Single-Member LLC in Texas (2026)
Texas allows an LLC with a single member. You create one by filing Form 205, the Certificate of Formation, with the Texas Secretary of State for a $300 filing fee. For federal income tax the IRS treats it as a disregarded entity, and Texas has no individual income tax.
Quick Answer
- Allowed
- Yes - the Texas Business Organizations Code permits a one-member LLC
- Form
- Form 205, Certificate of Formation - Limited Liability Company
- Filing fee
- $300, Texas Secretary of State
- Federal tax default
- Disregarded entity - Schedule C, E, or F with Form 1040
- Texas franchise tax
- Reported to the Comptroller; threshold-based
- Assumed name (DBA)
- Form 503, $25 with the Secretary of State
Texas Permits a One-Member LLC
The Texas Business Organizations Code, chapter 101, governs limited liability companies, and nothing in it requires more than one member. The Secretary of State's own formation guidance notes that "an LLC is always going to have at least one member" - one is the floor, not a problem. The member can be an individual or another entity, and there is no Texas residency requirement.
Texas does not have a separate filing type for single-member LLCs. You file the same document as a multi-member LLC: Form 205, Certificate of Formation - Limited Liability Company, with the Texas Secretary of State. Note the terminology - Texas uses "Certificate of Formation," not Articles of Organization. See Texas Certificate of Formation and Texas Articles of Organization.
The certificate names the LLC, states whether it is member-managed or manager-managed, lists the initial members or managers, gives the registered agent and registered office, and names the organizer. See how to form an LLC in Texas for the full walkthrough.
What It Costs to Form One
The Texas Secretary of State's fee schedule sets the filing fee for a Certificate of Formation for a Texas entity - other than a nonprofit corporation, cooperative association, professional association, or limited partnership - at $300. That is the required state cost to create a single-member LLC, and it is the same whether the LLC has one member or twenty.
| Item | Form | Fee | When |
|---|---|---|---|
| Certificate of Formation (create the LLC) | Form 205 | $300 | One-time, at formation |
| Assumed name certificate (DBA) | Form 503 | $25 | Optional, if trading under another name |
| Federal EIN | Form SS-4 | $0 (free) | One-time |
| Operating agreement | Not filed with the state | $0 to adopt | At formation |
Optional charges - expedited processing, certified copies, a certificate of fact - are listed on the same Secretary of State fee schedule. A commercial registered agent charges its own annual fee, which the state does not set. For the whole picture see how much an LLC costs and Texas DBA filing.
Federal Tax: Disregarded Entity
The IRS default for a one-member LLC is clear: "an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and affirmatively elects to be treated as a corporation." A disregarded Texas LLC files no separate federal income tax return. Its income and expenses go on the owner's Form 1040 - Schedule C for a trade or business, Schedule E for rentals, Schedule F for farming.
The owner pays self-employment tax on net earnings. The IRS states that an individual owner of a single-member LLC operating a trade or business "is subject to the tax on net earnings from self employment in the same manner as a sole proprietorship." Because Texas has no individual income tax, self-employment tax and federal income tax are usually the entire tax picture for a small Texas single-member LLC. Estimate it with the self-employment tax calculator.
One exception matters: the IRS treats a disregarded single-member LLC as a separate entity for employment tax and certain excise taxes. If the LLC has employees, payroll returns are filed in the LLC's own name and under its own EIN even though profit is reported on the owner's Schedule C.
Texas Franchise Tax and the Public Information Report
Texas has no personal income tax, but it does impose a franchise tax administered by the Texas Comptroller of Public Accounts. It is a privilege tax on taxable entities formed in or doing business in Texas, and an LLC - including a single-member LLC - is a taxable entity.
Whether you owe anything depends on your revenue relative to the Comptroller's threshold. Entities below the threshold generally owe no tax, but they still have annual reporting obligations, including an information report that keeps the Comptroller's ownership and address records current. The threshold amount, the rates, and the specific report forms are set by the Comptroller and adjusted periodically, so confirm the current figures on the Comptroller's franchise tax page rather than relying on a number quoted elsewhere.
Franchise tax reporting is a Comptroller obligation, not a Secretary of State one. Texas has no separate Secretary of State annual report for LLCs; the annual franchise tax filings serve that role. See Texas annual report requirements and Texas LLC tax filing.
Liability Protection for a One-Owner LLC
A Texas single-member LLC gives its owner the same statutory shield as a multi-member LLC: the member is generally not personally liable for the LLC's debts and obligations merely by being a member. This is the primary reason a Texas sole proprietor converts to an LLC.
The shield can be lost. Courts disregard the entity when the owner treats it as an alter ego - mixing personal and business funds, paying personal expenses from the LLC account, ignoring the entity in contracts, or leaving it with no assets to meet foreseeable obligations. Single-member LLCs draw these arguments more often than multi-member ones, simply because there is no second owner to enforce discipline.
Three habits do the work: a dedicated business bank account, contracts signed in the LLC's name and in your capacity as member or manager, and written records of contributions and distributions. A Texas operating agreement - Texas calls it a company agreement - supports all three. It is never filed with the state and is not public, but banks, lenders, and buyers ask to see it.
Registered Agent, EIN, and Licenses
Every Texas LLC must maintain a registered agent with a physical Texas street address who has consented to serve and who is available during business hours to receive service of process. A post office box does not qualify. You may act as your own agent if you have a Texas address. See Texas registered agent requirements and the national registered agent guide.
Get a federal EIN from the IRS. It is required once the LLC has employees or owes certain excise taxes, and nearly every bank requires it to open a business account. The IRS issues EINs free of charge - it warns that "you never have to pay a fee" - and limits applicants to one EIN per responsible party per day.
Texas has no single statewide general business license, but many occupations and industries are licensed at the state level, and cities impose their own permits. If the LLC sells taxable goods or services it must obtain a Texas sales and use tax permit from the Comptroller before making sales. See Texas business license requirements.
When an S Election Makes Sense
A single-member LLC can elect S corporation treatment by filing Form 2553. The election splits the owner's take into wages subject to payroll tax and distributions that are not subject to self-employment tax, which can reduce total payroll tax on a profitable business.
The deadline is strict. The Form 2553 instructions require filing "no more than 2 months and 15 days after the beginning of the tax year the election is to take effect, or at any time during the tax year preceding." Missed elections may qualify for relief under Rev. Proc. 2013-30 if Form 2553 is filed within 3 years and 75 days of the intended effective date.
The election also adds cost and obligation: payroll processing, quarterly employment tax returns, an annual Form 1120-S, and a defensible reasonable salary for the owner. It does not change Texas franchise tax treatment. Weigh it in S-corp vs LLC. And if the business ends, close it properly - see how to dissolve an LLC in Texas and check the entity record any time in the Texas business entity search.
Frequently Asked Questions
Can an LLC have one member in Texas?
Yes. The Texas Business Organizations Code permits a limited liability company with a single member, and the Secretary of State uses the same formation document for one-member and multi-member LLCs. The sole member may be an individual or another entity, and no Texas residency is required.
How much does it cost to form a single-member LLC in Texas?
$300 to file Form 205, the Certificate of Formation, with the Texas Secretary of State. That fee is identical for one-member and multi-member LLCs. A federal EIN is free, and an assumed name certificate, Form 503, costs $25 if you will trade under a different name.
How is a single-member LLC taxed in Texas?
The IRS treats it as a disregarded entity by default, so income is reported on the owner's Form 1040, usually on Schedule C, and the owner pays self-employment tax on net earnings. Texas has no individual income tax, but the LLC is a taxable entity for Texas franchise tax reporting with the Comptroller.
Does a Texas single-member LLC pay franchise tax?
It is a taxable entity for franchise tax purposes, but whether it owes tax depends on its revenue relative to the Comptroller's threshold. Entities below the threshold generally owe no tax yet still have annual reporting duties. Confirm the current threshold and forms with the Texas Comptroller of Public Accounts.
Does a Texas single-member LLC need an operating agreement?
Texas calls it a company agreement and does not require you to file it. Adopting one is still advisable: it documents that the LLC is separate from its owner, sets management authority and distribution rules, and is routinely requested by banks, lenders, and buyers during due diligence.
Does a Texas single-member LLC need an EIN?
It is required if the LLC has employees or owes certain federal excise taxes, because the IRS treats a disregarded LLC as a separate entity for those taxes. Even when not required, most banks demand one to open a business account. The IRS issues EINs at no cost, one per responsible party per day.
Related
- Single-member LLC hub
- How to form an LLC in Texas
- Texas Certificate of Formation
- Texas registered agent
- Texas operating agreement
- Texas LLC tax filing
- Texas annual report
- Texas DBA filing
- Texas business entity search
- Dissolve an LLC in Texas
- Legal glossary
Sources
- Texas Secretary of State - Business filing fee schedule ($300 Certificate of Formation; $25 assumed name certificate, Form 503).
- Texas Secretary of State - Formation of Texas Entities FAQs (Form 205; LLC membership).
- Texas Secretary of State - Business organization forms (Form 205, Form 503).
- Texas Legislature - Business Organizations Code chapter 101 (limited liability companies).
- Texas Comptroller of Public Accounts - Franchise Tax (taxable entities; thresholds and reports).
- Texas Comptroller of Public Accounts - Sales and Use Tax Permit.
- IRS - Single Member Limited Liability Companies (disregarded entity; employment and excise tax treated separately).
- IRS - Limited Liability Company (LLC) (federal default classification).
- IRS - About Schedule C (Form 1040) (sole-proprietor and disregarded-entity reporting).
- IRS - Self-Employment Tax.
- IRS - About Form 8832, Entity Classification Election.
- IRS - About Form 2553, Election by a Small Business Corporation (election under section 1362(a)).
- IRS - Instructions for Form 2553 ("no more than 2 months and 15 days after the beginning of the tax year the election is to take effect"; Rev. Proc. 2013-30 relief within 3 years and 75 days).
- IRS - Get an Employer Identification Number (EIN is free; one EIN per responsible party per day).
- IRS - About Form 1120-S, U.S. Income Tax Return for an S Corporation.
- Legal Information Institute (Cornell) - 26 CFR 301.7701-3 (entity classification election).
LegalGlass provides general information for educational purposes and is not legal advice, is not a law firm, and is not a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current amounts with the Texas Secretary of State and the Texas Comptroller of Public Accounts before acting.