How to Register a Business in Texas: Formation, EIN, and Taxes

To register a business in Texas, you file a Certificate of Formation with the Texas Secretary of State and pay a $300 filing fee. That single filing creates the legal entity, but it isn’t the whole job: you’ll also need a federal Employer Identification Number, state tax accounts with the Comptroller, and a designated registered agent before the business is ready to operate. Filing online, the formation itself can clear in a few days.

Pick a Business Structure First

Your structure decides which form you file and how much personal liability protection you get. The two common choices are a limited liability company, which uses Form 205, and a for-profit corporation, which uses Form 201.¹² Both ask for the entity’s name, purpose, registered agent, and governing persons, but the governance details differ.

LLCs are the default for most small businesses: liability protection without the formality of a board, shareholder meetings, or corporate minutes. Corporations fit better if you plan to bring in outside investors or go public later. The Texas Business Organizations Code recognizes other structures, including limited partnerships and professional associations, but LLCs and corporations cover the vast majority of new filings.

When you describe the entity’s purpose on the form, Texas lets you keep it broad. Most filers use language like “any and all lawful business” rather than locking themselves into a narrow description.¹ Professional entities such as medical practices or law firms face extra naming and purpose restrictions under the same code.

Clear Your Name Before You File

Check availability before you file anything. The Secretary of State’s SOSDirect portal lets you search existing entity names for conflicts, and the office will also do a preliminary check by phone.³ Texas bars names that are deceptively similar to an existing registered entity, so minor spelling tweaks or added punctuation won’t get you around a conflict.

Planning to operate under a name different from the one on your Certificate of Formation? You’ll need an assumed name certificate (a DBA), filed with the county clerk in each county where you keep a business office. Those certificates run for a maximum of 10 years.⁴ Sole proprietors and general partnerships operating under anything other than the owner’s legal name must file one too.

Line Up a Registered Agent

Every Texas entity has to designate a registered agent to accept legal documents on the entity’s behalf: service of process, state correspondence, lawsuit papers.⁵ Pick someone reliable. Miss a lawsuit at the registered address and you can end up with a default judgment.

The agent needs a physical street address in Texas. A P.O. box alone doesn’t qualify unless it’s part of a commercial mail service that is itself the registered agent. The agent must also provide written or electronic consent to serve, using a form developed by the Secretary of State’s office, and you should keep a copy of that consent in your own records.⁵

You can name yourself, another member or officer, or a professional registered agent service. Commercial services usually run $100 to $300 per year and spare you from having to be physically available at the registered address during business hours.

File the Certificate of Formation

The Certificate of Formation is what actually creates your entity. On Form 205, an LLC specifies whether it is manager-managed or member-managed and then lists the name and address of each initial governing person; at least one is required.⁶ On Form 201, a corporation lists the initial board of directors instead. These names and addresses become public record.

The filing fee is $300 for both LLCs and for-profit corporations, and for most other entities formed under the Texas Business Organizations Code.⁷ Pay by credit card or a pre-funded SOSDA account for online filings, or send a check or money order with mailed submissions.

You can submit the Certificate three ways: through the SOSDirect online portal, by fax, or by mail to the Secretary of State’s office in Austin.⁸ Electronic filing is fastest. Paper submissions take at least one additional business day just to be logged in before review begins.⁹

Double-check every field before submitting. Errors in the entity name, registered agent information, or governing persons are the most common reasons filings get rejected or need correction, and each round costs more time and possibly another fee. Once approved, you’ll receive a Certificate of Filing and a file-stamped copy of your original document. Keep both. Banks want to see them when you open a business account, and you’ll need them to prove the entity’s existence in contracts or audits.

Get a Federal EIN

An Employer Identification Number is your business’s federal tax ID. You need it to file tax returns, open a bank account, and hire employees. The IRS issues EINs for free, and online applications are processed immediately during business hours.¹⁰

The application asks for the name and Social Security number of a “responsible party,” the individual who controls or manages the entity. For a single-member LLC that’s usually the owner; for a corporation it’s typically a principal officer. The EIN is permanently tied to the entity once issued.

Register for Texas State Taxes

Texas has no personal income tax, but it does impose a franchise tax (sometimes called the margin tax) on most entities formed or doing business in the state. For the 2026 report year the rates are 0.75% for most entities and 0.375% for businesses primarily engaged in retail or wholesale trade.¹¹ If your annualized total revenue is $2.65 million or less, you fall below the no-tax-due threshold and owe nothing for the 2026 report year.¹²

You still have to file. An annual franchise tax report and either a Public Information Report or an Ownership Information Report are due by May 15 each year, no-tax-due or not. Skip them and the Secretary of State can forfeit your entity’s right to transact business in Texas. A forfeited entity loses the ability to sue or defend itself in Texas courts, and officers, directors, partners, or members can become personally liable for certain debts of the entity.¹³

If you sell or lease tangible goods or provide taxable services, you also need a Sales and Use Tax Permit from the Comptroller before collecting any sales tax from customers.¹⁴ The permit itself is free. The state rate is 6.25%, and local jurisdictions can add up to 2%, for a combined maximum of 8.25%.

If You’ll Hire Employees

Hiring triggers a separate set of registrations at both the state and federal level.

Register with the Texas Workforce Commission for state unemployment insurance tax once you start paying wages. New employers in 2026 pay an entry-level rate of 2.70% on the first portion of each employee’s wages, and TWC requires electronic quarterly reports and tax payments.¹⁵
Pay federal unemployment tax (FUTA) at an effective rate of 0.6% on the first $7,000 of each employee’s wages, assuming Texas maintains its unemployment trust fund balance.¹⁶
Complete Form I-9 to verify each employee’s identity and employment eligibility within three business days of their start date, and retain the form for as long as the person works for you plus either one year after they leave or three years after their hire date, whichever is later.¹⁷
Report every new or rehired employee to the Texas Workforce Commission.¹⁵

One Texas quirk: private employers are not required to carry workers’ compensation insurance.¹⁸ Going without it costs you certain legal defenses in personal injury suits brought by employees, which is why most employers with meaningful payroll carry it anyway.

Write Your Operating Agreement or Bylaws

The Certificate of Formation gets your entity on the books, but it doesn’t spell out how the business actually runs. That’s what internal governance documents are for: an operating agreement for an LLC, bylaws for a corporation.

An LLC operating agreement defines who owns what percentage, how profits and losses are split, what happens when a member wants out, how managers are appointed, and how major decisions get voted on. Texas doesn’t require you to file this document, but skipping it is risky. Without a written agreement, member disputes default to the Texas Business Organizations Code, which may not match what anyone intended.

Corporate bylaws do the same work for corporations, governing how the board operates, how meetings are called, how officers are appointed, and what voting thresholds apply. Following your bylaws consistently matters for liability protection: courts are more willing to “pierce the corporate veil” and reach shareholders personally when the entity ignores its own governance rules or commingles personal and business assets.

Check Local Permits and Zoning

State registration doesn’t cover every permit you need to open your doors. Many Texas cities and counties require their own business permits, occupational licenses, or health department approvals depending on industry and location. A restaurant, for example, needs health permits and fire inspections that have nothing to do with the Secretary of State.

Zoning is a separate layer. Some Texas cities have comprehensive zoning ordinances that restrict what type of business can operate where. For a home-based business, check whether deed restrictions in your neighborhood prohibit commercial activity; those are private agreements enforced by homeowners’ associations and can shut you down regardless of what the city allows. Contact your city or county permitting office early. Sorting these out after you’ve signed a lease is far more expensive than doing it beforehand.

Keep the Entity in Good Standing

Registration isn’t a one-time event. Texas doesn’t require a separate annual report the way some states do, but a few recurring obligations keep your entity alive.

File the franchise tax report and accompanying Public Information Report or Ownership Information Report by May 15 each year, even if you owe no tax. Failure to file leads to forfeiture.¹¹
File an update with the Secretary of State whenever your registered agent or registered office address changes. A lapsed agent means a missed lawsuit and potentially a default judgment.⁵
Keep your EIN, franchise tax, and sales tax accounts active and current. Delinquent accounts with the Comptroller can independently trigger forfeiture.¹¹

As long as those filings go in on time and your registered agent information stays current, your Texas entity remains in good standing with the state.

1
Office of the Texas Secretary of State. Form 201 – Certificate of Formation For-Profit Corporation
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Office of the Texas Secretary of State. Form 205 – Certificate of Formation Limited Liability Company
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Office of the Texas Secretary of State. SOSDirect – An Online Business Service From the Office of the Secretary of State
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Office of the Texas Secretary of State. Name Filings FAQs
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Office of the Texas Secretary of State. Registered Agents
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Office of the Texas Secretary of State. Form 205 – Instructions for Certificate of Formation Limited Liability Company – Section: Article 3 Governing Authority
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Office of the Texas Secretary of State. Business Filings and Trademarks Fee Schedule
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Office of the Texas Secretary of State. Filing Options
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Office of the Texas Secretary of State. Business Filings – Status
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Internal Revenue Service. Get an Employer Identification Number
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Texas Comptroller. Franchise Tax
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Texas Comptroller. Texas Franchise Tax Report Forms for 2026
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Texas Comptroller of Public Accounts. Texas Franchise Tax Public Information Report and Ownership Information Report – Section: Filing Requirements
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Texas Comptroller. Sales Tax Permit Requirements
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Texas Workforce Commission. New Texas Employer Information
16
U.S. Department of Labor. FUTA Credit Reductions
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U.S. Citizenship and Immigration Services. Instructions for Form I-9 Employment Eligibility Verification
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Texas Department of Insurance. Employer Resources