws and federal rules

Building Your Texas Business on a Solid Financial Foundation with 1‑800Accountant

The real price of establishing your Texas-based LLC goes beyond the $300 filing fee. When you found your business or make it official in the state, expect to encounter: 

• A blend of fixed fees

• Variable tax responsibilities 

• Strategic decisions you'll need to make (choosing a registered agent, etc.) 

• Ongoing obligations (filing franchise tax reports, annual fees, etc.)

While there are special considerations your business may be eligible for, you will have the most confidence in your strategic business choices with experts on your side. Special considerations include: 

• The veteran-owned fee waiver

• Asset protection via Series LLCs

Partnering with 1‑800Accountant, America's leading virtual accounting firm, means every cost becomes part of an integrated plan to boost your business's cash flow and safeguard compliance. Our financial solutions, including business tax preparation and filing, full-service bookkeeping, and payroll, are affordable, tax-deductible, and can be tailored to fit within your budget and scale with your business as it grows. 

Ready to launch your Texas LLC with confidence? Book a consultation — usually 30 minutes or less — to get started on your custom Texas tax roadmap today.