Texas is known for its business-friendly environment and is often ranked as a top state to start a business. Favorable business policies and a streamlined legal environment provide a solid foundation for small businesses and entrepreneurs to thrive. The process of registering a business in Texas involves seven key steps. Before you begin, it’s recommended to consult with tax advisors, accountants, and legal professionals to ensure full compliance with all legal requirements.
Step 1: Create a Business Plan
A business plan is the roadmap for your business. It should outline your main purpose, core values, organizational structure, financial resources, and competitive advantages. The U.S. Small Business Administration (SBA) offers several helpful business plan templates.
Step 2: Choose a Business Location
Choosing a business location depends on the nature of your business. Consider zoning regulations, access to supply chains, customers, and workforce availability.
Step 3: Secure Funding
There are several ways to raise capital for a new business, including using personal savings, borrowing from friends and family, bank loans, microloans, federal loans (through the SBA), or using personal finance. Other options include crowdfunding, venture capital, or angel investors. The SBA offers helpful guidance on funding your business. Small loans are available from Community Development Financial Institutions (CDFIs). Find your nearest CDFI using the online CDFI locator. Also, visit our Finance and Capital webpage for more information.
Step 4: Structure and Register Your Business
Determine the right structure for your business. Generally, sole proprietorships and partnerships need to register their business name (DBA or assumed name) with the local county clerk’s office. If you decide to incorporate, the Secretary of State’s (SOS) website provides information on choosing the right legal structure. You can also register a new entity on the SOS website. This is the most crucial step when learning How To Register A Business In Texas.
Step 5: Business Tax Responsibilities
Determine your new business’s potential tax responsibilities with federal, state, and local tax authorities. Federal tax obligations are filed through the Internal Revenue Service (IRS). State tax filings are done through the Texas Comptroller of Public Accounts (CPA). If starting an online business, this online Marketplace Seller tax information is helpful. For questions on local business and property taxes, consult with your appraisal district or county tax assessor-collector. Find your appraisal district and local tax office on the CPA website.
Step 6: Business Licenses and Permits by Business Type
Texas does not require a general business license. However, it is critical to determine the required permits, certificates, registrations, or authorizations needed for a specific business activity, at the federal, state, and local levels. Our Texas Business Licenses & Permits Guide 2024-2025 provides a comprehensive list of state licenses and permits required for those wanting to operate a business in Texas. For more information or assistance, contact the Texas Economic Development & Tourism’s Business Permit Office (BPO).
Step 7: Employer Requirements
If you plan to hire employees, determine employer requirements at the federal and state levels. To learn more about employer resources in Texas, visit the Texas Workforce Commission’s business and employer webpage.
