The Cost Of Setting Up an LLC
In the process of setting up your Texas LLC, you’ll be faced with quite a few expenses. Some of these are required by legislation, and others are just recommended. We’ll cover the costs of setting up an LLC in Texas and also provide you with the information that you will need to choose which optional services are worth your money.
Required Costs To Form A Texas LLC
State Filing Fee: $300
To form an LLC in Texas, you’ll need to file a Certificate of Formation with the Secretary of State. A $300 fee costs to process that document. An extra fee will be incurred if you decide to work with a professional small business formation support (recommended).
Business Permits & Licenses: Varies
Depending upon geographical location and your industry, you may want to cover several local, state, and federal permits/licenses to operate in Texas. The cost can’t be spoken to by us this will impose on your business without understanding these particulars make sure you include some wiggle room in your startup budget to account for these potential expenses.
How Do I Find The Right Licenses & Permits?
Use the Tools below to Learn What permits & licenses are required of your LLC, or Possess a Specialist service do the legwork for you:
- Federal: All federal Small Business licensing requirements can be found on the U.S. Small Business Administration Site.
- State: To learn about condition permits & licenses, and begin on the application procedure, head to the Texas Secretary of State’s site.
- Local: Contact your local Chamber of Commerce to learn about the licensing needs of your Particular county/municipality.
Optional Cost Of Forming A Texas LLC
The following expenses are recommended but not required for Texas LLCs. Each of the solutions below will produce the process of setting up your company; however, the legislation mandates none. Keep reading to find out which of those prices that are optional seem rewarding for your LLC.
LLC Formation Service: $49 – $79
Lots of folks prefer to go this route, As soon as it’s likely to create an LLC in Texas without the help of a professional.
Nowadays, you do not need to spend hundreds (or thousands) of dollars to make sure you’re tackling the LLC formation process properly. Online services such as ZenBusiness ($39 + State Fee) and LegalZoom ($79 + State Fee) will look after the filing process on your behalf for a portion of the expense of a company lawyer.
Additional Services Provided:
In addition to submitting your Certificate of Formation, creation providers that are online offer a lot of services that could allow you to get the ball rolling in your own new business. Two of the most popular add-on services for LLC founders are working EIN enrollment and agreements.
Operating Deal: $40-$99
An operating agreement is a governing document that outlines the ownership and management structure of an LLC. Whether you are starting a single- or multi-member LLC in Texas, it is essential to have an operating agreement in place. Purchasing a custom agreement form an online formation service is an easy way to ensure you’ll have a legally-binding and thorough document.
EIN Registration: $60-$70
Upon forming an LLC, then you will need to get an EIN (or Employer Identification Number)–a social security number for your business. You can delegate this task if you’d prefer to not apply for your EIN through the IRS.
Business License Research Service: $99
You may consider recruiting the help of a professional small business permit research support if your LLC demands national, state, and local licenses or permits to operate.
While not necessary for every company owner, these services can be helpful to busy entrepreneurs wanting to save time for the paperwork and research aspect of things. If you’re trying to optimize your time in the first phases of your business, we recommend checking out Incfile’s $99 business license research bundle.
Ongoing LLC Maintenance Costs
As soon as you’ve taken good care of all initial LLC formation expenses, you will continue to be responsible for covering a couple of additional costs to remain compliant with state law. Below we will explore the costs involved in keeping a Texas LLC.
Texas Franchise Tax: Varies
LLCs with an annualized income of less than $1.13 million do not pay any tax, but must file a “no due tax report.” LLCs with an annualized revenue of more than $1.13 million pay a graduated fee calculated based on a complex formulation. Late tax payments are subject to a penalty of 5 percent, which increases to 10 percent if you pay after 30 days.
Texas Annual Report Fee: Free
Texas requires that LLCs file an annual report together with Franchise Tax. The form can be submitted via the Website of the Texas Public Accounts Comptroller. It’s due May 15. Texas imposes a penalty of $50 for failure to file on time.
Registered Agent: $119 / yr
A necessity we have not yet addressed is to appoint a registered agent for your Texas LLC. The person or business agency responsible for collecting and handling legal documentation on behalf of your company is a registered agent.
Although Texas does not prevent business owners from working as their licensed agents, for safety, convenience, and discretion, many people want to appoint a professional. Keep in mind that if you take on this role, you will be responsible for keeping regular business hours at the address provided on your training documents and for receiving process notices if your LLC issued. Click here for more info.