Starting a business in the Lone Star State is an exciting venture. To ensure your company operates legally, you must follow specific steps mandated by the Texas Secretary of State. Below is a guide to help you navigate the process effectively.
Table of contents
Choose Your Business Structure
Before registering, decide on your legal entity. Common options include:
- LLC (Limited Liability Company): Offers liability protection and flexible management.
- Corporation: A legal entity separate from its owners.
- Partnership: Suitable for two or more owners.
Select a Unique Business Name
Your business name must be distinguishable from other entities already on file with the Texas Secretary of State. You can conduct a Name Availability Search on the state’s website to ensure your chosen name is available.
Appoint a Registered Agent
Texas law requires every formally organized company to appoint a Registered Agent. This individual or entity acts as your official point of contact to receive legal documents, such as service of process, on behalf of your business during regular business hours.
File the Certificate of Formation
To officially register, you must file a Certificate of Formation with the Texas Secretary of State. For-profit corporations and LLCs must provide specific details, including:
- The entity name and type.
- The purpose of the business.
- The registered agent’s name and address.
- The names and addresses of the governing persons (directors or members).
Obtain Necessary Permits and Licenses
Registration with the state is just the beginning. Depending on your industry and location, you may need to apply for local business licenses, professional permits, or tax registrations, such as a sales tax permit from the Texas Comptroller of Public Accounts.
Secure Your EIN
While not issued by the state, obtaining an Employer Identification Number (EIN) from the IRS is essential for federal tax purposes, opening business bank accounts, and hiring employees.
