What Do I Need to Start a Business in Texas?

Starting a business in Texas comes down to a clear sequence: pick the right entity, file the formation paperwork, get the federal and state registrations you need, and put the basic legal and compliance pieces in place before you open. Texas is a famously business-friendly state — no personal income tax and an efficient Secretary of State — but a few steps (the franchise tax, registered agent, and licensing) trip up new owners. This checklist walks the essentials in order.

1. Choose Your Business Structure

The entity you pick drives your liability protection and taxes. The common choices are sole proprietorship, partnership, LLC, and corporation — and for most small businesses the LLC is the default because it pairs liability protection with pass-through taxation. Decide this first; everything else follows from it. See our overview of Texas business structures.

2. Name the Business and Appoint a Registered Agent

Choose a name that’s distinguishable from existing Texas entities, and — if you’ll form an LLC or corporation — appoint a registered agent with a physical Texas address to accept legal documents. If you’ll operate under a name different from your legal name, file an assumed name (DBA).

3. File the Formation Documents

For an LLC or corporation, file the certificate of formation with the Texas Secretary of State ($300). Sole proprietorships and general partnerships need no state formation filing — but they also get no liability shield. See forming an LLC or forming a corporation.

4. Get an EIN and Open a Business Bank Account

Obtain a free Employer Identification Number (EIN) from the IRS for taxes, banking, and hiring, then open a dedicated business bank account. Keeping business and personal finances strictly separate is essential to preserving your liability protection.

5. Put Your Governing Documents in Place

Adopt the internal governing document for your entity — a company agreement for an LLC or bylaws for a corporation. They’re not filed with the state, but they govern how the business runs and reinforce the corporate formalities that protect the shield.

6. Handle Licenses, Permits, and Tax Registrations

Texas has no general statewide business license, but you may need industry or local licenses and permits, and a sales-and-use tax permit from the Comptroller if you sell taxable goods or services. Most formed entities are also subject to the Texas franchise tax and must file annually (those under the no-tax-due threshold — $2,650,000 in annualized revenue for 2026 — owe no tax but still file a Public Information Report).

7. Check Federal Beneficial-Ownership Reporting

The federal Corporate Transparency Act once required most new entities to file beneficial-ownership information (BOI) with FinCEN. Under an interim final rule effective in 2025, domestic U.S. entities and their U.S. owners are currently exempt — only foreign entities registered to do business in the U.S. must report. A final rule is still pending, so confirm the current requirement (and any state-level transparency law) when you form.

Frequently Asked Questions

What do I need to start a business in Texas?

At minimum: choose a structure (often an LLC), pick a name and registered agent, file the certificate of formation with the Secretary of State, get an EIN, open a business bank account, adopt governing documents, and obtain any required licenses/permits plus a sales-tax permit. Most entities then file an annual franchise tax report.

How much does it cost to start an LLC or corporation in Texas?

The state filing fee for the certificate of formation is $300 for both LLCs and corporations. Other costs may include a registered-agent service, licenses or permits, and legal help, but the core state fee is $300.

Does a new Texas business have to file beneficial-ownership (BOI) reports?

Under the current interim rule, domestic U.S. entities and U.S. persons are exempt from FinCEN BOI reporting; only foreign reporting companies must file. A final rule is pending, so verify the requirement when you form, along with any state transparency law.

Does my Texas business have to pay franchise tax?

Most formed entities (LLCs, LPs, corporations) are subject to the Texas franchise tax and must file annually, but those under the no-tax-due threshold ($2.65M annualized revenue for 2026) owe no tax and file a Public Information Report. Sole proprietorships and general partnerships of individuals are generally not subject to it.

Getting the structure and filings right at the start saves expensive fixes later. Reidel Law Firm helps Texas founders choose an entity and complete formation on transparent flat fees. Start your Texas business right.