How to Register a Business in Texas

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Contents:

Here’s a bold claim worth testing against your own research: Texas genuinely remains one of the most affordable and straightforward states in the country to formally register a new business.

Quick Answer Box

Registering a business in Texas involves choosing an entity structure, filing formation documents with the Secretary of State, obtaining an EIN, and registering for any required state taxes or local permits.

Brief Intro

Texas offers no state income tax and comparatively modest filing fees, making it a genuinely attractive state for new business formation compared to many coastal alternatives.

Preparation

Decide on your entity type, LLC being the most common choice for small businesses, and choose a business name that’s confirmed available through the state’s search tool.

Step-by-Step

Step 1: File Your Certificate of Formation

Filing with the Texas Secretary of State costs $300 for an LLC, submitted online or by mail, typically processed within a few business days.

Step 2: Obtain an EIN From the IRS

A free federal Employer Identification Number is required for tax filing, opening a business bank account, and hiring employees.

Step 3: Register for Texas State Taxes if Applicable

Businesses selling taxable goods or services need to register for a sales tax permit through the Texas Comptroller’s office, free of charge.

Step 4: Get Required Local Permits

Depending on your city and industry, local permits like a health permit for food businesses may be required beyond state-level registration alone.

Step 5: Open a Business Bank Account

Separating business and personal finances immediately protects your LLC’s liability shield and simplifies bookkeeping from the very start.

An Expert Quote

“Texas’s lack of state income tax genuinely simplifies both formation and ongoing operation compared to many other states,” notes Austin-based business attorney Odalys Kimura. “New owners often expect more bureaucratic friction than they actually encounter here.”

A Cost Breakdown

LLC formation costs $300 in state filing fees. An EIN is completely free through the IRS. Local business licenses typically add $50-$200 depending on your specific city and industry.

Pro Tips

File online through the Texas Secretary of State’s website rather than by mail, since online filing typically processes noticeably faster than paper submissions.

FAQ

Do I need a registered agent in Texas?

Yes, every Texas LLC needs a registered agent with a physical Texas address, which can be yourself, another individual, or a professional registered agent service.

How long does Texas LLC formation typically take?

Standard online filing typically processes within two to three business days, considerably faster than many other states’ formation timelines.

Does Texas require a separate franchise tax like California?

Texas does levy a franchise tax, but most small businesses fall below the no-tax-due revenue threshold and simply file a zero-liability report each year.

Can I register a Texas business without living in the state?

Yes, non-residents can form a Texas LLC as long as they appoint a registered agent with a physical Texas address to receive official correspondence.

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