TEXAS BUSINESS START UP GUIDE

Starting a business in Texas requires you to complete a number of basic steps and make some key decisions. As part of your overall plan, you’ll need to select a location, decide on a business structure, and obtain the necessary licenses and permits. Additionally, determining which financing options will meet your short-term needs and long-term goals is crucial. Within this section, you will find information on some quick steps on how to get started.

New business owners should always seek the guidance of a professional tax consultant, accountant, and/or attorney to verify all legal requirements are met before operating a business.

 

STEP 1: DETERMINING YOUR BUSINESS STRUCTURE

The first step in starting a business is to decide on a basic legal structure. This step is important because financial and legal implications vary depending on legal structure. Once you settle on a legal structure, you will need to properly record the business name with the state and/or county. In the State of Texas, there are several legal options for setting up your business structure. Given the legal implications when choosing your business structure, new business owners should always seek the guidance of a professional tax consultant, accountant, and/or attorney to verify all legal requirements are met before choosing a business structure. The Lawyer Referral Service of Central Texas provides resources for entrepreneurs seeking legal advice.

 

The optional legal business structures in the State of Texas are as follows:

Legal Business Structures in the State of Texas

  • Sole Proprietorship
  • General Partnership
  • Limited Partnership
  • Registered Limited Liability Partnership
  • Limited Liability Company
  • Corporation

Where to file?

Once your research is complete and you have consulted with a legal professional, the following information will guide you to the appropriate local or state agency to file the required paperwork for the business structure you have selected.

 

Sole Proprietorship – Assumed Name, Doing Business As (DBA)

In Houston, you would file your paperwork for your Assumed Name, Doing Business As (DBA) at the Harris County Clerk’s Office. A DBA ensures the business name you plan to use is not being used by someone else in Harris County. The Assumed Name is good for 10 years unless changes are made.

Complete the Assumed Name Records Certificate of Ownership for Unincorporated Business or Profession Form.

Please consult the Harris County Clerk’s Office as prices and procedures are subject to change without notice.

Partnerships, Limited Liability Companies and Corporation

In the State of Texas, all partnerships, limited liability companies and corporations are all filed thru the Office of the Texas Secretary of State. Please review their website for information regarding these types of business filings. For general information and specific filing questions, you may also contact them directly at 512-463-5586

STEP 2: FEDERAL, STATE, AUSTIN AND EMPLOYMENT TAX RESPONSIBILITIES

An equally important step in the development of your business is your determine and comply with the various overlapping tax responsibilities of your new business. The following information will guide you to the appropriate Federal, State and Austin agencies who administer business taxes.

Federal Tax

The Internal Revenue Service (IRS) governs all things related to tax collection at the federal level. In addition, the IRS provides a wealth of business tax related information for small business owners. 

The local IRS Tax Payer Assistance Center provides walk in face-to-face assistance. The center is located at 825 East Rundberg Lane, Austin, TX 78753. The center can be reached directly at 512-499-5127.

State Tax

The Texas Comptroller of Public Accounts is responsible for the administration and collection of state and local sales tax for businesses operating in the State of Texas (sales and franchise taxes). 

Texas Comptroller of Public Accounts | 111 East 17th Street Austin, Texas 78711 512-463-4600 or 800-252-5555.

Houston Tax

Locally, business taxes apply to entrepreneurs who own tangible property and use their property to produce income. The Harris County Appraisal District (HCAD) handles the administration of the property tax for the City of Houston. For specific information, their website will help clarify any questions and for additional information. 

Employment Tax

Internal Revenue Service – Provides specific information regarding your federal employment tax responsibilities.

Texas Workforce Commission – Provides specific information regarding your state and local employment tax responsibilities.

STEP 3: BUSINESS LICENSES AND PERMITS BY BUSINESS TYPE

According to Texas Wide Open for Business, the State of Texas does not require a general “business” license; however, there are a number of regulatory agencies that have licensing and permitting requirements based on the type of service, or products associated with your business. To ensure that all permitting requirements are met, you should contact the local county and/or city government in which you plan to conduct business to determine if there are any additional requirements. To determine state occupational licensing and permitting requirements, please visit the Texas Department of Licensing and Regulation (TDLR), specifically the TDLR Licensed Programs tab, for more information.

STEP 4: BUSINESS EMPLOYER REQUIREMENTS

Texas Wide Open for Business section on employer requirements is a one stop shop for small business owners. The information provided will help entrepreneurs understand and comply with federal and state employer requirements. There are a number of labor, safety, and reporting laws relating to employment of personnel, thus it is vitally important for small business owners to increase their knowledge and ensure they are in compliance.

Contact Information for Agencies cited in this guide:

For a comprehensive introduction on conducting business in Texas, please view the Governor’s Small Business Handbook.

Texas Business Portal – Offered as part of Texas.gov (formerly TexasOnline), the award-winning official eGovernment web site for the State of Texas, providing citizens, local government, and state agencies with a single, secure structure to conduct business over the Internet. 

Additionally, the Texas Workforce Commission publishes a great resource for employers. The Especially for Texas Employers is a step by step guide that walks employers and employees thru every aspect of Texas employment law.

Internal Revenue Service of the U.S. Department of Treasury | 800-829-4933

For any business in Texas that has employees or operates under one of the formal legal structures, the owner(s) will need to contact the Internal Revenue Service (IRS) and obtain a Federal Employers Identification Number (FEIN). The IRS should also be contacted for the forms and procedures to withhold and remit federal taxes required regarding both employers and employees.