How to Start a Company in Texas
This page is a part of the McNair Center's Guide to Small Business in Houston.
This is an overview on how to create a business in Texas. For more comprehensive guidance and assistance, consult the Texas Small Business Handbook.
Step 1: Business Structure and Name
Determine the legal structure of the business and properly file the business name with the state and/or county.
- Search for existing trademarks - Free
- Reserve a name for 120 days:
- Prepare a certificate of formation:
- Download the form - $300
- Or file online at SOSDirect ($300) and prepare the following necessary information:
- The name and type of entity being formed;
- The names and addresses of directors and registered agents;
- The number and value of initial authorized shares;
- The business purpose for which the entity is being formed;
- The name and address of the organizer (i.e., the person responsible for incorporating the company);
- The effectiveness of the filing, which means when you want the document and the entity to become effective; and
- The signature of the organizer.
|Business Type||Filing Fee ($)||State Franchise Tax|
|Limited Liability Partnership||200||Yes|
|Limited Liability Company||300||Yes|
Step 2: Tax Responsibilities
Determine the potential tax responsibilities of the new business on the federal, state, and local level.
- Apply for a Employer Identification Number (EIN) (alternatively called Federal Tax Identification Number)
- Texas requires that an EIN for businesses, which is used for tax purposes.
- Federal Taxes
- The Internal Revenue Service will identify and determine your tax liability.
- State Taxes
- The state of Texas imposes a state sales tax on "all retail sales, leases and rentals of goods, and services that are expressly enumerated as taxable under the Texas Tax Code." Additionally, any taxable business chartered, organized, or doing business is subject to a state franchise tax. That said, most small businesses are exempt from this kind of tax.
- Local Taxes
- Business Inventory Taxes will be collected at the local level, although many municipalities do not tax items that fall under “Goods in Transit Exemption” or the “Freeport Exemption.”
- Other Taxes
- The Texas Workforce Commission will collect Unemployment Insurance tax from most businesses.
Step 3: Licensing and Permits
Determine necessary licenses, permits, certifications, registrations, and/or authorizations for a specific business on the federal, state, and local level.
- Create bylaws. While Texas does not set out any concrete requirements for a corporation's bylaws, the bylaws usually contain information about internal rules and procedures, responsibilities of officers, the size of the board, how shareholder meetings will be held.
- There is no general "business" license in the state of Texas.
- There are different licensing procedures for various professions.
- The Texas Department of Licensing and Registration has a full list of the specific professions that need additional accreditation.
- You should also contact the local government of the city you are choosing to operate in to find out if there are any specific licensing needed to conduct business.
Step 4: Federal and State Employer Requirements
Determine federal and state employer requirements. There are various laws relating to employment of personnel.
Small business owners must fulfill requirements related to:
- Americans with Disabilities Act requirements
- Equal Employment requirements
- Safety requirements
- Wage and Labor requirements
- New Hire Reporting
- Workers' Compensation Insurance reporting
- Labor Posters placement
- Other relevant requirements
Common Forms and Fees for Texas Small Businesses
|Filing Type||Additional Form(s)||Filing Fee ($)|
|Certificate of fact||15|
|Expedited processing of a request for a certified copy or certificate of status or fact||10|
|Certificate of formation for an entity (except nonprofit corporation, cooperative association, PA or LP).||201,203, 205, 206||300|
|Certificate of formation for a nonprofit corporation||202||25|
|Certificate of formation for a cooperative association corporation||25|
|Certificate of formation for a limited liability partnership or LLLP||701, 703||750|
|Name reservation (120 days) or renewal||501||40|
|Registration of trademark||901||50 (per class)|
|Expedited processing of a document submitted for filing (except trademark documents)||25|
For a comprehensive list of all forms used to register a business or nonprofit, please see the SoS's compiled list.
For a comprehensive list of all forms used to trademark corporations, please see the SoS's compilation of trademark forms.
For a comprehensive list of report forms, please see the SoS's compiled list.
The SoS has also created a Business Formation FAQ.
Fees may be paid by:
- Check (personal or firm checks accepted) or money order payable to the Secretary of State through a U.S. Bank or financial institution
- Credit card (Credit card payments are subject to an additional statutory convenience fee of 2.7% of amount charged.)
- LegalEaseSM debit card
- Prefunded SOS client account
- Cash (for in-person submissions only)