Thanks to Senate Bill 938, veteran-owned LLCs are once again free to form in Texas. In this article, I’ll detail the new law and outline how a new 100% veteran-owned Texas LLC is entitled to a waiver (or refund) of the $300 state filing fee.

Please note, we have a separate article that outlines various benefits, opportunities, and advantages that come with being subsequently certified as a veteran-owned business (51% or more owned by veterans). 

For purposes of the Texas state filing fee waiver and franchise tax exemptions, a new veteran-owned business is one that started in 2022 or later, and is 100% owned by honorably discharged veterans.

The Texas Tax Code 171.0005 (as amended by Senate Bill 938) defines a "new veteran-owned business" as a new (formed in 2022 or later) business in which each owner is a natural person who: (1) served in and was honorably discharged from a branch of the United States armed forces; and (2) provides verification to the comptroller of the person's service and discharge.

A "new business" is a taxable entity that: (1) is chartered or organized or otherwise formed in Texas; and (2) first begins doing business in this state on or after January 1, 2022.

A new veteran-owned business is entitied to a waiver (or refund) of the $300 state filing fee.

In order to form an LLC for free, the veteran-owned business will need to prove that the LLC is 100% owned by honorably discharged veterans.  This is accomplished by showing the Texas Secretary of State two documents (1) a Letter of Verification of Veteran’s Honorable Discharge for each member/owner; and (2) a Certification of New Veteran-Owned Business (Comptroller Form 05-904).

To initiate the verification process, visit the Veteran Entrepreneur Program's (VEP) secure web page to complete the questionnaire, and upload the required verification documents. Each veteran owner must provide their DD-214 (must show Character of Service found on Service Copy 2 or Member 4). Legal documentation will be required when the veteran's legal name differs from the name on DD-214. You can read more about the Letter of Verification here: https://www.tvc.texas.gov/entrepreneurs/

To be deemed a "new veteran-owned business," your LLC must:

• Be formed in Texas on or after January 1, 2022, and before January 1, 2026, AND
• Be 100% owned by honorably discharged veterans from a branch of the U.S. Armed Services.

If you are an honorably discharged veteran looking to form a new Texas LLC for free, follow these steps:

1. Obtain Department of Defense Form 214 (DD214) for use in next step;
2. Obtain a Letter of Verification from Texas Veterans Commission;
3. Fill out and sign a Certificate of New Veteran Owned Business (Form 05-904);
4. Prepare a Certificate of Formation;
5. File the Certificate of Formation, Letter of Verification, and Form 05-904 via SOSUpload.