Wondering if you can register a new business in Texas by yourself? If you want to save yourself some hassle, you can pay a trained financial professional or an online service a few hundred dollars + fees to register your new business for you in Texas.
Alternatively, you can do it yourself.
If you want to do it yourself, it will cost:
- Your time (2-3 hours if you have info ready; many more if you don’t) +
- $300 paid to the Texas Secretary of State to file your Certificate of Formation +
- $15 to file for a registered agent +
- Other optional small fees payable to Texas (e.g., $1 for name search, $30 for certified copy of Certificate of Formation, $40 to reserve name for an LLC before registering, etc.)
Still interested in doing it yourself? Here are a few tactical guidelines we put together for a friend that we decided to share online. You can also access Texas’ official guidelines or the SBA’s official guidelines as well.
Disclaimer: Please note that this information provided is for general informational purposes only and should not be considered legal or financial advice. Consult a qualified legal or financial professional for advice. We do not accept responsibility for any loss or damage resulting from reliance on this information.
10 Steps to Register a New Business in Texas
- Decide What Business Formation to Use:
- LLC
- Type: Single member? Manager-managed? Series LLC?
- Tax Treatment Options:
- Get taxed as a sole proprietor?
- Get taxed as an SCORP? [Note: This NOLO article captures a few of the reasons why we like this option.]
- S-CORP or
- C-CORP [Not recommended]
- LLC
- Choose a Business Name:
- If an LLC, the business name must include LLC or a variation
- If you want a different brand name, you can always do a DBA
- Ensure the name is available by checking the Texas Secretary of State’s business name database: https://www.sos.state.tx.us/corp/businesslookup.shtml
- LIFT tip: Search https://www.panabee.com/ to see if your name is available as a domain; purchase it on NameCheap and avoid GoDaddy
- Register Your Business Name:
- Reserve your chosen business name with the Texas Secretary of State to prevent others from using it while you complete the registration process: https://www.sos.state.tx.us/corp/namefilingsfaqs.shtml#reservename
- Consider trademarking your name and/or logo if it’s needed
- Choose a Registered Agent:
- Appoint a registered agent in Texas who will receive legal documents on behalf of your LLC. This can be an individual or a registered agent service. They will need to receive all your important business documents.
- You or a trusted person could be your registered agent. We’ve seen this service advertised for $100-600 per year.
- Open an Account with Texas SOSDirect:
- Create an account with the Texas Secretary of State’s Direct Access (SOSDirect) system: https://www.sos.state.tx.us/corp/sosda/index.shtml
- SOSDirect allows you to manage your LLC’s information, file some required documentation, and access various business services conveniently online.
- File Certificate of Formation (Form 205 for domestic and Form 304 for foreign):
- Submit the Certificate of Formation to officially register your LLC with the Texas Secretary of State: https://www.sos.state.tx.us/corp/forms_boc.shtml#llc
- Create an LLC Operating Agreement:
- This document outlines the way your LLC will conduct business. Texas does not require one and you do not have to file it but you will save yourself a lot of headaches by writing one out. This is also often required by banks so it is important to create.
- There are many templates (free and paid) online you can use for this
- Obtain an Employer Identification Number (EIN):
- Apply for an EIN from the Internal Revenue Service (IRS). This unique number is required for tax purposes and is used to identify your business: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- Obtain Necessary Permits and Licenses:
- Check with the Texas Comptroller of Public Accounts and local government offices to determine if you need any specific licenses or permits to operate your business, including tax permits: https://comptroller.texas.gov/taxes/permit/
- Understand Tax and Reporting Requirements:
- Familiarize yourself with federal, state, and local tax obligations for your LLC. The Texas Comptroller of Public Accounts website can be a valuable resource for tax-related information: https://comptroller.texas.gov/taxes/
- Be sure you are paying and filing for any franchise, sales, employer, income, and other taxes on time: https://security.app.cpa.state.tx.us/
- [Extra Tip] Open a Business Bank Account:
- Set up a separate bank account for your LLC to keep personal and business finances separate.
- Set up a separate bank account for your LLC to keep personal and business finances separate.
Stay in Good Standing (A couple of examples of things to remember)
- File an annual franchise report by May 15 of each year.
- File your annual state and federal taxes on time (including if you have to pay quarterly estimated taxes)
A Few Other Tactical Topics for Entrepreneurs to Consider:
- Prioritize your Life Plan, self-care, key relationship care, and mentoring/learning rhythms
- Retirement planning (e.g., Simple IRAs are great)
- Healthcare coverage
- Emergency fund, business continuity plan, possibly business Insurance
- Bookkeeping software and support, and tax planning
- Legal support and record-keeping/documentation systems
- IT and operations support, and cyber security
- Sales and Marketing software and support
- Workspace and equipment
- Review at least 2-3 other relevant online checklists (e.g., SBA’s 10 Steps to Start Your Business) to cover your bases
Yes, the process is not rocket science but it does take time and effort. If you’d like someone local in Katy or Houston to handle this for you (especially if you are an ex-pat or represent a foreign entity), we highly recommend going with a proven local provider such as Flora at Eftex Business Services. If you’d rather handle it yourself, we hope the above has been helpful — and when you’re ready to think through your digital marketing, we suggest you read this slightly dated but useful post before making any marketing financial commitments.
