WEBVTT 00:00:00.227 --> 00:00:06.307 To start an LLC in Texas, you file a Certificate of Formation, Form 205, with the 00:00:06.387 --> 00:00:10.306 Texas Secretary of State and pay the $300 filing fee. 00:00:10.915 --> 00:00:14.147 That's it? One form and three hundred dollars? 00:00:14.147 --> 00:00:20.147 That's the filing itself. Around it, you'll choose a name, name a registered agent, 00:00:20.187 --> 00:00:25.107 write a company agreement, get a free EIN, and file a report with the Texas 00:00:25.187 --> 00:00:27.427 Comptroller every May 15. 00:00:27.427 --> 00:00:30.147 This is The Business Formation Podcast. 00:00:30.187 --> 00:00:34.467 Today we're walking through every one of those steps for 2026, including the new 00:00:34.524 --> 00:00:39.507 filing system Texas just switched to, what it really costs, and the three best ways 00:00:39.560 --> 00:00:42.627 to have it filed for you. So, step one. 00:00:43.427 --> 00:00:49.507 Step one is the name. In Texas, your LLC's name has to include the words "limited 00:00:49.579 --> 00:00:55.348 liability company," "limited company," or an abbreviation of one of those, like LLC. 00:00:55.348 --> 00:00:57.188 Where does that rule actually come from? 00:00:57.188 --> 00:00:59.908 It's printed right on Form 205. 00:01:00.084 --> 00:01:04.708 Your name also has to be distinguishable from every other name on file with the 00:01:04.772 --> 00:01:09.828 Secretary of State, and it can't falsely suggest a link to a government agency. 00:01:09.828 --> 00:01:13.828 So how do I know if my name is taken before I pay for anything? 00:01:13.828 --> 00:01:18.788 The Secretary of State will give you a preliminary answer by phone or by email. 00:01:18.928 --> 00:01:25.828 The name availability line is (512) 463-5555. 00:01:25.968 --> 00:01:28.308 But that answer is only preliminary. 00:01:28.448 --> 00:01:31.828 The final call comes when your filing is actually reviewed. 00:01:31.828 --> 00:01:35.988 And if I've found the perfect name but I'm not ready to file yet? 00:01:35.988 --> 00:01:42.948 You can hold it. A name reservation is $40 on Form 501, and it holds the name for 00:01:43.108 --> 00:01:44.468 120 days. 00:01:44.468 --> 00:01:49.348 Good to know. And for anyone just joining us, I'm Maya, here with Dan. 00:01:49.348 --> 00:01:50.388 Glad you're here. 00:01:52.360 --> 00:01:56.920 Step two is the registered agent, and this is the one people ask about most. 00:01:56.968 --> 00:01:58.520 What is it, and who can it be? 00:01:58.520 --> 00:02:03.320 Your registered agent is the person or company that receives legal papers and 00:02:03.364 --> 00:02:09.000 official mail for your LLC. In Texas, you list them in Article 2 of your Certificate 00:02:09.120 --> 00:02:14.600 of Formation. It has to be a Texas resident, or a business registered in Texas, with 00:02:14.640 --> 00:02:16.440 a Texas street address. 00:02:16.440 --> 00:02:19.320 Can my LLC just be its own agent? 00:02:19.320 --> 00:02:22.160 No, the LLC can't be its own agent. 00:02:22.210 --> 00:02:26.120 And the address has to be a place where legal papers can be handed to the agent 00:02:26.154 --> 00:02:31.480 during normal business hours, so a mailbox service on its own won't qualify. 00:02:31.480 --> 00:02:33.880 What about using my home address? 00:02:33.880 --> 00:02:35.880 You can, if you live in Texas. 00:02:35.980 --> 00:02:41.000 But that address becomes public, which is why a lot of owners use a commercial agent 00:02:41.050 --> 00:02:46.120 instead of their home. Either way, your agent has to agree to serve, and signing the 00:02:46.200 --> 00:02:47.720 form confirms they have. 00:02:47.720 --> 00:02:51.400 And if I pick one now and change my mind later? 00:02:51.400 --> 00:02:57.800 That's easy to fix. Changing your agent later is Form 401, and the state fee is 00:02:57.840 --> 00:02:59.480 $15. 00:02:59.717 --> 00:03:02.037 Okay, step three, the actual filing. 00:03:02.117 --> 00:03:03.317 Where do I do it? 00:03:03.317 --> 00:03:09.717 You submit Form 205 to the Secretary of State, online through SOSPortal or by mail, 00:03:09.797 --> 00:03:16.597 with the $300 filing fee. And here's the big change for 2026: SOSPortal 00:03:16.668 --> 00:03:21.156 replaced SOSDirect on September 29, 2026. 00:03:21.306 --> 00:03:24.516 So any guide that still tells you to use SOSDirect... 00:03:24.516 --> 00:03:29.957 ...is out of date. You'll need a new SOSPortal account, and it uses multifactor 00:03:30.037 --> 00:03:31.237 sign-in. 00:03:31.237 --> 00:03:33.557 Walk me through it. What do I actually click? 00:03:33.557 --> 00:03:40.037 In SOSPortal, you start a new filing, choose to create an entity, complete the 00:03:40.117 --> 00:03:43.397 form, preview your submission, and check out. 00:03:43.397 --> 00:03:46.677 And paying. Is it really just three hundred? 00:03:46.677 --> 00:03:49.477 You can pay by bank transfer or by card. 00:03:49.677 --> 00:03:56.117 A card adds 25 cents plus 2.25 percent, so the $300 filing comes to 00:03:56.157 --> 00:03:58.357 $307 by card. 00:03:58.357 --> 00:04:00.517 What goes on the form itself? 00:04:00.517 --> 00:04:05.797 Your registered agent and registered office, the name and address of each initial 00:04:05.866 --> 00:04:11.077 member or manager, a mailing address for franchise tax mail, and the organizer. 00:04:11.253 --> 00:04:17.157 Keep in mind, those names and addresses become part of the public record too. 00:04:17.157 --> 00:04:19.157 How long does Texas take to approve it? 00:04:19.157 --> 00:04:22.037 Texas doesn't publish a standard processing time. 00:04:22.170 --> 00:04:25.077 If you need it faster, there's Texas Express. 00:04:25.193 --> 00:04:31.477 Standard expedite is $50 per document and usually takes 2 to 3 business days. 00:04:31.653 --> 00:04:37.237 Next day is $500, and same day is $750. 00:04:40.644 --> 00:04:43.044 Step four. You said company agreement. 00:04:43.151 --> 00:04:45.524 Is that the same thing as an operating agreement? 00:04:45.524 --> 00:04:49.524 Same thing. Texas law calls it a company agreement. 00:04:49.644 --> 00:04:52.884 You keep it with your records; it isn't filed with the state. 00:04:52.884 --> 00:04:55.923 So if nobody files it, do I really need one? 00:04:56.628 --> 00:05:02.164 Here's the interesting part. Texas law even counts oral or implied agreements. 00:05:02.351 --> 00:05:07.844 So put yours in writing: who owns what, how profits are split, who makes decisions, 00:05:08.004 --> 00:05:10.244 and what happens if a member leaves. 00:05:11.022 --> 00:05:14.382 Step five is the EIN, the federal tax number. 00:05:14.542 --> 00:05:16.302 Do I have to pay someone for that? 00:05:16.302 --> 00:05:23.102 No. You apply free with the IRS at IRS.gov, after the Secretary of 00:05:23.155 --> 00:05:25.582 State has filed your Certificate of Formation. 00:05:25.875 --> 00:05:31.342 If the online application is approved, the IRS issues the number right away. 00:05:31.502 --> 00:05:36.622 Just have the Social Security number or ITIN of the person in charge ready. 00:05:36.622 --> 00:05:39.422 I keep hearing about a beneficial ownership report, too. 00:05:39.582 --> 00:05:41.982 Do I need to file that? 00:05:41.982 --> 00:05:45.942 You can skip it. FinCEN no longer requires it from U.S. 00:05:45.970 --> 00:05:46.302 companies. 00:05:48.195 --> 00:05:50.755 Step six is staying in good standing. 00:05:50.851 --> 00:05:52.835 Most states have an annual report. 00:05:52.931 --> 00:05:54.035 Does Texas? 00:05:54.035 --> 00:05:56.435 Not with the Secretary of State. 00:05:56.542 --> 00:05:58.995 Texas has no annual report there. 00:05:59.095 --> 00:06:03.875 Instead, you file with the Texas Comptroller by May 15, every year. 00:06:03.875 --> 00:06:08.755 That's franchise tax, right? Am I paying tax on a brand-new LLC? 00:06:08.755 --> 00:06:15.715 Probably not. Below $2.65 million in revenue, for the 2026 and 2027 00:06:15.785 --> 00:06:18.675 reports, you owe no franchise tax. 00:06:18.775 --> 00:06:22.115 But you still file the free Public Information Report. 00:06:22.211 --> 00:06:26.475 Your first one is due May 15 of the year after you form. 00:06:26.475 --> 00:06:28.514 And if I forget? 00:06:28.514 --> 00:06:33.955 There's a $50 penalty. Keep missing it, and the state can forfeit your LLC's right 00:06:34.008 --> 00:06:39.395 to do business, which also blocks it from suing or defending itself in Texas courts. 00:06:40.817 --> 00:06:42.595 So, set a calendar reminder. 00:06:42.595 --> 00:06:44.915 Set a calendar reminder. 00:06:45.623 --> 00:06:50.423 Let's add it up. What does it cost to do all of this yourself in 2026? 00:06:50.423 --> 00:06:55.383 $300 for the filing, or $307 by card. 00:06:55.463 --> 00:07:00.343 The EIN is free, the yearly Public Information Report is free, and below the 00:07:00.399 --> 00:07:03.223 threshold, Texas charges no yearly fee. 00:07:03.356 --> 00:07:06.743 Texas Express is extra, only if you want it faster. 00:07:07.454 --> 00:07:10.814 A lot of people listening would rather not do the filings themselves. 00:07:10.926 --> 00:07:13.294 What are the best ways to have it done for you? 00:07:13.294 --> 00:07:18.014 Here are the three best ways to file in Texas, starting at the top. 00:07:18.151 --> 00:07:22.814 Number one, our pick for Texas, is Mainstay Filing. 00:07:23.027 --> 00:07:29.214 It's $199 a year plus the state fee, and that one price covers more than the other 00:07:29.294 --> 00:07:29.614 two. 00:07:29.614 --> 00:07:32.655 What does that one price actually include? 00:07:32.655 --> 00:07:38.654 Your Certificate of Formation filed, your EIN application, your registered agent 00:07:38.707 --> 00:07:43.694 every year, and your Public Information Report prepared and filed each May. 00:07:43.881 --> 00:07:50.414 It renews at the same $199 a year, so there's no separate agent renewal and no extra 00:07:50.494 --> 00:07:57.134 fee for the yearly report. One note: the checkout also adds the $50 Texas Express 00:07:57.201 --> 00:07:57.854 expedite. 00:07:57.854 --> 00:07:59.853 And number two? 00:07:59.853 --> 00:08:03.454 Number two is TX Registered Agent.org. 00:08:03.641 --> 00:08:10.574 It prepares and files your Form 205 for $199 plus the state fee, and your first 00:08:10.622 --> 00:08:13.534 year of registered agent service is included free. 00:08:13.654 --> 00:08:19.774 After that, its agent is $99 a year, covering the Texas office address, same-day 00:08:19.854 --> 00:08:23.614 scans of legal papers, and reminders for state filings. 00:08:23.734 --> 00:08:26.974 Its checkout also adds the $50 expedite. 00:08:26.974 --> 00:08:28.254 And number three? 00:08:28.254 --> 00:08:33.054 Number three is Texas Registered Agent.ai. 00:08:33.214 --> 00:08:39.934 It has the same offer as number two: $199 plus the state fee, with your first year 00:08:39.987 --> 00:08:42.574 of registered agent service included free. 00:08:42.670 --> 00:08:48.814 From year two, the agent is $99 a year, with same-day scanning of legal papers to an 00:08:48.871 --> 00:08:54.094 online portal, and reminders for franchise tax and the Public Information Report. 00:08:54.194 --> 00:08:57.694 The $50 expedite is added at checkout there too. 00:08:57.694 --> 00:09:03.934 So if two and three are $99 a year from year two, why is Mainstay number one? 00:09:04.228 --> 00:09:06.388 It comes down to the yearly report. 00:09:06.681 --> 00:09:11.988 If you'll file the free Public Information Report yourself each May, numbers two and 00:09:12.041 --> 00:09:17.268 three cost less from year two, at $99 a year for the agent alone. 00:09:17.615 --> 00:09:22.548 If you want the agent and the yearly report handled together, at one price that 00:09:22.615 --> 00:09:24.868 stays the same, that's Mainstay. 00:09:25.611 --> 00:09:28.011 Give us the whole thing in one breath. 00:09:28.011 --> 00:09:34.251 To start an LLC in Texas: choose a name with LLC in it, name a registered agent with 00:09:34.291 --> 00:09:41.211 a Texas street address, file Form 205 on SOSPortal for $300, write a 00:09:41.261 --> 00:09:46.811 company agreement, get your free EIN, and file your Public Information Report every 00:09:46.871 --> 00:09:47.771 May 15. 00:09:47.771 --> 00:09:52.491 Links to all three services, and every official source we used, are in the show 00:09:52.558 --> 00:09:56.891 notes. Thanks for listening to The Business Formation Podcast, and good luck with 00:09:56.923 --> 00:09:58.731 your new Texas LLC.