Side-by-side comparison of Limited Liability Company and C Corporation for Texas businesses. See costs, tax treatment, and which structure fits your situation.
| Feature | LLC | C-Corp |
|---|---|---|
| Filing fee (Texas) | $300 | $300 |
| Annual fee | $0/yr | $0/yr |
| Liability protection | Yes | Yes |
| Self-employment tax | On all profit | Salary only |
| Formation complexity | low | high |
| Ongoing complexity | low | high |
| Can raise funding | Limited | Yes |
Pros
Cons
Pros
Cons
⚠Franchise (margin) tax applies to businesses with revenue over $2.47M
⚠Franchise tax rate is 0.375% for retail/wholesale or 0.75% for other businesses
⚠No annual report but must file a Public Information Report with franchise tax
Our free quiz calculates your actual tax burden under each entity type based on your income and Texas tax rates.
Take the QuizLimited Liability Company: Liability protection with pass-through taxation. The most popular choice for small businesses. C Corporation: A separate legal entity with its own tax rate. The standard structure for VC-funded startups. In Texas, LLC filing costs $300 and C-Corp costs $300.
C-Corp is generally better for taxes at higher incomes because you only pay self-employment tax on your salary, not distributions. LLC pays self-employment tax (15.3%) on all profit. Use our free quiz for exact numbers.
LLC filing fee: $300, annual fee: $0/year. C-Corp filing fee: $300, annual fee: $0/year.
Disclaimer
This comparison is for educational purposes only and does not constitute tax, legal, or financial advice. Filing fees, tax rates, and regulations may have changed since this data was compiled. Verify all information with the Texas Secretary of State and consult a qualified CPA or tax attorney before making entity selection or tax election decisions.
Affiliate disclosure: Formation service links on this page are affiliate links. We may earn a commission at no extra cost to you. This does not influence our comparisons or recommendations.