When you search Google for anything related to how to start an LLC in Texas you’ll get hit with a block of ads for LLC filing services.
These services will offer you stuff like: file your LLC for you, EIN Federal Tax ID Number, registered agent service, corporate seal and kit, rush or expedited processing, etc.
The way they try to charge you varies. Sometimes its in a package and other times these are separate charges.
Let’s run through a few of these and see if they’re worth it:
File your LLC for you: You’re going to have to answer the questions necessary on Form 205 anyways – they’ll ask you these so unless you want to pay $100 for them to mail it off or file online for you, you don’t need this.
My Texas LLC Guide at the bottom of this post will walk you through the form step-by-step if you need help beyond the instructions on Form 205.
EIN Federal Tax ID Number: This one is the ultimate. I’ve seen an EIN charged from $60-$69. It’s completely free to get and you can get it online in 5 minutes – as in right now. You can apply on IRS.gov.
Registered Agent Service: You can pay them $100/year to be your registered agent or you can go to TexasRegisteredAgent.net and pay $39 a year. I use these guys and no they didn’t pay me to say this.
You can also be your own registered agent. I generally recommend against this and in my guide you can see why but it is an option and it’s free.
Processing Fee: You never want to pay a processing fee unless you have to. Pure fluff.
Rush or Expedited Filing: Per the Texas Secretary of State website:
Expedited service means that the documents are processed before other documents received the same day and the filing party is notified in writing, by email or by telephone of the filing disposition. Our goal is to provide notification of filing disposition by the close of business the first business day following the day of receipt.
The Corporations Section expedites the processing of business organization documents for a fee of $25 per document and expedites the processing of certified copies and certificates for a fee of $10 per certified copy or certificate.
I don’t know 100% but I’d bet money all these “rush” services are doing is ordering the expedited service and charging you extra for it.
Corporate Seal and Kit: Binder, stock certificates, seals, etc. You don’t need any of this fluff. None of it is legally required and none of it is material to your LLC. What you need to do is keep good records and keep your LLC completely separate from your personal dealings. Easy $50 – $100 saved right here.
Operating Agreement: Here is the one thing of value that a commercial service can offer you: a personalized operating agreement. The problem is they’re not going over your LLC with you and writing a fully customized operating agreement for your company.
What they’ll do is have you fill out a form and then put your answers in the blanks of their standard template and then spit out a “personalized” operating agreement.
This is a decent option because you need an operating agreement and having a “fill in the blank” template is better than having none at all. Plus, these templates have probably been vetted to meet the minimum requirements.
However, you can fill in the blanks or customize an operating agreement yourself. Here is Attorney Lee Philips, a renowned asset protection professional, free template.
You can also buy Nolo’s Form Your Own Limited Liability Company for $26 and it will provide you standard forms at the end of the book.
If you want a business attorney to go through creating a completely custom operating agreement with you, try Craigslist and see if there aren’t some inexpensive options for less than $500. Of course, the more your company is worth, you’ll want to hire more experienced, well-known attorneys. Sometimes they’re on Craigslist but many times they’re not.
I’ve also seen that LLC filing services are trying to get you roped into extraneous monthly or yearly subscriptions. Be very leery of these.
Remember, all you’re trying to do is form an LLC. How did you get so off the beaten path with so many unnecessary extra costs?
To file with the Texas SOS, the filing fee is $300, $308.10 if you go through SOS Direct (meaning you file online). A registered agent will cost you $39/yearly (or free if you have something arranged already). And you can create your operating agreement after you file.
If you’re staring at a shopping cart with $750+ staring at you, start to evaluate how many of these add-ons you really need. You can save $100s of dollars right off the bat and put that towards your capital contribution for the LLC’s bank account.
My LLC guide is an instant download that helps DIYers walk through filing their LLC. I explain all the questions/blanks in Form 205 in plain English with full details and explanations so even beginners or dummies can register with the state.
At the end of the guide, I also explain why filing for an LLC is not enough to limit your liability. You have to comply with governmental formalities and maintain your LLC as completely separate from your person (or anyone else).
I created The Texas LLC Guide because so many people were paying these formation services merely out of fear and uncertainty. Form 205 looks complicated and the process of filing seems intimidating – but it’s not once all the steps are laid out for you!