Texas LLC Formation Lawyers
Setting up a limited liability company (LLC) is an excellent way to isolate assets, manage taxes, reduce liability, and protect investments for your small business in Texas. Whether you’re creating a new LLC for your private company or restructuring an existing business, Barnett & Leuty, PC’s Austin LLC attorneys are here to guide you through the process.
What Is a Limited Liability Company (LLC)?
An LLC is a business structure designed to protect the business owners, also called members, from liability related to their business. With an LLC in place, your private property, such as your home or vehicle, remains protected from debt collection or lawsuits brought against your company, per Texas BOC § 101.114.
There are several advantages to registering your Texas LLC.
Reduced Tax Burden
In addition to reducing members’ personal liability, Texas law allows LLCs registered as an S Corporation to use pass-through taxation. With this method, income from the business goes straight to the owner’s personal accounts as individual income. Because Texas has no personal income tax, owners of LLCs owe no taxes to the state on their profits, though they still must pay federal personal income tax.
LLCs in Texas may register with the IRS to pay federal taxes as either an S Corporation or a C Corporation. S corps typically pay no corporate taxes. Business revenue goes straight to the owners and is taxed as income.
C corporations pay federal corporate taxes on company revenue, and shareholders pay individual income tax on dividends they receive from the company. An LLC attorney in Texas can explain the advantages of each option and help you decide which works best for your business.
No Renewal Fees
Unlike other states, Texas LLCs do not pay annual renewal fees for business registration. Once it’s registered with the Texas Secretary of State, your company is set for life.
That said, any Texas business, including LLCs, must file an annual report with the Texas Comptroller accounting for all profits. Companies that make more than the annual “no tax due” limit must pay a state franchise tax. The no-tax threshold is established each year by the state comptroller. It’s important to remember to file a report every year by May 15, even if you don’t owe taxes on your business revenue.
Flexible Management
LLC members benefit from greater management flexibility. The LLC can have multiple owners, and those owners can manage the business themselves, or hire managers to handle the day-to-day tasks.
In addition, owners of a Texas LLC do not have to be individuals. An owner can also be a corporation, trust, or partnership.
Why Work With an LLC Attorney?
The process of establishing an LLC in Texas can be complicated. Everything from registering a name to filing a Certificate of Formation requires numerous small steps, and even minor mistakes can set the creation of your company back by weeks or months. This is where an LLC formation attorney comes in.
You can rely on Barnett & Leuty, PC, to:
- Identify the best LLC option for your business
- Help you decide on an appropriate name and management structure
- Select a Texas registered agent
- Prepare and file a Certificate of Formation with the Texas Secretary of State
- Establish an operating agreement
- Secure your LLC’s federal employer identification number (EIN)
- Ensure that you meet all business licensing, registration, and permit requirements
Not every business is suited to the LLC structure, so it’s in your interests to consult with an LLC attorney in Austin before you begin the process. The business lawyers at Barnett & Leuty, PC, are here to help.
Barnett & Leuty, PC: Your Texas LLC Law Firm
Since 1995, Barnett & Leuty, PC, has provided personalized legal support for business owners in Austin and throughout central Texas. Our LLC lawyers in Austin understand the complexities of Texas business law. We have the experience and resources to assess your business needs and guide you through the registration process. We can also handle your annual filings and ensure that you meet requirements for tax reporting and payment each year.
We know how much small business owners hate being nickel-and-dimed, which is why we offer our services for a flat fee. When you hire us, you can expect comprehensive legal representation that goes beyond the strict per-hour legal services of the guys downtown. Contact our Austin business law attorneys today to learn more.
Frequently Asked Questions About Texas LLC Formation
How much does it cost to form an LLC in Texas?
The Texas Secretary of State charges a $300 filing fee for the Certificate of Formation, plus smaller fees for optional services like a certified copy or name reservation. Attorney fees for full-service LLC formation vary based on the complexity of your business and ownership structure. Barnett & Leuty, PC, offers LLC formation for a flat fee so you know your total cost upfront. Contact our office for a quote specific to your business.
How long does it take to form an LLC in Texas?
Once your Certificate of Formation is filed, the Texas Secretary of State typically processes standard filings within a few business days, though times can vary during high-volume periods. Expedited processing is available for an additional fee. Working with an attorney can help you avoid the naming and paperwork errors that most often slow the process down.
Do I need an operating agreement for my Texas LLC?
Texas law does not require an operating agreement, but it is strongly recommended. This document sets out ownership percentages, management responsibilities, and how profits and disputes are handled among members. Without one, your LLC defaults to the state’s general statutory rules, which may not reflect how you and your co-owners actually intend to run the business.
Can I form a single-member LLC in Texas?
Yes. Texas allows a single person to own and operate an LLC. A single-member LLC still provides the same liability protection as a multi-member LLC, separating your personal assets from business debts and legal claims.
Do I need a registered agent for my Texas LLC?
Yes. Every Texas LLC must designate a registered agent with a physical street address in Texas who is available to accept legal documents on the company’s behalf. Barnett & Leuty, PC, can help you select a registered agent as part of the formation process.
What happens if I miss my LLC's annual report deadline?
Texas LLCs must file an annual report, known as the Public Information Report or Ownership Information Report, with the Texas Comptroller by May 15 each year, even if no franchise tax is owed. Missing this deadline can result in penalties and, eventually, forfeiture of your LLC’s right to do business in the state. Our attorneys can help manage these filings so your LLC stays in good standing.
I've heard that forming a Wyoming or Nevada LLC has advantages over Texas. As a Texas business owner, should I form my LLC in another state?
For most Texas business owners operating in Texas, forming a Wyoming or Nevada LLC offers no meaningful tax or operational benefit and usually adds cost and paperwork. Here is what to weigh.
Foreign registration is unavoidable. If your business is physically in Texas, has offices here, or serves customers here, a Wyoming or Nevada LLC still has to register as a foreign entity with the Texas Secretary of State. You end up paying formation and annual fees in the state of formation and Texas foreign-entity fees on top.
Franchise tax follows the activity, not the paperwork. The Texas franchise tax applies to entities doing business in Texas regardless of where they were formed. For the 2026 and 2027 report years, the no-tax-due threshold is $2,650,000 in annualized total revenue. If your business is at or below that number, you owe no franchise tax whether the LLC is Texas, Wyoming, or Nevada. If you are over, the tax is owed either way. Personal income tax follows where the owner lives and where the income is earned, not where the LLC was filed.
Privacy is thinner than it sounds. Wyoming and Nevada allow owners to keep their names off the initial public filing through a registered agent. Once you register the same entity as a foreign LLC in Texas, ownership information often becomes part of the Texas record anyway.
When an out-of-state LLC does make sense. Business owners with a purely location-independent operation, out-of-state real estate holdings, or specific investor or asset-protection structures may have legitimate reasons to form outside Texas. Those are cases to talk through with counsel before filing, not after.
For most Texas-based owners, a domestic Texas LLC is simpler, cheaper to maintain, and provides the same practical liability protection. If you are weighing the choice for your specific situation, we can walk through it with you.
Contact Barnett & Leuty, PC, to speak with one of our attorneys
Barnett & Leuty, PC
(512) 336-1529
info@civil-law.com
Barnett & Leuty, PC — Our Blog
7 Unique Benefits of Having an LLC in Texas
From pass-through taxation to personal liability protection, learn the key advantages of forming a Texas LLC. Guidance from Austin business attorneys at Barnett & Leuty.
Can a Trustee Be Held Personally Liable?
If you are ever appointed a trustee, you will have a fiduciary duty to act on behalf of the beneficiaries. If you breach that duty, you may find yourself in court. Being a trustee is not an easy job. Trustees must follow the terms of the trust and are accountable to...
How to Choose the Right Business Entity for Your Company
Business Entity Formation Business entities can take many different forms - sole proprietorships, partnerships, limited liability companies (LLC), and corporations are the most common ones. Although they are simple and have the most flexibility and least regulation,...
Using a Trust to Help Fund the Payment of Estate Taxes
Consider this dilemma faced by a high-net worth individual: He doesn't want his heirs to be burdened with estate taxes so he takes out a life insurance policy to cover the tax bill. But then the proceeds of the insurance policy wind up as part of his estate — only to...
Would a Revocable Trust be Beneficial to You?
When developing an estate plan, a revocable trust can provide benefits that, in some cases, significantly outweigh the cost of setting one up. A revocable trust offers great flexibility, can save money by avoiding probate, provides privacy about your finances and it...
How to Choose the Right Legal Structure for Your Business
Choosing the appropriate legal form for a business is one of the first issues most entrepreneurs face. It is an important decision at the formation stage and also as a business grows. Sole proprietorships are generally the easiest. Corporations offer some different...