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Texas is one of the most popular and profitable states to form a business. If you want to join the 3.1 million small business owners in one of the South's most business-friendly states, we've got you covered. Here's all the information you need to start a business in Texas.
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Get started todayAccording to U.S. Census Bureau, Texas saw a 49% increase in new business applications between 2000 and 2022. Here's why so many aspiring business owners are keen to start a business in Texas.
You might think Texas' economy is driven by the oil and gas sector. But, the state is thriving in other sectors as well, such as aerospace, automotive and IT technology, advanced manufacturing, and life sciences.
The majority of the state's small businesses are in construction, technical and professional services, and waste management industries.
According to the Texas Workforce Commission, the industries making a comeback and poised for robust growth include:
If you're ready to go big with your business in Texas, here are the steps you need to follow to get it started.
One of the first steps to starting a business in Texas is creating a business plan. Doing so will make it easier to operate a successful, profitable business.
Your business plan will be a blueprint for how your company will run, and it'll help you get organized before investing your money — or someone else’s. Your business plan should include:
Your business plan is a great tool for guiding your own decisions, but it will also be something you submit to potential financial backers or lenders.
Next, it's time to find the perfect business name. Having a difficult-to-pronounce or generic name can undo all the time and effort you put toward getting your business plan in place.
Your business name should be unique, easily distinguishable, memorable, and suited for your business. Bizee's Business Name Generator can help you in generating a creative business name.
Once you have identified a few names to your liking, run a business name search to ensure your desired name is available. A few things to keep in mind while you are doing a business entity search in Texas are:
Lastly, we recommend thinking ahead and making sure your chosen name is also available as a domain name. Having a coinciding website and business name will make it easier for customers to locate and remember you.
If your preferred business name is available, there are three ways you can register it so no one else can stake their claim on it:
The business structure you opt for can have a significant impact on your operations, income, compliance requirements, and taxes.
A for-profit business in Texas has the following structures to pick from,
Sole Proprietorship
Limited Liability Company (LLC)
Partnership
Corporation (Corp)
The Texas Secretary of State will not assist you in finalizing the best entity structure, but Bizee surely can. Tell us about your dream business and we can help you figure out the ideal entity for it.
Depending on which type of business you choose, you may need to register that business with the Texas Secretary of State and pay the associated fees.
How much does it cost to start an LLC in Texas? Here’s a breakdown of costs and registration requirements:
Sole Proprietorship
No
You might need to file a DBA if the business name is different from your legal name.
NA
Partnership
No
You might need to file a DBA if the business name is different from your legal name.
NA
Limited Liability Partnership (LLP)
$200 per partner
Bizee's Business Formation team can assist you with filing the formation paperwork. We'll make sure you've crossed all the Ts and dotted all the Is so your business registration application isn't rejected.
An EIN or "Employer Identification Number" is like a Social Security number that the IRS assigns to every business entity. You can apply for your 9-digit EIN for free on the IRS website. Your EIN will make it easier to grow your business in the future, apply for funding, and pay your taxes.
One of the golden rules of running a successful business is to keep your personal accounts separate from those of the business. It keeps the books clean and makes everything easier come tax season.
For Texas, you can use the Governor's Small Business Resource Portal to find information on local banks and other financial resources.
Depending on what your proposed business is, you might need to secure other permits, licenses, or approvals at a federal, state, and/or local level. For example, you would require a local health permit in order to run a home bakery.
Check with the Business Permit Office (BPO) and Texas Department of Licensing and Regulation (TDLR) to see what the state-level permit and licensing requirements are for your business. Visit U.S. Small Business Administration website for information about specific federal licenses and permits.
All Texas businesses, even remote ones, selling tangible, taxable goods or services are required to get a seller's permit. You can apply for this permit via the Texas Comptroller website.
In today's digital landscape, having a website is one of the keys to small business success. Luckily, you don't need to know any coding to get it in place.
Follow these five steps for building your small business website:
The minimum cost to start an LLC or a corporation in Texas is $300. This is the amount you have to pay to file the Certificate of Formation in order to officially and legally register your business.
If you wish to receive expedited services for your filing, you can expect to pay an additional $25. For hard copies of certified Certificate of Formation or Certificate of Existence, the State of Secretary charges $15.
If you opt to reserve a name before filing for the LLC, the fee would be $40.
We also recommend including the costs of securing the correct licenses and permits in your startup costs checklist. The amount varies according to the business type and size.
Other expenses to be mindful of include technological expenses (website hosting and domain name), equipment, insurance, and yearly compliance costs.
No, Texas doesn't require a general business license. The Certificate of Formation issued by the Secretary of State or the Assumed Business Name certificate serves as a general business license.
But, as mentioned earlier, your business might require you to get different licenses, permits, or operation certificates at a federal, state, or local level.
An LLC in Texas doesn't expire unless a specific termination date is set by the owners on the Certificate of Formation.
If you do set an expiration date on your formation document and wish to change it, you need to inform the Secretary of Texas of the new date by completing a Texas Certificate of Amendment.
The costs of starting a business can certainly add up, with many expenses being non-negotiable. However, don't let that dampen your spirits, as there are ways to minimize the cost.
According to Forbes, the cost of doing business in Texas is 10% lower than the national average. To further reduce your startup costs, do your research before you splurge on high-ticket purchases like equipment or software. You can also reach out to various angel investors and venture capitalists to secure funding.
Texas has a lot of factors working in its favor. The thriving economy, business-friendly laws, generous tax breaks, low-startup costs, and large workforce supply are just a few reasons this Southern state continues to be a top choice for aspiring business owners.
If you want a "Made In Texas" stamp for your new business at a nominal cost, Bizee's formation services can turn your entrepreneurship dreams into reality. Our business experts will give you the right information and resources. We can even help you form an LLC for $0 + your state fee.
Includes Free Registered Agent Service for a Full Year.
Get started todaySwara Ahluwalia
Swara Ahluwalia is a freelance content writer with experience in the technical, B2B and SaaS domain. She also has curated content for various lifestyle brands. In her downtime, you will most likely find Swara training for her next marathon or spending time with her two daughters.
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