Once you have prepared a business plan and secured financing for your new endeavor, you have several steps to complete before opening your business. In Texas, there is no general business license to obtain. Rather, business license or permit requirements depend largely on the type of business you plan to operate. Additionally, whether or not your business requires a license or permit, you must register with several governmental entities before beginning business. Below you will find a general guide to starting a business in Texas, including how to determine whether you need a specific business license.
Business licenses and permits may be required at the state or local level depending on your business type. You must make a separate determination for both levels of government, as the requirements may be different. You can learn about your local business license and permit requirements by contacting your city government. In many cities, there is a dedicated business development office that administers licensing and permitting. Call or visit your local City Hall for more information.
To determine whether you require a state business license or permit, visit the Occupational Licenses & Permits webpage on the State of Texas website (see the link below). Along the left side of this page you will find a list of industries that require a license or a permit, including, for instance, construction, child care, dairy, beauty and fitness, and real estate. If you find your industry listed there, click through for a comprehensive list of specific business types. For example, in the beauty and fitness industry several business types require a license, including tanning businesses, body piercing businesses, and message therapy businesses. If you find that your business type requires a license or permit, click through for detailed information on how to fulfill this requirement. Typically, you can register for a license or permit online.
Once you have determined the licensing requirements for your business, you need to register your business structure and business name. The simplest business structure is a sole proprietorship. More complicated structures include various kinds of partnerships, a limited liability company, and a corporation, among several others. Note that the choice of business structure has important tax and legal liability implications; obtain advice from a lawyer and an accountant if you are unsure of your choice.
If you plant to operate as a sole proprietorship or a partnership, you need not register your business structure and name at the state level. Rather, you must file an Assumed Name Certificate with the county clerk’s office in each county in which you have a business premises. If, on the other hand, you plant to establish any other business structure, you must register with the Texas Secretary of State. The procedure varies somewhat depending on the business structure you have chosen. Visit the Texas Secretary of State for specific instructions and required forms.
Next, you must register with Federal, state, and local tax authorities. First obtain a Federal Employer Identification Number (EIN) from the IRS. You can do this online. Then register with both the Texas Comptroller of Public Accounts and the Texas Workforce Commission. You can also do this online. Finally, if your business owns personal property used to produce income, you must report it to your county appraisal district office.