Starting a business by state
How to start a business in Texas
Texas is one of the easier states to start a business in. There's no state personal income tax and no general state business license. But there are a few Texas-specific steps people miss, like the yearly franchise tax report every LLC must file even when it owes nothing. Here's the order to do it in.
Fees and rules checked in October 2026. States change them, so confirm on the official site before you file.
1. Pick your business structure
Sole proprietor: the simplest start. You don't file anything with the state to exist, but you and the business are legally the same, so your personal savings are on the line if something goes wrong.
LLC: you file a Certificate of Formation (Form 205) with the Texas Secretary of State. The state filing fee is $300. An LLC keeps business debts separate from you, and many Texas owners choose it for that reason.
An accountant can help you decide. The choice affects your taxes as well as your paperwork.
2. Check your name and file an assumed name if you need one
Search the Secretary of State's records to make sure your name isn't taken, and check the web address and social names too (see how to name your business).
If you do business under a name that isn't your legal name or your LLC's exact name, Texas requires an assumed name certificate. LLCs and corporations file it with the Secretary of State. Sole proprietors file it with the county clerk in the county where they do business.
3. Get your tax IDs
- EIN: free from the IRS, needed for an LLC with employees and useful for opening a bank account.
- Sales tax permit: if you sell taxable goods or services in Texas, get a sales and use tax permit from the Texas Comptroller before your first sale.
4. Know about the franchise tax report
Every Texas LLC and corporation files a yearly franchise tax report with the Comptroller, due May 15. For report years 2026 and 2027, businesses with revenue at or below $2,650,000 owe no franchise tax, but they still have to file a Public Information Report or Ownership Report. Missing it can cost your LLC its right to do business in Texas.
5. Check local and trade licenses
Texas has no general statewide business license. Your city or county may need permits for signs, home businesses or food. Many trades are licensed by the state, like electricians, HVAC techs, cosmetologists and barbers through the Texas Department of Licensing and Regulation. Check before you take paid work.
6. Open a business bank account
Keep business money separate from day one. Bring your EIN and your Certificate of Formation (for an LLC) or assumed name certificate (for a sole proprietor using a business name).
Make it look like a real business
The paperwork makes you legal. It doesn't bring customers. Once you're registered in Texas, people still need to find you and trust you: a name and logo they remember, a website, a business email and a Google Business Profile. Then a plan for your first customers.