Texas Splits the Job Between Two Agencies
Closing a Texas entity takes two agencies. The order is fixed. The Texas Comptroller controls the tax side. It issues the Certificate of Account Status. That certificate says the entity is square with the franchise tax. The Texas Secretary of State controls the corporate register. It accepts the Certificate of Termination, which actually ends the entity, for a $40 fee. The Secretary of State will not finish the termination without the Comptroller's certificate attached. So you start at comptroller.texas.gov, not at the filing form.
What the Comptroller is checking
Every taxable Texas entity files a Franchise Tax Report each year. A Public Information Report goes with it. Both are due May 15. The Comptroller issues the Certificate of Account Status once those filings are current. You also have to pay any tax due. Texas charges no separate annual report fee. So owners assume nothing is running when they stop trading. The reporting obligation is what keeps running. The penalty attaches to the missed report, not to a renewal invoice.
A related document with a similar name
Texas also issues a Certificate of Fact - Status. That is its version of a good standing certificate. It costs $15 standard, or $40 with the $25 expedite for 1 to 2 business day turnaround. Banks and buyers often ask for it during a wind-down. The state issues it only while the entity is current on the Franchise Tax Report. So if a closing bank or counterparty will want one, order the status certificate before the termination goes in.
The Texas Termination Sequence
| Item | Value |
|---|---|
| Form name | Certificate of Termination |
| Filing fee | $40 |
| Tax clearance | Yes, required first |
| Processing time | 5-10 business days |
| Filing agency | Texas Secretary of State |
Four steps. The middle one sets the timetable.
Document the owner decision
You need member or shareholder approval. Under Tex. Bus. Orgs. Code § 11.051 that approval is the event that requires a domestic entity to wind up, and § 11.101 is the certificate of termination filed at the end of it. A Texas LLC with no written agreement falls to the default rules in the Business Organizations Code. Those rules make it member-managed, with per-capita voting. They weight distributions by capital contribution. Corporations need a board resolution recommending termination. Shareholders then vote to approve it. Sign and date the consent before you submit anything.
Request the Certificate of Account Status
File the final Franchise Tax Report and Public Information Report. Pay anything outstanding. Then request the certificate. This leg usually runs two to six weeks. It is why Texas terminations take longer than the $40 fee suggests. Start it on the day the owners approve.
File the Certificate of Termination
Submit the Certificate of Termination with the Comptroller's certificate and the $40 fee. Standard processing runs 5 to 10 business days. Once the state accepts it, the entity's legal existence in Texas ends.
Then clear the tail
Cancel the assumed name certificates. Close local permits and licenses. File the final federal return marked final. Close the EIN account if you will not reuse it. Update the record. End the registered agent engagement in writing. Then document the final distribution to owners.
Forfeiture Risk: What Texas Does to an Abandoned Entity
Texas charges no annual report fee. An abandoned entity therefore produces no renewal invoice. Owners read that silence as closure. The Comptroller reads it as a missed Franchise Tax Report. Each missed report carries a $50 penalty. Unpaid tax accrues at 5% per month. So whatever tax was actually due drives the cost, not a flat fee. Three missed cycles is $150 in penalties before interest. The reporting gap itself also sits on the account.
Keep missing filings and Texas forfeits the entity's right to transact business. After roughly 24 months the state can move to administrative dissolution. Neither outcome replaces terminating. A forfeited entity cannot get the Certificate of Account Status. So it cannot terminate. It cannot get a Certificate of Fact - Status for a bank. And it cannot cleanly complete an asset sale.
Personal guarantees behind leases, equipment finance and credit lines survive whatever the entity's status is. So does the exposure you create by paying remaining cash to owners before you settle known creditors.
Texas sets no statutory deadline on the Application for Reinstatement. That sounds generous until you price it. Reinstating means filing every missed Franchise Tax Report and Public Information Report. You pay the $50 per report and the 5% per month that accrued. Only then do you pay the $40 to terminate.
A new Texas LLC costs a $300 formation fee. So an entity dormant for several years is often not worth reviving. The exception is when the name, contracts or licenses are tied to it. Our Texas reinstatement service quotes the back-filing position before you commit either way.
Dissolve your Texas entity
We prepare the articles of dissolution, handle any clearance the state requires, and file it. Or keep reading and close it out yourself.
Five Mistakes That Derail Texas Terminations
Mistake 1: treating the Secretary of State as the only agency
What it is: going straight to the corporate filing and never touching the Comptroller. Why it happens: the entity was formed at the Secretary of State. So that feels like the place to close it. Consequence: the state rejects the Certificate of Termination for want of the Certificate of Account Status. The $40 is spent. The process restarts behind a two to six week tax queue. Prevention: open the Comptroller file first. Treat the Secretary of State filing as the last step.
Mistake 2: assuming no tax is due means no report is due
What it is: skipping the final Franchise Tax Report because the entity owed nothing. Why it happens: Texas has no annual report fee. So a zero-tax entity looks like it has no filing obligation. Consequence: the Comptroller will not issue the Certificate of Account Status. Each missed report carries its own $50 penalty, whether or not tax was owed. Prevention: file the final report and Public Information Report even at zero. Then request the certificate.
Mistake 3: leaving assumed name certificates on file
What it is: terminating the entity and forgetting the DBA. Texas registers assumed names at both state and county level. That costs $25 with the state and typically $15 to $25 per county. Why it happens: someone else made the county filing years earlier. Consequence: a trading name stays publicly tied to a terminated entity. That complicates a later sale of the name. It also leaves a live public record pointing at former owners. Prevention: list every state and county assumed name certificate. Withdraw each one alongside the termination.
Mistake 4: distributing before notifying creditors
What it is: paying remaining cash to members or shareholders before you notify known creditors in writing. Why it happens: once operations stop, the bank balance looks like a final profit. Consequence: creditors you never notified can pursue the recipients personally for what they received. Prevention: send dated written notice with a claims deadline. Keep proof of delivery. Make no distribution until the deadline has run.
Mistake 5: leaving the agent and other-state registrations live
What it is: terminating in Texas while the registered agent renews and foreign registrations elsewhere stay open. Why it happens: those are separate contracts with separate renewal dates. Consequence: an agent invoice each year for a terminated entity. You also keep live annual report obligations in every state where the entity is still qualified. Prevention: cancel the agent in writing. Then file a withdrawal in every state on the qualification list in the same cycle.
Three Texas Terminations, Step by Step
Example A: a single-member software LLC in Austin
A solo developer stopped contracting in January. The entity owed no franchise tax but still had to report. The sequence ran like this. Sign the single-member consent. File the final Franchise Tax Report and Public Information Report at zero. Request the Certificate of Account Status, which arrived in about four weeks.
Then file the $40 Certificate of Termination with the Secretary of State. The state accepted it in eight business days. Total state cost was $40. Total elapsed time was about seven weeks. The May 15 report date passed with the entity already closed.
Example B: a Houston corporation with four shareholders
An equipment services corporation sold its service contracts and wound down. It had four shareholders and two officers. The board adopted a resolution recommending termination. The shareholders then voted to approve it. Both went into the minute book, because two shareholders were passive investors. The company had missed one Franchise Tax Report. That added the $50 penalty plus 5% per month on the tax ultimately assessed.
The bank required a Certificate of Fact - Status to close the operating account. The company ordered it at $15 while the entity was still current. Add the $40 termination fee and the direct state cost came to $105, plus the assessed tax. The whole thing took about nine weeks.
Example C: a Dallas LLC also registered in Wisconsin and Utah
A five-member consulting LLC had foreign registered in Wisconsin and Utah during an expansion. Terminating in Texas alone would have left both live. Each runs its own meter. Wisconsin bills LLCs a $25 annual report with a $5 per month late penalty. Utah bills an $18 annual renewal with a $10 late penalty.
The members approved. They cleared the Comptroller. They filed the $40 Certificate of Termination. They withdrew the state and county assumed name certificates. And they filed withdrawals in Wisconsin and Utah in the same month. Running the out-of-state registrations alongside the Texas filing made the closure complete rather than partial.
How File.Business Handles Texas Termination
We draft the member or shareholder consent. We prepare and file the final Franchise Tax Report and Public Information Report. We request the Certificate of Account Status from the Comptroller. We file the Certificate of Termination with the Secretary of State and the $40 fee.
We order any Certificate of Fact - Status the bank needs while the entity is still current. We withdraw state and county assumed name certificates. And we file withdrawals wherever the entity is foreign registered. See the Texas dissolution service or the general dissolution page. Try the compliance service if other entities in the group keep trading.
Texas dissolution FAQ
How do I dissolve an LLC in Texas?
File the final Franchise Tax Report. Get a Certificate of Account Status from the Texas Comptroller. Then file the Certificate of Termination with the Texas Secretary of State and the $40 fee. File.Business handles both agencies as a single dissolution project.
How much does it cost to dissolve a business in Texas?
The Secretary of State fee is $40. Add anything owed on the franchise tax side. That includes a $50 penalty for each missed Franchise Tax Report. It also includes 5% per month on unpaid tax.
What is the Certificate of Account Status and why do I need it?
It is the Texas Comptroller document that confirms the entity is current on its franchise tax obligations. The Secretary of State will not complete a termination without it. Getting it usually takes two to six weeks.
How long does a Texas termination take?
The Secretary of State filing runs 5 to 10 business days once you hold the Comptroller certificate. The tax leg adds two to six weeks. So plan on six to nine weeks end to end.
What happens if I just stop filing in Texas?
Each missed Franchise Tax Report carries a $50 penalty. Unpaid tax accrues at 5% per month. Keep missing them and the state forfeits your right to transact business. After roughly 24 months comes administrative dissolution. That blocks the termination path until you bring the account current.
Do I need to cancel my Texas DBA separately?
Yes. Texas records assumed names at both state and county level. That costs $25 with the state and typically $15 to $25 per county. Terminating the entity does not withdraw them. Withdraw each certificate where it was filed.
Dissolve your Texas entity
We prepare the articles of dissolution, handle any clearance the state requires, and file it. Or keep reading and close it out yourself.
Filing in Texas specifically: Texas dissolution filing covers the current fee, the Comptroller step, and the exact document the Secretary of State expects.
This guide is written from the official sources below. Fees, forms, and deadlines change. Confirm the current requirement with the agency before you file.
Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.
