Introduction: Why Start a Company in Texas?
Texas is a top choice for entrepreneurs due to its business-friendly regulations, no state income tax, and booming economy. Whether you’re launching a local store or an online startup, knowing how to register a company in Texas ensures a strong legal foundation for growth and protection.
Step 1: Choose Your Business Structure
The first step is selecting the right legal structure. The most common types in Texas include:
- LLC (Limited Liability Company)
- Sole Proprietorship
- Corporation (C-Corp or S-Corp)
- Partnership (LP, LLP)
LLCs are the most popular due to their liability protection and tax flexibility.
Step 2: Pick a Business Name
Your business name must be:
- Unique and distinguishable from existing entities
- Not misleading or implying government affiliation
- Include proper suffixes like “LLC” or “Inc.” where applicable
Check availability using the Texas SOS Name Search tool.
Step 3: Appoint a Registered Agent in Texas
You’ll need a Registered Agent with a physical address in Texas to receive legal notices.
- Can be an individual or a commercial registered agent
- Must be available during normal business hours
Step 4: File Formation Documents
Depending on your structure:
- LLC: File Form 205 (Certificate of Formation – LLC)
- Corporation: File Form 201 (Certificate of Formation – For-Profit Corporation)
- Fee: $300 (standard)
- Submit: Online via SOSDirect or by mail
You’ll receive a Certificate of Filing once approved.
Step 5: Get an EIN from the IRS
An Employer Identification Number (EIN) is like a Social Security Number for your business.
- Required for hiring, taxes, and opening a bank account
- Apply online for free at IRS.gov
Step 6: Register for State Taxes (If Applicable)
Depending on your business type, you may need to:
- Register for Texas Sales Tax Permit via the Texas Comptroller
- Pay the Texas Franchise Tax annually if you form an LLC or Corporation
- Get local business licenses or permits (e.g., health, zoning, resale)
Visit comptroller.texas.gov for details.
Step 7: Create an Operating Agreement or Bylaws
While not required by the state, it’s smart to create:
- An Operating Agreement (for LLCs)
- Corporate Bylaws (for corporations)
This helps define management roles, profit distribution, and dispute resolution procedures.
Step 8: Open a Business Bank Account
To separate personal and business finances, open a dedicated business bank account using:
- Your EIN
- A copy of your Certificate of Formation
- Operating Agreement or Bylaws
Step 9: Stay Compliant
To keep your Texas company in good standing:
- File an Annual Franchise Tax Report (due May 15)
- Update your Registered Agent as needed
- Renew permits and licenses annually
Final Thoughts: Ready to Register Your Company in Texas?
Now that you know how to register a company in Texas, you can confidently start your entrepreneurial journey. From formation to compliance, Texas makes it easy for businesses to grow and thrive.
