Texas Business License and Permits
After forming a Texas LLC, owners often ask whether the next step is a business license. The answer depends on what the company does, where it operates, and whether it sells taxable goods or services.
Filing the Certificate of Formation creates the LLC. It does not settle every permit question. Texas does not require a general business license. The Governor's Business Permit Office says the certificate of formation from the Secretary of State serves as the general business license requirement found in other states, though specific business activities can still need their own permits or licenses.
Potential License Requirements
Business licenses are typically a post-formation check. Form the entity first, then review the permits that apply to the business activity.
A sales tax permit is one Texas permit category with specific filing details. A business engaged in business in Texas that sells or leases tangible personal property or sells taxable services must register for a sales tax permit with the Texas Comptroller. The application is filed online through eSystems, there is no state filing fee, and the Comptroller says to allow 2-3 weeks for the permit.
Texas sales and use tax has a 6.25% state rate on retail sales, leases, and rentals of most goods and taxable services. Local jurisdictions may add up to 2%, for a maximum combined rate of 8.25%.
Other requirements can depend on local rules or the industry. Common permit categories include city tax permits, health permits, building permits, zoning permits, occupational permits, and seller permits. To find the state-level license or permit that applies to a business activity, use the Texas Business Licenses & Permits Guide from the Governor's Business Permit Office, and contact the local county and city government for local requirements.
Starting a Texas LLC
To register a Texas LLC, file Form 205, the Certificate of Formation for a limited liability company, with the Texas Secretary of State. The filing can be submitted online through SOSPortal or by mail, and the state filing fee is $300.
Every domestic or foreign filing entity must maintain a Texas registered agent and registered office. The registered office must be a physical Texas address where service of process and official notices can be received during business hours. It cannot be only a P.O. box unless the commercial mail or message service is itself serving as the registered agent.
The company-name step needs a separate Texas check. A Texas LLC's name must contain the words limited liability company or limited company, or an abbreviation of one of those phrases, and it must be distinguishable in the Secretary of State's records from other entity names.
After formation, keep the annual state calendar separate from license and permit checks. Texas LLCs do not file a separate annual report with the Secretary of State. The recurring state compliance item is the franchise tax filing and Public Information Report with the Texas Comptroller, due May 15 each year.
A sole proprietorship is a separate question. A sole proprietor who does business under a name other than their own files an assumed name certificate with the county clerk in each county where the business has an office. The Governor's Business Permit Office says that certificate serves as the general business license requirement found in other states.