Forming a Texas LLC, from Form 205 to the first return
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To register an LLC in Texas, you file Form 205, the Certificate of Formation for a Limited Liability Company, with the Texas Secretary of State, naming a registered agent and choosing member or manager management. Tax & Business Solutions in Houston prepares the filing and then sets up the federal tax treatment, EIN, books and Texas franchise reporting that follow.
How do you register an LLC in Texas?
You file a certificate of formation with the Secretary of State. The form for an LLC is Form 205; a professional LLC uses Form 206, and a for-profit corporation uses Form 201 (Texas SOS forms list). The SOS says certificates of formation "can be filed online through SOSPortal 24 hours a day, 7 days a week" (Texas SOS formation FAQs).
Before filing, you need a name that is distinguishable from existing Texas entities, a registered agent with a Texas street address, and a decision on management.
Member-managed or manager-managed?
Your certificate of formation must pick one. The SOS explains that in a member-managed LLC "every member has management authority," while a manager-managed LLC has "a separate group of managers" who may or may not also be members (Texas SOS). Most single-owner and family LLCs are member-managed. Manager management can suit a company with passive investors. Your attorney can advise on the legal side; Blaga looks at how each choice fits your tax and banking setup.
How is a Texas LLC taxed?
Twice over, in different ways: federally on income, and by Texas through the franchise tax. Federally, the IRS treats an LLC with one member as "an entity disregarded as separate from its owner," and classifies a domestic LLC with at least two members as a partnership; an LLC can change that default with Form 8832 (IRS LLC page). A partnership "does not pay income tax" itself but passes profit to the partners (IRS partnerships).
In Texas, the SOS says LLCs "must also pay Texas franchise taxes" (Texas SOS). The annual report is due May 15. For 2026 and 2027 reports, an entity at or below $2,650,000 owes no tax but still files a Public Information Report or Ownership Information Report (Texas Comptroller).
LLC or S corp: which is better for taxes?
It is not either-or: an S corporation is a federal tax election, and an LLC can make it. The question is whether paying yourself a salary through payroll, with the rest as a distribution, saves more than the added payroll filings and the separate Form 1120-S cost you. At lower profit levels it often does not. Blaga runs the comparison with your real numbers in a tax planning session before you elect.
What do you do after the LLC is approved?
- Get an Employer Identification Number from the IRS.
- Open a business bank account in the LLC's name and keep personal spending out of it.
- Set up a simple bookkeeping system from the first transaction.
- Put May 15 (Texas franchise report) and your federal return date on the calendar.
- Keep your registered agent and registered office current with the state.
Does filing protect your business name?
Only within the state's records. The Secretary of State explains that filing a certificate of formation "only prevents the secretary of state from filing a subsequent certificate of formation for an entity with a name that the secretary of state determines is not distinguishable in the records" (Texas SOS). It is not a trademark. And if your LLC will trade under a different name, it must file assumed name certificates with the secretary of state and with the county clerk.
Step by step
Free consultation: structure, owners, management and tax treatment.
Confirm the name and the registered agent.
Prepare and file Form 205 with the Texas Secretary of State.
Obtain the EIN and set up books and a business bank account.
Calendar the Texas franchise report and the first federal return.
A client, in their own words
“Blaga is very professional and responsive. She patiently listened to my new S-corp situations and questions, then provided plausible advises. I plan to come back for more tax consultations with her.”
Questions people ask
Q1How do I register an LLC in Texas?
File Form 205, Certificate of Formation for a Limited Liability Company, with the Texas Secretary of State, online through SOSPortal or by paper. You will need a distinguishable name, a registered agent with a Texas street address, and a choice of member or manager management.
Q2Does a Texas LLC pay state income tax?
Texas does not have a personal income tax, but LLCs are subject to the Texas franchise tax. For 2026 and 2027 reports, an LLC at or below the $2,650,000 no-tax-due threshold owes no franchise tax, though it still files an information report by May 15.
Q3Can a non-U.S. resident own a Texas LLC?
Yes. Texas law does not limit who may form or own a business entity, beyond the organizer being able to contract. Foreign owners have extra federal reporting to consider, so plan the tax side at the start.
Q4Should my single-member LLC elect S corporation status?
Only when the savings beat the extra cost of payroll and a separate return. Bring a realistic profit estimate to a planning consultation and run both versions before you file the election.