If you’re thinking about starting a business in Texas, forming a Limited Liability Company (LLC) might be the perfect choice. An LLC combines the flexibility of a partnership with the liability protection of a corporation, making it a popular option for small to mid-sized businesses. Whether you’re launching a tech startup in Austin, opening a boutique in Dallas, or starting a food truck in Houston, setting up an LLC in Texas can give you the structure and security you need to grow. In this guide, we’ll walk you through the process of applying for an LLC in Texas online, covering everything from the requirements to the paperwork—around 1200-1500 words of clear, practical advice to help you get started in 2025.
Why Choose an LLC in Texas?
Before we dive into the how-to, let’s talk about what an LLC is and why it’s a great option for your Texas business.
What Is an LLC?
An LLC, or Limited Liability Company, is a business structure that blends the benefits of a corporation and a partnership. As the owner—known as a member—you get limited liability protection, meaning your personal assets, like your house, car, or savings, are generally safe from the company’s debts and legal issues. This separation is a big draw for entrepreneurs who want to protect their personal finances while running a business. An LLC can have one member (a single-member LLC) or multiple members, giving you flexibility whether you’re going solo or teaming up with others.
Benefits of an LLC in Texas
Forming an LLC in Texas comes with several perks that make it an attractive choice for new business owners in 2025.
Limited Liability Protection
The biggest advantage is the shield it provides for your personal assets. Let’s say you’re running a small coffee shop in San Antonio, and a customer sues you after slipping on a wet floor. If your LLC can’t cover the $50,000 settlement, they can’t go after your personal savings or home—your liability is limited to what you’ve invested in the business. This protection isn’t foolproof—you could lose it if you engage in fraud or mix personal and business finances—but it’s a safety net that sole proprietorships and partnerships don’t offer.
Flexible Taxation Options
In Texas, LLCs have a lot of tax flexibility. By default, an LLC is treated as a pass-through entity, meaning the business’s profits and losses flow directly to your personal tax return. If your LLC makes $80,000 in profit in 2025, you report that on your individual taxes, paying your personal income tax rate—say, 22-24%—plus self-employment taxes of 15.3% for Social Security and Medicare. But you can also choose to be taxed as a corporation, which might save money if your business earns a lot—like $200,000—and you want to leave profits in the company to avoid higher personal tax brackets. Corporate tax rates are 21%, and you’d only pay personal taxes on the salary you take. This choice lets you tailor your tax strategy to your business’s needs.
Easy to Form and Maintain
Texas makes it pretty simple to set up and maintain an LLC, especially with online filing options in 2025. The process is streamlined, and the state’s business-friendly policies mean fewer formalities than a corporation. You don’t have to deal with annual shareholder meetings or a board of directors—just some basic paperwork and fees, which we’ll cover later. This ease of setup and upkeep is a big reason why LLCs are popular for small businesses, from freelancers to mid-sized startups.
LLC vs. Other Business Structures
Compared to a sole proprietorship or partnership, an LLC offers better liability protection. If you’re a sole proprietor running a landscaping business in El Paso and a client sues you for $30,000 over a damaged lawn, they can go after your personal assets—like your car or savings. An LLC keeps those assets safe. Compared to a corporation, an LLC is simpler to manage and gives you more tax flexibility—corporations face double taxation (once at the corporate level, then again on personal income), while LLCs avoid that unless you opt in. For most small to mid-sized businesses in Texas, an LLC strikes the right balance of protection and simplicity.
Requirements for Forming an LLC in Texas
Now that you know why an LLC might be right for your business, let’s go over the requirements to set one up in Texas in 2025.
Choosing a Name
The first step is picking a name for your LLC. It needs to be unique—no one else in Texas can have the same name—and it must include “Limited Liability Company” or an abbreviation like “LLC” or “L.L.C.” For example, if you’re starting a bakery, you might call it “Texas Treats LLC.” Before you settle on a name, check its availability on the Texas Secretary of State’s website using their SOSDirect search tool. In 2025, this search costs $1 per query, and it’ll tell you if another business has already claimed your name. You’ll also want to make sure the name isn’t too similar to an existing one to avoid confusion or legal issues later.