How Much to Register a Business in Texas?
There are a lot of costs associated with starting a business in Texas, and the total will depend on which business structure you choose.4 min read
2. Registering a Business In Texas
3. Creating an LLC in Texas
4. Licenses and Permits
You may be wondering, "How much to register a business in Texas?" There are a lot of costs associated with starting a business, and the total will depend on which business structure you choose.
- A DBA (Doing Business As) name is not necessarily a separate structure, but an alternative name for your business.
- A corporation is a separate structure with shareholders, directors, and officers and provides liability protection to owners.
- A Limited Liability Company (LLC) is a newer structure that is less complex, easier to manage, and less taxed than a corporation.
Starting a Business In Texas
Once you have chosen a structure, you can decide on a business name. Make sure your name is unique, easy to read and say, and able to age well. Running your name through a trademark search with the U.S. Patent and Trademark Office is an effective way to look for conflicts, but a competent Google search can work well too.
To check if your company name is available, search Texas's Department of State: Division of Corporations business name database. Also search for misspellings, plurals, variations, sound-alikes, etc. in case your name is rejected for being too similar to another company's.
Get a Federal Employer Identification Number (FEIN or EIN), which is like a social security number but for the company. DBAs don't need an EIN, but without one, you'll have to use your own SSN, so it's recommended to get one anyway. You can get an EIN online or fill out the IRS Form SS-4.
DBAs need to be renewed every 5 years, unless you change the name before that.
Texas doesn't require annual reports from LLCs, but the Texas Comptroller of Public Accounts (CPA) does require an annual tax franchise report. Corporations must file a “Statement of Information” or basic updates, like change in address, every year. If you miss the May 1st deadline, you'll be charged a $400 late fee.
In Texas, corporations must file their annual reports with the CPA every May 15th or the next business day. If you're late to file a franchise tax, which is a percentage of what the company made that year, you'll be charged a $50 late fee.
Registering a Business In Texas
You can search for your business name on SOS Direct, which charges $1 and takes you through the whole process of registration.
You should discuss cost, liabilities, and pros and cons with a CPA or attorney before filing.
To set up a corporation, there is a fee of $300. For an LLC, it's $200 per partner. DBAs cost $25 to file.
SOS Direct is up 24/7 and may charge a credit card fee, or you can file in person at the office in Austin.
An LLC can file an Application for Reservation or Renewal of Reservation of an Entity Name (Form 501) to reserve their name for 120 days with the Texas SOS. You can do this online or through the mail for $40.
Creating an LLC in Texas
In Texas, LLCs are created by filing a Certificate of Formation (Form 205) with the SOS, containing the following information:
- The LLC's name
- The name and address of the registered agent
- Whether it will be managed by members of managers
- The governing person's name and address
- The organizer's name and address
- The purpose for forming the LLC
- The effective date of the certificate
- The termination date, if applicable
You can file the certificate online, through the SOS Direct website, or by mail for a fee of $300. Along with the certificate should be:
- The registered agent's written or electronically signed consent form
- Names, addresses, and initials of members and managers
An LLC outside of Texas that wants to business within the state must register with the Texas SOS. You register by filling out an Application for Registration of Foreign Limited Liability Company (Form 304). It can also be filed online or by mail for a fee of $750.
If the LLC's name is not available in Texas, it must get an Assumed Business Name. To do this, file online or by mail with an Assumed Business Name Certificate (Form 503) with the SOS for $25.
It costs $300 to file for a Certificate of Formation for a Texas for-profit corporation. Nonprofits only need to pay $25.
Licenses and Permits
Texas's official government website has all the information about permits, licenses, registration, etc. Your city or county might also require that you file for specific permits and licenses, such as:
- Alarm Permit
- Building Permit
- Business License and/or Tax Permit
- Health Permit
- Occupational Permit
- Signage Permit
- Zoning Permit.
If you need help with the costs of registering a business in Texas, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.