Posted by: Feb 17, 2022

starting a cleaning business in texas

If you’re looking to start a business in Texas but aren’t sure precisely what type of business you want to operate, a cleaning or janitorial business can be a great option. 

Cleaning businesses represent one of the most versatile operations throughout the state. No matter the industry, almost everyone finds themselves in need of a cleaning crew at some point. Thus, starting a cleaning business in Texas could provide a lucrative opportunity to cash in on an already existing need. 

If you have questions about how to start a cleaning business in Texas, look no further. We have prepared a short guide that offers insights on opening a cleaning or janitorial business in The Lone Star State. When you are ready to take the next steps in forming your business, contact The Curley Law Firm.

How to Start a Cleaning Service in Texas: An Overview

If you are wondering how to start a janitorial business in Texas, there are a few important things you will need to know. Here are 4 steps to take before starting a cleaning business in Texas.  

Step 1: Choose an Entity Type for a Cleaning Business in Texas

When you start a business, your first step often involves selecting what type of business entity you want to form. Some common entity types include:

  • Sole proprietorships,
  • General partnerships,
  • Limited partnerships,
  • Limited liability companies (LLCs), and
  • Corporations. 

Each entity type has its own benefits and drawbacks. An important consideration for the type of entity you choose is the number of people involved in your business. If you plan to open a cleaning business on your own, a sole proprietorship might fit your needs best. Alternatively, if you plan to hire multiple employees, you might consider an entity type that will give you some liability protection, like an LLC.

Sole Proprietorship

A sole proprietorship might fit your business if you plan to do all of the work yourself. Sole proprietorships are easier and typically cheaper to form than other business entities. Texas does not require a sole proprietorship to register with the Secretary of State in order to conduct business. If you want to operate your cleaning business under a name other than your own, you will need an assumed name certificate, often referred to as a “doing business as” (DBA) name.

For liability purposes, you and your sole proprietorship are viewed as one. Thus, you are individually liable for the debts and obligations of your cleaning business.

General Partnership

A general partnership is formed when two or more partners agree to operate a business for profit. In most cases, you and your partner will draft a partnership agreement that outlines the internal procedures of the partnership, the distribution of profits and losses, and other information about the operations of your business. Like a sole proprietorship, Texas does not require general partnerships to register with the Secretary of State. Unless stated otherwise in the partnership agreement, general partners split losses equally, and the general partnership structure does not provide any personal liability protection.

Limited Liability Company (LLC)

To form an LLC, Texas requires you to file a Certificate of Formation with the Secretary of State, wherein you can outline the management structure for your LLC. The LLC business structure gives its members personal liability protection. That means an LLC member’s liability is limited to the amount of their investment. Additionally, LLCs receive favorable pass-through tax treatment. The flexibility and favorable tax benefits of LLCs make them popular entities for small businesses. 

Step 2: Determine What Forms You Need and Register Your Entity

Once you have decided what type of legal business entity you want, you are ready to file the required forms to officially register your business with the state. Regardless of which entity type you select, most business forms you need to submit can be filed electronically with the Texas Secretary of State using the SOSDirect web portal. 

Step 3: Obtain Any Necessary Licenses and Permits 

Texas does not require a general business license to operate within the state. However, you might need other licenses and permits to stay compliant with state and local law. 

For example, Texas requires a Sales & Use Tax Permit from the Texas State Comptroller Office if a business is selling tangible personal property, leasing personal property, or selling a taxable service within the state. Residential house cleaning services are taxable in Texas, so your cleaning business will likely need a Sales & Use Tax permit. 

In some cases, the city where your cleaning business is located could require a general business license. Check with your local city and county government offices to determine whether you need a city-specific business license.

Step 4: Understand Your Tax Obligations

Your business’s tax obligations vary depending on the type of business entity you form. 

For example, if you operate a cleaning business as a sole proprietorship, you will report all of your business income on your personal income tax return. 

Conversely, if you form an LLC, your entity will receive “pass-through” tax treatment. That means that the LLC itself does not pay taxes on its business income. Instead, the LLC members pay taxes on any income they earn from the LLC. 

Understanding your tax obligations is a crucial step in running a successful business. Thus, if you have questions or concerns, be sure to speak with a tax professional.  

Contact the Curley Law Firm for Assistance Starting a Cleaning Business in Texas

Founding attorney Adam Curley has over 10 years of experience helping clients navigate their legal needs in Texas. In fact, a vast majority of his practice has been spent helping his clients as they work to form, navigate, and grow their businesses. 

No matter what entity type you select for your cleaning business in Texas, having an experienced business attorney to give you advice throughout the process can help you avoid any filing mistakes and get your business formed quickly and correctly. 

Ready to move forward? Contact The Curley Law Firm today to learn more about how we can help you form your Texas business.