How to Start a Business in Texas

Step 1: Choose Your Business Structure

A sole proprietorship under your own legal name needs no state formation filing in Texas, though a different business name still requires an Assumed Name Certificate. An LLC or corporation files a Certificate of Formation with the Secretary of State and gets liability protection in most instances, as long as the business's finances stay separate from the owner's. See how to choose a business structure for the full comparison.

Step 2: Check Your Name With the Secretary of State

Your LLC name must include "limited liability company," "limited company," or an abbreviation of one of these phrases, and must be distinguishable from every other entity name, reservation, or registered series on file. You can check preliminary availability by phone at (512) 463-5555 or by emailing [email protected]. If you want to lock in a name before filing, Texas offers a name reservation for $40 using Form 501, lasting 120 days and renewable during the 30 days before it expires.

Step 3: Appoint a Texas Registered Agent

Your registered agent must be a Texas-resident individual or an organization registered to do business in Texas, with a Texas street address for the registered office. The Secretary of State states an entity cannot serve as its own registered agent, but an owner, officer, or employee can personally serve if they have a qualifying Texas address.

Step 4: File the Certificate of Formation

File Form 205, the Certificate of Formation, online through SOSPortal, or by mail, fax, or in person. The filing fee is $300. Texas doesn't publish a fixed standard processing time; the Secretary of State posts current turnaround on its Business Filing Tracker and encourages filing through SOSPortal for the fastest processing. If you need it faster, standard expedited service costs $50 extra and typically takes 2 to 3 business days, with next-day service for $500 and same-day service for $750 available for filings received by noon.

Step 5: Get an EIN From the IRS

Once your Texas filing is approved, apply for a federal Employer Identification Number, which is always free directly from the IRS and typically issued immediately through the online application.

Step 6: Register an Assumed Name if You're Using One

If you'll operate under a name different from your own legal name or your LLC's exact registered name, file an Assumed Name Certificate (Form 503) with the Secretary of State for $25. Since a 2019 law change, a Texas LLC no longer also files this at the county level.

Step 7: Register for State Taxes

If you'll sell taxable goods or services, register for a Texas Sales and Use Tax Permit with the Comptroller of Public Accounts; there's no fee. If you'll have employees, register separately with the Texas Workforce Commission for an unemployment tax account within 10 days of becoming liable for the tax.

Step 8: File Your Franchise Tax Report and Public Information Report

Unlike most states, Texas has no annual report filed with the Secretary of State. Instead, every LLC files a Franchise Tax Report and Public Information Report (Form 05-102) with the Comptroller of Public Accounts by May 15 each year, starting the year after your LLC registers. For 2026 to 2027 reports, an LLC with annualized total revenue at or below $2,650,000 owes no tax but must still file the Public Information Report; above that threshold, the rate is 0.375% for retail and wholesale businesses, 0.75% for other businesses, or 0.331% under the EZ computation. A report filed after May 15 owes a $50 penalty even if no tax is due, and failing to file the Public Information Report can forfeit your LLC's right to transact business in Texas.

Step 9: Confirm Local Licenses and Industry Permits

Texas doesn't have a single statewide general business license, but many cities and counties, and certain regulated professions, require their own permit or license. Check your specific city, county, and industry requirements separately from your Secretary of State filing.

If you're deciding between states, see our Texas LLC guide for the full filing, tax, and compliance details.

The Franchise Tax Report Replaces What Other States Call an Annual Report

It's easy to assume Texas has no recurring state filing at all because it lacks a traditional annual report, but the Franchise Tax Report and Public Information Report serve the same compliance purpose and carry real deadlines and penalties if missed.

Workers' Compensation Is Optional for Most Employers

Texas is one of the few states where private employers can choose whether to carry workers' compensation insurance. Non-subscribing employers must still meet specific notice requirements to employees, so confirm this rule with the Texas Department of Insurance if you decide not to carry coverage.

A Foreign LLC Needs to Register Promptly

If your LLC is formed in another state but does business in Texas, registering as a foreign LLC late carries a penalty: a foreign LLC transacting business in Texas for more than 90 days without registering owes a late fee equal to the $750 registration fee for each full or partial year unregistered.

SOSPortal Replaced Older Filing Systems

Texas launched SOSPortal as its single online filing system, replacing SOSDirect and SOSUpload, with payment accepted only by ACH or credit card. Confirm you're using the current system rather than instructions referencing an older one.

This Is Not Legal or Tax Advice

Texas's specific requirements can change, and this overview doesn't cover every industry-specific license or local requirement. Confirm current details with the Texas Secretary of State and the Comptroller of Public Accounts, and talk to a tax professional about your specific numbers.