Start a Texas Business
Starting a Texas business is easier when you separate the planning work from the state filings. First, decide what the business will sell, how it will make money, what structure fits the risk, and what records it needs from day one. Then handle the Texas filings, registered agent record, permits, tax setup, banking, and operating systems.
A practical sequence works best: research the idea, write the plan, choose the structure, register the company, and set up the operating pieces before growth creates cleanup work.
Plan the Business Before You File
Start with the business idea itself. Ask whether the business will meet a need, provide something missing, or solve a problem. That is the right first test before filing anything with the state.
Use market research to answer basic questions. Who needs the goods or services? Who already provides something similar? Where will the new business sit in the market? If the answers are still vague, keep working before spending money on formation.
Write a business plan that matches the size of the project. A simple owner-funded business may only need a clear operating plan. A business seeking lenders or investors will usually need a more formal plan with financial data, growth assumptions, and a path for repayment or return.
Build a first-year expense view before choosing the filing path. Common startup costs include leases, insurance, equipment, travel, permits, professional fees, licenses, and other operating expenses. A spreadsheet is enough at the start if it forces the owner to see the first year in numbers.
Choose a Texas Business Structure
Common structure choices include sole proprietorship, limited liability company, partnership, and corporation. The choice affects taxes, company name, personal liability, and the way the business keeps records.
Texas LLC and corporation filing paths are clear. The Texas registration treatment for sole proprietorships or partnerships still needs confirmation, so that point remains [FACT-PENDING: Texas filing or registration treatment for sole proprietorships and partnerships].
For a Texas LLC, file Form 205, the Certificate of Formation for a limited liability company, with the Texas Secretary of State. The state filing fee is $300. The filing can be submitted online through SOSDirect or by mail.
For a Texas corporation, file Form 201, the Certificate of Formation for a Corporation, through SOSDirect. The Texas Secretary of State lists a $300 filing fee.
Before filing, choose a business name and check availability. Texas Form 501 reserves an entity name for 120 days and is renewable. The filing fee for a name reservation or renewal is $40.
Register the Business and Registered Agent
Texas filing entities need a registered agent and registered office. Every domestic or foreign filing entity must maintain both under Texas Business Organizations Code Section 5.201.
The registered office must be a physical Texas address where the registered agent can receive service of process and official notices during business hours. It cannot be only a P.O. box unless the commercial mail or message service is itself serving as the registered agent.
If the business is already formed in another state and will transact business in Texas, do not confuse foreign registration with forming a new Texas company. A foreign LLC uses Form 304, Limited Liability Company Application for Registration. The Texas filing fee is $750, and the form can be filed online through SOSDirect.
Texas also lists a late filing fee if an entity transacted business in Texas for more than 90 days without registering. The late filing fee is equal to the registration fee for each year of late registration.
Set Up Taxes, Banking, and Records
Tax identification, banking, and accounting usually come immediately after formation. In Texas, get the entity record in place, then set up the tax, banking, and accounting systems that keep the business separate from the owner.
Many businesses plan for a federal tax identification number before opening a bank account, hiring employees, or setting up payroll. Confirm the federal tax-identification steps separately before relying on a specific application path.
Open a dedicated business bank account once the formation and tax-identification pieces are ready. Separating business and personal finances keeps accounting cleaner and keeps the owner's personal records from becoming mixed with company records.
Set the accounting format early. Even a small business needs a way to track budgets, inventory, vendors, customer sales, taxes, and expenses. The system can become more formal as the business grows, but it should exist from day one.
For ongoing Texas state compliance, track the franchise tax and Public Information Report calendar. The annual franchise tax report is due May 15 each year. The Public Information Report is due on the same date and must be filed even if the entity's revenue is at or below the no-tax-due threshold.
Texas LLCs do not file a separate annual report with the Secretary of State. The recurring state compliance item is the franchise tax filing and Public Information Report with the Texas Comptroller.
Check Permits, Location, Insurance, and Team
Permits and licenses are a separate post-formation check. One common Texas permit category is clear: businesses engaged in business in Texas that sell or lease tangible personal property or sell taxable services in Texas must register for a sales tax permit with the Texas Comptroller.
The sales tax permit application is filed online through eSystems. There is no state filing fee, and the Comptroller says to allow 2-3 weeks for the permit.
Texas sales and use tax has a 6.25% state rate on retail sales, leases, and rentals of most goods and taxable services. Local jurisdictions may add up to 2%, for a maximum combined rate of 8.25%.
Other permit needs can depend on the city, county, industry, location, and activity. Common permit categories include health permits, building permits, zoning permits, occupational permits, and seller permits. A statewide permit directory or general statewide license rule still needs confirmation, so that point remains [FACT-PENDING: Texas city, county, and industry permit authority for specific business activities].
Choose the operating location with the business model in mind. A private office, shared office space, retail store, warehouse, or online shop can all work depending on the goods or services. The location decision should fit the customers, inventory, team, and permit requirements.
Plan insurance before the business is exposed to avoidable risk. Insurance is part of basic risk management, not an afterthought. The right policy depends on the business activity, property, workers, contracts, and customer exposure.
Build the team and marketing plan after the foundation is clear. Whether the company hires employees, uses contractors, or stays owner-operated, the business still needs a way to deliver the work and a plan for reaching customers.