Starting a Business in Texas

A business plan helps you define your goals, understand your market, and map out how your business will operate and grow. It is also often required when applying for a loan or seeking investors. Before you commit to a name, confirm it is available in Texas.

Where your business is located affects your tax obligations, the permits you need, and the local regulations you have to follow. If you are operating from home, check local zoning rules. If you are leasing commercial space, review local business permit requirements with your city or county before signing. The Office of the Governor also has guidance on Texas enterprise zones and location-based incentives.

Getting the right funding in place before you launch keeps you from making decisions under financial pressure. Options range from personal savings and small business loans to Small Business Administration (SBA) backed financing and state grant programs. The SBA's funding guide walks through each option and what you need to qualify.

Your business structure, such as a sole proprietorship, partnership, LLC, corporation, or other entity, determines how you are taxed, your personal liability exposure, and how you file with the state. Once you have decided on a structure, you will register your entity with the Texas Secretary of State (SOS), apply for a federal Employer Identification Number (EIN), and pay any applicable formation fees. If you plan to operate under a name different from your legal entity name, you will also need to file an assumed name (DBA) certificate.

Texas has no state personal income tax, but businesses may be subject to the Texas franchise tax, sales and use tax, and other taxes depending on their structure and industry. The Texas Comptroller of Public Accounts (CPA) administers state business taxes. For full details on filing options and tax requirements, visit the Texas.gov Taxes page.

Most businesses in Texas need at least one state license or permit, and many need several depending on industry, location, and the services they offer. The state licenses and permits guide breaks down requirements by business type, and the Texas Department of Licensing and Regulation (TDLR) handles licensing for more than 40 regulated industries.

If you plan to hire employees, Texas law and federal law impose a range of obligations such as registering as an employer with the Texas Workforce Commission (TWC), withholding and remitting payroll taxes, carrying workers' compensation insurance, and complying with wage and hour laws. The employer resources page on the TWC website covers the key requirements and connects you with additional guidance.