How to Form an LLC in Texas in 2026

Texas is one of the most popular states in the country for starting a business, and for good reason. No state income tax, a massive consumer market, a business-friendly regulatory environment, and affordable formation costs make Texas a great home for ecommerce LLCs. At E-Commerce Paradise, I work with entrepreneurs all over the US and internationally, and Texas-based founders are consistently among the most active in building high-ticket dropshipping stores.

In this guide I’m going to walk you through exactly how to form an LLC in Texas in 2026, what it costs, what the ongoing obligations are, and which formation services I recommend. Whether you’re a Texas resident or considering Texas for your LLC, this guide has everything you need.

Why Form an LLC in Texas?

No state income tax. Texas has no personal state income tax, which means the pass-through income from your LLC doesn’t get hit at the state level. For a profitable ecommerce store this can mean significant savings compared to states like California or New York.

Business-friendly environment. Texas consistently ranks among the most business-friendly states in the US. The regulatory environment is light, and the state actively courts business formation at every level.

Reasonable franchise tax. Texas has a franchise tax (the “margin tax”) but most new ecommerce stores won’t owe anything until annual revenue exceeds approximately $2.47 million. Compare that to California’s $800 minimum franchise tax that hits you from day one.

Step-by-Step: How to Form an LLC in Texas

Step 1: Choose Your LLC Name

Your Texas LLC name must be unique in the state and must include “Limited Liability Company,” “LLC,” or “L.L.C.” You can check name availability using the Texas Secretary of State’s SOSDirect business search. If your preferred name is available, you can reserve it for 120 days with a $40 fee while you prepare your formation documents.

Step 2: Appoint a Registered Agent

Every Texas LLC must have a registered agent with a physical Texas street address who is available during normal business hours. Most online entrepreneurs use a professional service to keep their personal address off public records and ensure documents are never missed. Northwest Registered Agent is my top pick — their Texas service is excellent and they use their own address on your filings for full privacy. Read my Northwest Registered Agent review for the full breakdown.

Step 3: File a Certificate of Formation

The Certificate of Formation (Form 205) is the official document that creates your Texas LLC. Filed with the Texas Secretary of State through the SOSDirect online portal, the state filing fee is $300. Processing typically takes 3 to 5 business days online. Formation services like Bizee and LegalZoom can handle this filing on your behalf, reducing errors and speeding up the process.

Step 4: Create an Operating Agreement

Texas doesn’t legally require an operating agreement, but every LLC should have one. It establishes your business as a real, separate entity and protects your liability protection if challenged. Formation services like MyCompanyWorks include customized operating agreement templates. I cover why this matters in the business formation checklist for high-ticket dropshippers.

Step 5: Get Your EIN

Apply for your Employer Identification Number free at the IRS website, or have your formation service handle it. You need it to open a business bank account and set up payment processing.

Step 6: File the Annual Public Information Report

Texas LLCs must file an annual Public Information Report with the Texas Comptroller by May 15th each year. This is filed alongside your franchise tax return and keeps your business information current with the state. Missing this deadline can result in your LLC losing its good standing.

Step 7: Open a Business Bank Account

Once your LLC is formed and your EIN is issued, open a dedicated business bank account immediately. Never mix personal and business finances. Check out my guide on the best business bank accounts for high-ticket dropshipping to find the right one.

Step 8: Get a Texas Sales Tax Permit

If you’re selling physical products to Texas customers, you need a Texas Sales and Use Tax Permit from the Texas Comptroller. This is free to obtain. I walk through this in my guide on how to get a seller’s permit for dropshipping.

How Much Does It Cost to Form an LLC in Texas?

Certificate of Formation: $300
Registered agent service: $100 to $300 per year
Formation service fee: $0 to $300 depending on the service
Annual franchise tax: $0 for most new stores under the revenue threshold
Public Information Report: No filing fee

Total first-year cost is typically $400 to $900. Compared to California’s $800+ in franchise tax alone, Texas is very affordable to maintain long-term.

Best LLC Formation Services for Texas

Bizee — Best Free Option

Bizee offers free LLC formation where you pay only the $300 Texas state fee. They handle all the paperwork, include a free registered agent for the first year, and provide an operating agreement template. Read my full Bizee review for everything included.

LegalZoom — Best for Legal Support

LegalZoom is the most recognized name in online legal services. Their premium plans include attorney access for ongoing legal questions. See my LegalZoom review for full pricing details.

Northwest Registered Agent — Best for Privacy

Northwest Registered Agent is my top pick if you’re working from home and want your personal address kept off public Texas records. Their Texas registered agent and formation service are both excellent.

MyCompanyWorks — Best for Fast Turnaround

MyCompanyWorks has a strong reputation for fast processing and responsive customer support. Check out my MyCompanyWorks review for the full breakdown.

LegalShield — Best for Ongoing Legal Protection

LegalShield gives you monthly attorney access for business and personal legal questions. Read my LegalShield review to see if it fits your needs.

Texas LLC vs Wyoming LLC for Online Businesses

If you live and operate in Texas, forming in Texas is almost always right. If you’re running a purely online business with no physical Texas presence, Wyoming is worth comparing: $100 filing fee vs $300, no franchise tax at any revenue level, and stronger privacy laws. However, if you live in Texas, registering a Wyoming LLC and then registering it as a foreign LLC in Texas can actually cost more and add complexity. I break this down fully in my guide on the best states to form an LLC.

Frequently Asked Questions: Texas LLC Formation

How long does it take to form an LLC in Texas?

Online filings are typically processed in 3 to 5 business days. Mail filings can take 2 to 3 weeks. Expedited processing is available for an additional fee, and formation services like Bizee can handle expedited filings on your behalf.

Do I need a Texas business license in addition to my LLC?

Texas has no general state business license requirement. However, certain industries require specific licenses and your city or county may have local requirements. Check with your local government for what applies to your business type.

Can I be my own registered agent in Texas?

Yes, if you have a physical Texas street address and are available during normal business hours. Most online entrepreneurs use a professional service like Northwest Registered Agent for privacy and convenience.

What is the Texas franchise tax and do I need to worry about it as a new store?

The Texas franchise tax applies to businesses with annual revenue above approximately $2.47 million. Most new ecommerce stores won’t hit this threshold initially, so your only obligation is filing a No Tax Due Report annually. As your store scales, browse my high-ticket niches list to understand what kind of revenue is possible and plan accordingly with a CPA.

Can a non-Texas resident form a Texas LLC?

Yes. You don’t need to be a Texas resident. You will need a registered agent with a physical Texas address. Non-US residents can also form a Texas LLC. See my guide on the best LLC services for non-US residents for more detail.

Build Your Texas LLC the Right Way

Texas is a genuinely great state for forming an LLC. The no income tax advantage, reasonable franchise tax structure, and business-friendly environment make it one of the best states for ecommerce entrepreneurs who want to stay legally compliant without excessive overhead.

To get started, use Bizee’s free formation plan to cover the $300 state fee with no service markup. Pair it with Northwest Registered Agent for Texas registered agent service if privacy matters. And if you want attorney access alongside formation, LegalZoom or LegalShield are both worth considering.

Once your Texas LLC is in place, check out my guide on how to find the best suppliers for high-ticket dropshipping, browse the EP supplier directory, and join the E-Commerce Paradise community. For the full business-building roadmap from LLC to your first sale, the E-Commerce Paradise Masterclass covers everything.

According to the Texas Secretary of State’s business formation resources, getting your formation documents right from the start avoids costly amendments and keeps your LLC in good standing. Do it right from day one and your legal foundation will never hold you back.