Posted by: Apr 05, 2020

Small Business License in Texas

The short answer to the question of how to obtain a small business license in Texas is that you don’t need a business license.

Texas does not require you to have any kind of general business license.

However, you will have to register your business with the state, and you will likely have to obtain some types of licenses or permits pertaining to your specific business.

Certificate of Formation

When you start a new business, you need to file a certificate of formation with the Texas Secretary of State.

The exact information you need to provide in this form may vary a bit depending on the type of business entity you are forming, but will generally include:

  • The business name and entity type;
  • The business’s registered agent and their contact information;
  • A list of directors, managers, and/or members; and
  • The purpose of the business entity.

An experienced business formation attorney can help you determine what type of entity is best for your business.

Tax Registration

Businesses have to pay taxes, so when you set up a new business, you will need to register with both the IRS and the State of Texas.

If you have employees, you will also need to register for an Employer Identification Number (EIN). You will need this number to file your taxes and report employee wages.

If your business sells goods or services that are subject to sales tax, you will also need a sales and use tax permit from the Texas Comptroller.

Permits and Licenses 

Even though you don’t have to obtain a small business license in Texas, you will likely need other types of licenses or permits, depending on the type of business you have.  

Texas law requires permits and licensing for certain activities to protect the health, safety, and welfare of the public. If your business involves any activity that could potentially harm other people or the environment, you will probably need some kind of license or permit.

This includes businesses where you handle other people’s money.

The State of Texas provides a complete guide to licensing requirements for different professions. We’ve highlighted some of the most common types of licenses and permits below.

Professional Licenses

There are many professions that require state licensing before a person can actually practice their profession.

If you practice your profession without a license, you can be subject to criminal penalties, including fines and even incarceration. Some professions that require licenses include:

  • Accountants,
  • Architects,
  • Attorneys,
  • Auctioneers,
  • Brokers,
  • Cosmetologists,
  • Engineers,
  • Medical professionals,
  • Mental health professionals,
  • Pilots, and
  • Real estate agents.

If your customers are putting their health or financial well-being in your hands, it is likely that you will need to maintain a professional license.

Environmental Permits

Some businesses involve activities that may be hazardous to the environment, such as:

  • Agriculture,
  • Auto repair,
  • Construction,
  • Distilleries,
  • Gas stations,
  • Logging,
  • Manufacturing,
  • Medical facilities,
  • Mining, and
  • Transportation services.

If your business is likely to have some impact on the environment, you will probably need one or more permits relating to:

  • Water use,
  • Air pollution,
  • Hazardous waste disposal,
  • Pesticide use,
  • Medical waste disposal, or
  • Petroleum storage.

Failing to obtain the correct permits can lead to serious fines.

Sign Permits

Many businesses use signs for advertising, such as:

  • Auto dealers,
  • Gas stations,
  • Hotels,
  • Restaurants, and
  • Retail stores.

If you intend to advertise your business with signs outside the building, you will probably need a sign permit.

How Can an Attorney Help?

If you are ready to start your small business, the Curley Law Firm can help. Adam Curley has experience forming both large and small companies. He can help you determine what type of business entity to set up, prepare the paperwork you will need, and identify the permits and licensing required for your business. Call Adam Curley today at 832-225-3448 or send an online message to start making your business dream a reality.