Are you a veteran looking to start your own business in Texas? If so, we have great news for you! Fortunately, Texas has launched a new program that offers veterans the opportunity to form Limited Liability Companies (LLCs) for free. This program is a significant step towards supporting veteran entrepreneurs and helping them establish their own businesses.
In this post, we'll provide you with all the information you need to know about the Free Texas LLC for Veterans program.
Free Texas LLC for Veterans with Senate Bill 938
Senate Bill 938 allows veterans in Texas to create their own businesses without paying the $300 LLC filing fee and to be exempt from the Texas franchise tax, a "privilege tax" for doing business in Texas, for the first five years.
Initially, Texas LLCs were made free for veterans by Senate Bill 1049, applicable to companies formed between January 1, 2016, and December 31, 2019. However, with the new law passed just before the New Year in 2022, eligible veterans can still form their LLCs for free for companies formed between January 1, 2022, and December 31, 2025.
So, what are the requirements for the SB 938 Exemption?
Requirements for the Senate Bill 938 Exemption
To form your LLC for free and be exempt from franchise tax for 5 years, veterans must meet the following criteria:
Veterans must own 100% of the LLC (no non-veteran Members allowed)
Every LLC Member must be an honorably discharged veteran
You must certify that every LLC Member is a veteran of a branch of the US Armed Forces
Your LLC must be approved between January 1, 2022 and December 31, 2025
SB 938 Exemption FAQs
What if I’m still on Active Duty?
What if I don’t have an Honorable Discharge designation?
What if I’m a veteran of the Texas National Guard?
Do I have to live in Texas?
How many Members have to be in my LLC?
Now that you have a better understanding of the program and its requirements, let’s talk about how to form a Texas Veteran LLC for $0.
Here’s a step-by-step guide:
Get a copy of your DD-214 or other proof of honorable discharge.
Request a Verification Letter from the Texas Veterans Commission.
Fill out Form 05-904 from the Texas Comptroller.
Fill out the Texas LLC Certificate of Formation from the Secretary of State.
Upload the Verification Letter, Form 05-904, and Certificate of Formation via SOSUpload.
Note: Please allow the Texas Veterans Commission 30 business days to return your Letter of Verification of Veteran’s Honorable Discharge.
Once the Secretary of State receives your Texas veteran LLC filing, it will be approved within 8-10 business days, you will now be exempt from franchise tax for the first 5 years. However, you still have to file a No Tax Due Report every year.
We hope that this guide has helped you get started to form your LLC for free! If you have any questions or need assistance, please don't hesitate to contact the Texas Veterans Commission or the Texas Secretary of State.
Good luck on your entrepreneurial journey!
I recently used this resource for my second business. I wish I'd known about this before I started my notary business last year.