How to Open a Texas LLC for Professional Services

This is an education guide, not legal advice. Some licensed professions in Texas have special rules and may require a specific entity type or board approval. Always confirm requirements with your licensing board and, if needed, an attorney.

Step 0: Be clear on your professional service and licensing rules

Before you even touch a form, get very clear on:

• What service you provide. (Example: physician, therapist, nurse practitioner, CPA, consultant, engineer, designer, etc.)
• Where you’re licensed. (Which state board regulates you?)
• How you’ll earn money. (Direct patient care, remote consulting, clinic contracts, coaching, etc.)

For certain professions, Texas may require a professional entity structure or may limit who can be an owner. The last thing you want is to file the wrong type of entity and then discover your licensing board doesn’t accept it.

Step 1: Understand that “LLC” and “how you’re taxed” are not the same

When I explain this to clients, I split it into two layers:

• Legal shell: The Texas LLC you form with the Secretary of State.
• Tax treatment: How the IRS and Texas see that LLC for tax purposes.

A single-member Texas LLC can usually be taxed as:

• A disregarded entity (sole proprietor on Schedule C), or
• Later, by election, as an S corporation (with reasonable compensation issues).

Multi-member LLCs are usually taxed as partnerships unless another election is made.

In this guide, we’re focusing on the formation process itself. The tax strategy (including whether an S corporation election makes sense and when) is usually a separate conversation.

Step 2: Choose a name and check availability

Next, you’ll want to decide what you want your LLC to be called. In Texas, your LLC name needs to:

• Be distinguishable from existing entities on file, and
• Include an appropriate LLC designator (like “LLC” or similar wording).

I usually ask clients to come up with:

• One main name idea, and
• At least one backup in case the first choice is taken.

You’ll check name availability through Texas’s online systems or by working with a professional who can search before you file. If the name is too close to another entity, your filing can be rejected.

Step 3: Decide who will be your registered agent

Every Texas LLC needs a registered agent and a registered office in the state. This is the person or company that receives official legal and state mail for your LLC.

Options usually include:

• You, at a physical Texas address you’re comfortable putting on public record.
• Your practice location, if appropriate and allowed.
• A professional registered agent service, which keeps your personal address off the public filing and helps ensure delivery.

I often walk clients through the privacy and practicality tradeoffs. In some professional service situations, separating your home address from your public record is worth it.

Step 4: Gather the information needed for your Certificate of Formation

To form a Texas LLC, you’ll file a Certificate of Formation with the Texas Secretary of State. Whether you file online or by mail, you’ll typically need:

• Your LLC’s legal name.
• Whether this is a professional service LLC and what profession it covers.
• The registered agent’s name and address.
• The LLC’s principal office mailing address.
• Whether the LLC will be member-managed or manager-managed.
• The name of the organizer (person signing and submitting the form).
• Any special provisions your attorney wants included (if applicable).

Many of my professional clients are surprised that the form itself is not very long. The complexity comes from choosing the right options and understanding what you’re signing — not from the number of pages.

Step 5: File with the Texas Secretary of State and pay the state fee

Once you’ve gathered the details, you or your professional can:

• File the Certificate of Formation online through Texas’s systems, or
• Submit it by mail or courier with the required fee.

Pay attention to:

• Spelling and addresses. Errors can slow down approval.
• Effective date. You may be able to choose an effective date if you don’t want it to start immediately.
• Email or mailing details. So you actually receive your approval notice and file-stamped copy.

After approval, your LLC legally exists in Texas. But you’re not done yet.

Step 6: Get an EIN and set up your internal structure

Next, you’ll want to get an Employer Identification Number (EIN) for the LLC from the IRS. Even if you’re a single owner and don’t have employees yet, an EIN:

• Helps keep your SSN off W-9s and contracts, and
• Is usually required to open a business bank account.

At the same time, I strongly recommend you put in place:

• An operating agreement (even if you’re the only owner),
• Clear internal notes on:
  • Who owns what percentage,
  • How profits and losses will be handled, and
  • What happens if you add partners later.

For professional service providers, this becomes even more important because contracts with clinics, hospitals, or agencies may refer directly to your entity structure.

Step 7: Open a business bank account and separate your money

Once you have:

• The approved Certificate of Formation, and
• Your EIN,

you can open a business bank account in the LLC’s name. From here forward, the goal is:

• Business money in the business account,
• Personal money in your personal account.

Mixed accounts and personal spending from the business account can weaken the separation you’re trying to build. I remind professional clients that:

“The LLC is part legal, part behavioral. If you don’t treat it like a separate business, nobody else will.”

Step 8: Register with the Texas Comptroller (franchise tax)

Texas doesn’t have a traditional state income tax, but it does have a franchise tax system that applies to most entities, including LLCs. Even if your revenue is low enough that you don’t owe franchise tax, you may still need to file annual reports to keep your LLC in good standing.

That’s where your Texas Comptroller account comes in.

I recommend that once your LLC is formed, you:

• Create an online account with the Texas Comptroller, and
• Assign your new LLC’s franchise tax account to your login.

I’ve written a separate how-to that breaks this out step by step: how to create your Texas Comptroller account and connect your franchise tax .

Once that account is set up correctly, it becomes much easier to file your annual “no tax due” or informational reports on time.

Step 9: Keep up with your annual Texas franchise filings

After your first year, you’ll have ongoing responsibilities, including:

• Annual franchise tax filings (even if you owe nothing), and
• Keeping your registered agent and address up to date.

I have a separate education article that focuses entirely on:

• How to file your annual Texas franchise/no-tax-due report for LLCs under the current revenue threshold, and
• How to keep your Texas LLC active and in good standing each year.

You’ll see that guide linked directly from the Comptroller account setup article once that one is live.

When does it make sense to get professional help?

Some Texas professionals can absolutely file their own LLC and do a clean job of it. Others:

• Have multiple clinics or contracts,
• May need to coordinate with a licensing board, or
• Want to pair entity formation with a tax plan (for example, considering an S corp election and reasonable compensation at the right time).

In my firm, the conversations don’t start with “Do you want the silver package or the gold package?” They start with:

“Tell me how you actually make money, what your risks are, and what you want your next 3–5 years to look like.”

From there, we match the entity structure and tax plan to your real life, not the other way around.