Texas Foreign Qualification

The state of Texas is home to approximately 2.8 million small businesses including domestic and foreign entities and these businesses are considered as one of key drivers of the state’s economic growth. One of the reasons for Texas LLC foreign registration is that the state has a pro-business environment thanks to a plethora of business incentives, grants and financial assistance, skill development training programs, and Foreign Trade Zones (FTZ) among others. A Texas foreign business registration will enable you to access all state and federal incentive and business assistance programs that will not only lower the initial startup costs but also help balance long-term operating costs.

What is Texas foreign qualification?

Foreign qualification Texas refers to the registration of a new business with the office of secretary of state. Once you complete Texas foreign business registration, your company will be able to legally pursue growth opportunities in Texas (across home state borders) without having to incorporate or form a new business entity. This is normally the first step towards expanding any business to a new state.

If you have formed a domestic corporation in New York then this will be considered as your home state for business purposes. Now, if you plan to expand your operations to Texas then will you need to incorporate again in this state? No! You will be required to undergo the process of foreign qualification in Texas, for which you will have to submit the required forms according to the type of business with the Secretary of State pursuant to TX Bus Orgs § 9.004 (2019).

Doing business in Texas

Doing business in Texas especially if your company has been formed initially in another state translates into the fact that it is a foreign company. Hence, the operation of such a company will be governed by 2019 Texas Statutes, Business Organizations Code, Title 1 – General Provisions, Chapter 9 – Foreign Entities. So what does “doing business in Texas” mean? It simply refers to the practice of transacting or conducting different business related activities in any state other than its home state or state of initial formation. When this happens, the said business has to apply for Texas LLC foreign registration or foreign incorporation.

• If your business has or owns a warehouse in Texas
• If your company owns a store in the state
• If you have an office or taken commercial space for business activities
• If your company has single or multiple sales representatives in Texas

Texas Foreign Qualification Process

If you have a business and it is already operational in any other state like Wisconsin or Georgia and you are planning to expand your business in Texas then you will need to apply for Texas foreign business registration. The process varies from one state to another and filing of foreign qualification Texas application would be different for different forms of business. It is important to note that failure to register with the state can lead to civil penalty and even injunction from doing business in Texas.

Texas foreign Corporation registration

If you are planning to form a foreign corporation in Texas then you will have to file an application for registration, which was earlier known as the certificate of authority. You will have to file Texas foreign corporation registration with the office of the Texas Secretary of State. This application will ensure you are able to “transact business” in the state. The following steps will help you to identify the requirements for Texas foreign business registration.

• Name Registration: The first step towards foreign qualification in Texas is to identify a business name and check name availability. In other words, you will have to conduct a Texas foreign entity search so that you can set forth the entity name that has to be registered. After conducting the search, you will be in a position to finalize the business name. Once confirmed, you can file the “Application for Registration of an Entity Name” pursuant to Sections 5.151 to 5.154 of the Texas Business Organizations Code (BOC). The name registration is an integral part of foreign qualification process and will be effective for a period of one year unless you file a notice of withdrawal. You will also have to provide a “Certification of Existence” along with the name registration application. The fee for filing the name registration application is $40.
• Registered Agent: An important aspect of Texas foreign corporation registration is designation of a registered agent for the service of process pursuant to TX Bus Orgs § 5.201 (2019). You can hire IncParadise as your Texas registered agent as we are familiar with the process of foreign qualification and one of our top services is assisting with Texas foreign business registration.
• Certificate of Existence or Good Standing: A certificate of existence is also known as a certificate of good standing and will be issued by the home state or the state where the foreign entity was initially formed. The certificate will be issued by the office of the Secretary of State or the Tax Department of the home state. You will be required to submit the certificate of existence along with the Texas foreign corporation registration application as well as the application for name registration.
• Foreign Corporation Qualification: The final step in the Texas foreign business registration process is to file the “Application for Registration of a Foreign For-Profit Corporation” (Form-301) pursuant to TX Bus Orgs § 9.004 (2019). Some of the important information you need to provide include name of the registered agent and their registered office, Statement of Purpose, Certification of Existence, information of foreign entity’s jurisdiction of formation and incorporation date, and federal employer identification number (FEIN) among others. The application for Texas foreign corporation registration has to be submitted in duplicate along with the filing fee of $750 to the office of the Secretary of State in Austin, Texas.

Texas foreign LLC registration

If you are an owner of a limited liability company and you want to expand your business to Texas then foreign qualification is necessary. You will need to apply for Texas foreign business registration as this certificate will ensure you can legally operate in the state. There is a process for Texas LLC foreign registration and it is as follows:

• Name Registration: Choosing a business name is an important aspect of Texas LLC foreign registration. It is important to ensure your chosen name follows the name availability rules as set by Section 5.153 of the Texas Business Organizations Code (BOC). Once you have chosen a name, you need to check name availability, which means it should be a unique name and is not being used by any other business in the database of the Texas Secretary of State. Once you have conducted your Texas foreign entity search and finalized a unique name, it is time to file the “Application for Registration of an Entity Name” pursuant to Sections 5.151 to 5.154 of the Texas Business Organizations Code (BOC). The process for name registration is fairly simple although you will be required to file a “Certification of Existence” along with the application. The filing fee for name registration application is $40 and it will be effective for a period of one year unless you file a notice of withdrawal.
• Registered Agent: One of the important aspects of the process of Texas LLC foreign registration is designation of a registered agent pursuant to TX Bus Orgs § 5.201 (2019). You can hire IncParadise as your Texas registered agent as we are familiar with the process of foreign qualification and have the necessary expertise to provide service of process as required by Texas Business Organizations Code.
• Certificate of Good Standing: The Certificate of Good Standing is an important official document that certifies the existence of a company and strengthens the fact that the said company is up to date where tax filing and state annual requirements are concerned. It is known as a certificate of existence in Texas and is a mandatory requirement for Texas foreign business registration. It is important to note that the certificate of good standing will be issued by the state of where the LLC has been originally formed.
• Foreign LLC Qualification: The culmination stage in the process of Texas LLC foreign registration is to file the “Application for Registration of a Foreign Limited Liability Company” (Form-304) pursuant to TX Bus Orgs § 9.004 (2019). Some of the important information you need to provide include Certification of Existence, name of the registered agent and their registered office, Jurisdictional Information, Federal Employer Identification Number, and name and address of governing persons among others. The application for Texas foreign business registration has to be submitted in duplicate with the office of the Texas to the office of the Secretary of State along with the filing fee of $750.

Need Any Assistance in Applying for Texas Foreign Qualification?

If you have already registered a corporation or a limited liability company but want to expand your business in Texas then you will have to apply for foreign qualification in Texas. As one of the leading Texas registered agents, IncParadise can assist you with the process of Texas foreign business registration or incorporation.

Doing Business in Texas

Doing business in Texas can bring growth and expansion for small and medium sized enterprises as it is one of the few states in the U.S with a strong economy and a pro-business climate. The real Gross Domestic Product (GDP) of Texas was $1.7 trillion U.S. dollars in 2020 and it is home to approximately 2.8 million small businesses. The state has been ranked #1 state in terms of exporting for 19 years in a row and #1 state in tech exporting for consecutive 7 years. Texas has reported a 60% increase in its export trade and the total output by businesses in June 2021 was $31.6 billion. The state is ranked amongst the top 5 in CNBC’s annual Top States for Business rankings while entrepreneurship has become the “Texas state of mind”.

Why do businesses prefer doing business in Texas?

Texas has become quite the favorite amongst first time business owners and entrepreneurs and this is owing to the numerous benefits the state offers including Texas small business grants. Texas has a vibrant economy and a robust infrastructure that supports and promotes business growth and expansion. If you plan on doing business in Texas then there are several factors and advantages that can help your business to achieve its mission, objectives, and profitability. Some of the factors are:

• A Pro Business Tax Environment – One of the top reasons for doing business in Texas is the tax environment. The state has conservative tax policies along with streamlined regulations, which makes it ideal for starting a new business. Texas does not have any personal or corporate income tax and is considered to have a really low tax burden as compared to other states in the country. Texas small business incentives related to taxes is one big advantage like the sales tax exemption for manufacturing machinery and equipment and franchise tax exemption applicable for sellers, manufacturers, or even installers of different types of solar energy devices.
• Business Innovation Platform – Texas is steadily moving forward towards a complete industry transformation as entrepreneurs doing business in Texas take advantage of the innovation and invention platform and environment. Some of the greatest industry-changing innovations have their origins deep rooted in the state and surprisingly, Texas has won more awards for a pro business climate and small business job growth than all of the 49 states combined. The state has innovation hubs, accelerator and Incubator programs, agencies that directly sponsor innovation and a host of Texas small business grants for entrepreneurs and startups.
• Small Business Financing and Capital – Startups and small business owners often need funding in the initial phase of their business. The Texas small business grants program is one such avenue that creates funding opportunities for businesses based on size, industry, and location. There are non-profit lenders, Texas angel investors, United States Department of Agriculture (USDA) financial backing, incubator funds, Texas small business funding for women, and startup business loans among others.
• Deep Talent Pools – One of the primary requirements of every new business is a skilled workforce and Texas has plenty of that. In fact, the state has a growing workforce experiencing more than 3% increase in its civilian work force. There are top tier universities in the state that keep adding to the talent pool each year. Some of the big names include University of Texas at Austin, Rice University, Texas A&M University, and University of Houston among others. There are several training programs and skill development funds for business employees and entrepreneurs as a part of Texas small business incentives program and Texas small business development programs.

Small Business Incentive Programs and Grants in Texas

When you start a new business in Texas, one of the beneficial aspects is that you will have access to a variety of Texas small business grants and incentive programs. Every business has an initial cost attached to their inception and this cost varies according to the type of business activity and setup. Some businesses like those started from home have lower initial costs but some businesses like retail stores or restaurants have higher initial startup costs. In order to manage costs, entrepreneurs can apply for loans through Texas small business funding programs and even participate in incentive programs that provide a variety of tax credits and other benefits to offset long-term operational costs.

Incentive Programs

Incentive programs are governed or administered by state agencies and the Federal government. Each state in the US offers different types of state incentives to help small businesses in achieving different objectives. For example, the Texas small business grants provide financial relief or funding to startups. Similarly, there are a host of incentive programs that are targeted at encouraging higher productivity and increasing employee retention rates among others. You can qualify for these incentive programs when you start doing business in Texas. Some of the top incentive programs in the state are:

Texas Enterprise Fund

The Texas Enterprise Fund (TEF) is a type of business incentive fund that awards Texas small business grants to business entities that are planning a new project like opening a new facility or expansion. Cash grants for each applicant are calculated based on a uniform analytical model. The analytical model takes into account several factors like:

• Average wage of all new employees
• Expected timeline of hiring
• Number of jobs being created
• Capital investment by the business
• The business sector in which the company is active

Events Trust Fund

The Event Trust Funds (ETF) program is a Texas small business incentives program, which comprises of three different funds, which are:

• The Events Trust Fund
• Major Events Reimbursement Program
• Motor Sports Racing Trust Fund

Texas Enterprise Zone Program

One of the top Texas small business incentives programs is the Enterprise Zone Program (EZP). This program is a type of sales and use tax refund program that has been specifically designed for encouraging private investment as well as job creation in some of the most economically distressed areas within the state. The refund is administered by the office of the Texas Comptroller and to qualify for this refund, your company should be situated within the Enterprise Zones. You can check the Enterprise Zone Map to identify the distressed counties or zones. As a part of the program, if you are doing business in Texas in the enterprise zone then it is important to know that the maximum allowable refund varies on the basis of capital investment and maximum number of jobs allocated.

For Example:: Your Company located in the Texas enterprise zone starts a “Half Enterprise Project” with capital investment varying from $40,000 to $5,000,000 and the maximum number of jobs allocated is 250. The maximum potential refund through this Texas small business incentives program will be $625,000 and the refund per job allocated would be $2,500.

Product Development and Small Business Incubator Fund

The Product Development and Small Business Incubator Fund (PDSBI) is a type of Texas small business grants program with the objective of providing asset-backed loans to small business incubators or accelerators and product development companies based in the state. The program consists of two separate funding programs, which are:

• Product Development
• Small Business Incubator

Skills Development Fund

The Skills Development Fund is an innovative Texas small business incentives program that has been created to assist the technical colleges and Texas public community to finance tailored job training courses for local businesses. This business incentive program is administered by the Texas Workforce Commission and the grant is provided to startups and companies. The maximum fund made available is $10 million and this Texas small business funding will allow businesses to address the training requirements of their existing and new workforce.

Are you planning to start a New Business in Texas?

Financing and Capital for Small Businesses

One of the primary requirements of new businesses is access to financing and capital and this is where Texas small business incentives programs can be quite helpful. There are two types of financing available in the majority of the states and they are business grants and the traditional funding options. The objective of both these types of financing options is to ensure small and medium sized enterprises, newly found corporations, and individuals running home-based businesses can fulfill their short-term and long-term business requirements. Let’s take a look at the different types of Texas small business funding sources available:

• U.S. Small Business Administration – The U.S. Small Business Administration (SBA) has a presence in all the states including Texas. SBA offers loans as well as training to help small businesses with growth and expansion. They also provide Texas small business funding for crisis times also known as disaster loans. It is important to note that the agency will not be lending directly to a business owner but instead set guidelines for various loans and Texas small business grants made by community development organizations, partnering lenders, and various micro-lending institutions. SBA has offices in Dallas/Fort Worth, El Paso, Harlingen, Houston, Lubbock, and San Antonio. The loans offered by the agency for small businesses are 7(a) loans, 504 loans, and Microloans.
• Texas Angel Investors – An angel investor is known by many names like a seed investor, private investor, or even angel funder. Although, they don’t specialize in Texas small business grants but assist small businesses and startups to funding and capital. Angel investors are high-net-worth individuals focusing on providing financial backing to small businesses, startups, or entrepreneurs. They provide Texas small business funding in exchange for ownership equity in a company and it can be a one-time investment or an ongoing injection of funds. The Texas angel network is divided into the following:
  • North Texas Angel Network
  • Central Texas Angel Network (CTAN)
  • Alliance of Texas Angel Networks (ATAN)
• Non-Profit Lenders – There are different types of Texas small business funding loans and lenders including banks and credit unions. The non-profit lenders or non-profit micro lenders provide loans to those small businesses that may not qualify for any other type of loan. A non-profit lender would ideally focus on loans with amounts under $50,000. Some of these loans may be no-interest or even low-interest loans. Non-profit lenders in the state that you can apply for a loan while doing business in Texas include:
  • Community Development Financial Institutions (CDFIs)
  • PeopleFund
  • BCL of Texas
  • LiftFund
• Texas Workforce Training Grants – The workforce training grants are administered by the Texas Workforce Commission (TWC). This is a Texas small business grants program that specializes in providing grants for small businesses. The primary objective of this type of Texas small business funding or grants is to ensure their employees can be inducted into various on-job training programs for skills enhancement. The training programs are provided through technical or community colleges as well as the Texas Engineering Extension Service (TEEX).
• Federal Grants – Grants are financial awards that are administered by both federal and state government agencies. The top two Texas small business grants administered by federal agencies are the Small Business Innovative Research (SBIR) program and the Small Business Technology Transfer Funding (STTR) program. The SBIR and STTR grant programs are highly competitive Texas small business funding programs, which are aimed at encouraging small businesses to engage in Federal Research and Development(R&D) with the idea of promoting commercialization. The other objectives of these federal grants programs are to stimulate technological innovation and increase commercialization of innovation among others. There are three categories of federal grants and they are:
  • Project grants
  • Formula grants
  • Block grants

Ready to Start Business in Texas?

Every business needs a little financial assistance when it comes to establishing its operations and Texas small business incentives and grants play a key role in providing the much needed funding. If you are thinking of doing business in Texas then the first step is to register a business as you can apply for these grants and incentives only after new business formation or incorporation.

Texas Business Tax

It is easy to register a new business but there are several Texas state requirements that a business has to fulfill in order to enjoy active status. One such requirement is filing of Texas business tax. Along with Florida, Washington, and Nevada; Texas is one of nine states where there is no personal income tax. The most common forms of taxes in the state are the sales tax and franchise tax and then there are business specific taxes including Texas corporation taxes. It is important to note that you need to have an Employer Identification Number (EIN) as a business and Social Security Number (SSN) as a sole proprietor to file taxes in Texas.

What taxes do businesses pay in Texas?

The truth is that no one wants to file annual tax returns but if you form a business in any state including Texas, you may have to file certain taxes. On a better note, entrepreneurs favor Texas to form their new businesses because it is a highly tax friendly state. This is more so, because the state does not have any personal Texas business tax or income tax. The state and local tax burden as a percentage of state income in Texas is 8.0% as compared to some of the other states like Indiana at 8.6%, Wisconsin at 9.4%, and Ohio at 9.2%. At the same time, there are business specific taxes like Texas LLC taxes and business activity specific taxes like the sales tax that a company may be required to file.

Franchise tax

Franchise tax is not imposed by the federal government as it is a state tax. The Texas franchise tax is different from other states that impose these taxes. The rule is that any taxable entity conducting its business in Texas is required to register with the state including limited liability companies including series LLCs, partnerships, S corporations, professional corporations, and professional associations among others are liable to pay a franchise tax. It is also important to note that sole proprietorships except for single-member LLCs are not required to file franchise taxes.

• Total revenue minus the cost of goods sold (COGS)
• Total revenue times 70 percent
• Total revenue minus $1 million effective from Jan 1, 2014
• Total revenue minus the compensation

Texas income tax

Texas has no state income tax or in other words, the Texas Constitution disallows any personal income tax (there is no income tax code). Instead, Texas relies on other forms of taxes like collecting sales and use tax as well as property tax. There are certain forms of taxes applicable only for business owners and their companies. All business structures except partnerships, which have to file an informational return, must file a Texas business tax annually. Some forms of income taxes filed in Texas are:

• Self-Employment Tax – This type of income tax is applicable for those individuals who are working for themselves like freelancers. This tax covers Social Security and Medicare taxes.
• Estimated Tax – This type of tax is filed on the income and includes self-employment tax. This is a type of Texas LLC taxes or corporation taxes.
• Employment Taxes – This is an integral part of Texas corporation taxes if a corporation has employees. Employment tax includes Social Security and Medicare, Federal income tax withholding, and Federal unemployment (FUTA) tax.
• Excise Tax – This is a form of Texas business tax applicable on those entities that use different types of equipment and facilities. This is also applicable for businesses that receive income through facilitation of certain services, and manufactures or sells specific types of products.

Texas sales tax

One of the most important types of Texas business tax is the sales tax although it is also referred to as the sales and use tax. This tax is applicable if a business sells taxable goods or services in the state. There is a state sales or use tax as well as a local sales or use tax. A business while transacting in the state has to collect 6.25% state sales or use tax.

How are Texas Businesses taxed?

If you form a new business in Texas then the tax status of the type of entity you form is an important area to consider. Different types of entities will be taxed differently and the type of tax may also vary. Some businesses may be required to file Texas franchise tax as well as sales or use tax while others may need to file property taxes as well. Let’s look at the different types of entities and their taxations.

Texas LLC Taxes

Since LLC is considered to be a pass-through entity just like an S corporation, they are not liable to pay federal Texas LLC taxes by default and instead members have to file personal tax returns. The income earned from the business gets distributed amongst the existing members of the LLC and hence each member is required to file Texas business tax calculated on the amount they have received from the business.

Taxes of a Texas C Corporation

A C corporation is also known as a traditional corporation and it is subjected to a standard business tax or the Texas franchise tax. The franchise tax is based on the revenue generated by the corporation annually.

Example: If you formed a Texas corporation and the total revenue generated in 2021 is $500,000 then it is less than the threshold of $1,130,000. Hence, your corporation will not be required to file any Texas corporation taxes or franchise taxes.

Taxes filed by Texas S Corporation

An S corporation is also known as S subchapter and it is a legal business entity. In fact, S Corporations are popular designations and existing Texas LLC or C Corporations often opt to be taxed under Subchapter S of the Internal Revenue Code (IRS). Since, it is a pass through entity; the business is not subjected to Texas corporation taxes. However, you will be required to file Texas franchise tax based on the annual revenue generated by the business. Individual shareholders are not subjected to state taxes on their income.

Texas Taxes for Sole Proprietorship

A sole proprietorship business also known as a sole trader is an unincorporated business with a single owner. A sole proprietor is required to report all business income and losses through their personal income tax return. This basically means that a sole proprietorship business is not taxed separately but the owner will be taxed on all the profits earned by the business, which is total income minus expenses. Sole proprietors in Texas are also required to make contributions towards Medicare and the Social Security systems and these contributions are classified under Texas business tax as “self-employment taxes”.

Texas Partnership and Taxes

There are different types of partnerships like limited partnerships (LPs), general partnerships, and limited liability partnerships (LLPs). If you start a partnership business in Texas then it will be subjected to Texas franchise tax. The exception to this tax is applicable for general partnership businesses that are solely and directly owned by natural persons. Whatever type of partnership you form; individual partners will not be subjected to state tax on any income distributed amongst partners.

Ready to Incorporate your Texas Company?

Whether you are planning to form a limited liability company (LLC), traditional corporation, or an S Corporation in Texas, the new business formation process can be quite extensive, and time consuming. This is where IncParadise comes in. We can provide your business with meaningful assistance as we are an expert incorporation service provider in Texas and can help to register your LLC or corporation in Texas.

Business License in Texas

Texas is considered as one of the economically resilient states and has made some astounding economic recoveries in the past. It is home to 25 Fortune 500 companies including American Airlines Group, Hewlett Packard Enterprise, Energy Transfer, Valero Energy, and Dell Technologies among others. If you are planning to become a part of the growing economy then one of the important requirements is a Texas business license.

What business license do I need in Texas?

Texas is home to some of the strongest industries known for faster and higher growth include retail trade, leisure and hospitality, business and professional services, manufacturing industry, financial services, and the energy sector among others. The type of Texas business license you require will depend on the industry your business is in and the type of activity your company specializes in. The State of Texas does not require you to obtain a Texas business license or general license. If your business is transacting in the state then the certificate of formation from the office of Secretary of State along with an assumed name certificate provided by the office of the county clerk is considered as a general business license.

• Sales Tax Permit
• Licenses and Permits for specific business activities
• Professional and occupational licenses

Sales Tax Permit

There are no general business licenses applicable in Texas but a sales tax permit is a type of general Texas business license for entities that have a physical presence in the state. A sales tax permit is required if:

• You are conducting a business in Texas
• You intend to lease or sell taxable services and tangible personal property
• You maintain a physical presence in the state like distribution center, warehouse etc.
• Your company has a sales representative operating within the state responsible for direct sales of any taxable goods
• You promote an event that involves selling of taxable goods

Texas Licenses or Permits for Specific Business Activities

Different types of business activities require different Texas business licenses , and permits. Comprehensive state-level permit information and licensing requirements in Texas are provided by the Business Permit Office, which is a division of the Governor’s Economic Development and Tourism Division. The management of business licenses and permits is the responsibility of the Texas Department of Licensing and Regulation (TDLR). The licenses and permits have been divided under more than 150 categories of activities thus enabling a proper Texas business license search by entrepreneurs and new business owners. Let’s look at an example to understand this well.

Example: If you start a new business that provides a “Day Activity and Health Services (DAHS)” facility then it needs to be licensed to operate in the state. You will have to complete a Texas business license application online using the Texas Unified Licensure Information Portal (TULIP) portal. You will also be required to submit additional documents like the fire marshal inspection report and a health authority letter. The license fee is $75 and the license is valid for a 3-year period. This license is issued by the Texas Health and Human Services.

Want detailed information about Texas Business Licenses?

Texas Business Licenses for Specific Occupations and Professions

There are several businesses where the sole proprietor, single or multiple owners start a company offering a specific service. According to the type of service offered, the owners may require occupational, professional and facility business licenses in order to operate. You can conduct a Texas business license search to choose from over 250 professional, occupational, and facility business licenses available. Some of the licenses would require you to take an exam in order to get licensed.

Example: If you set up a plumbing business then you need to first obtain a Texas business license for plumbing occupation. You will have to take an examination like the “Master Plumber Examination” organized by the Texas State Board of Plumbing Examiners. The examination fee is $175 and the initial license fee is $75.

Texas Department of Licensing and Regulation

The Texas Department of Licensing and Regulation (TDLR) is one of the top state agencies and is primarily responsible for business licensing and regulating a wide variety of businesses, occupations, equipment, and facilities in Texas. You can conduct a Texas business license search based on your business activity or occupation. You can also apply for and obtain a Texas business license online, and also handle yearly renewals.

Texas Business Licenses for Home Businesses

Due to the high accessibility to the internet and the convenience of working from home, many entrepreneurs in Texas are opting for home-based businesses. The question is do you need to obtain a Texas business license for such a business. You will require licenses or permits for your home-based business depending on the type of business activity.

Example: If you start a business as a “Behavior Analyst” working or meeting your patients at your residence or providing advice and therapy to clients over the internet then you will need to apply using the Behavior Analyst / Assistant Behavior Analyst License Application. You will be required to provide your Behavior Analyst Certification Board (BACB) certificate number and expiration date. The license fee for Behavior Analyst is $165 and you will have to submit the license application along with this fee.

TDLR License Data Search (Active license only)

Once you obtain a Texas business license and want to check its expiration date and other relevant details, how do you do it? You can conduct a Texas business license search by accessing the Texas Department of Licensing and Regulation (TDLR) database. You can search this database only if your license is active. You can also access this portal to download the file format for license applications of different types of business activities.

Documents Needed for Your Texas Business License Application

When you apply for a Texas business license there are several types of documents that you may need to submit along with the application. There are some business specific documents that vary according to business activity and there are documents that are generic and applicable to all entities. The most common documents that you might need to submit in order to obtain a Texas business license are:

• Tax ID Number – Depending on the type of business, you will need to submit a copy of your tax ID number along with the Texas business license application. Businesses like sole proprietorship or home based single owner businesses require to provide Social Security Number (SSN) while LLCs and corporations require Employer Identification Number (EIN) disclosure to obtain Texas business license. If you haven’t applied for a tax ID then IncParadise can assist you with EIN application.
• Articles of organization or Articles of incorporation – In the state of Texas, you have to file a “Certificate of Formation” to register your entity with the office of the Secretary of State. The certificate of formation is applicable for LLC, For-Profit Corporation, Nonprofit Corporation, Professional Corporation, Professional Association, Professional Limited Liability Company, and Limited Partnership. A copy of the formation documents have to be submitted to obtain a Texas business license.
• Any insurance policies for your business – Depending on the type of business activity, you may need to apply for and obtain insurance policies like construction companies are required to possess general liability insurance. Some of the other types of insurance that companies may opt for includes workers’ compensation insurance, commercial auto insurance, and liability and property insurance among others. The Texas Department of Insurance (TDI) provides detailed information on the type of business insurance your company can invest in. You may need to submit certificates of insurance along with your Texas business license application.
• A statement detailing your organization’s mission – An organization’s mission statement is an integral aspect of the growth and business plan of any company. It provides a brief explanation of the reasons for the existence of the said company. The mission encompasses the organization’s purpose as well as its short-term and long-term goals and objectives. The mission statement is sometimes required during filing license or permit application and to obtain a Texas business license.
• Your tax ID for selling retail goods – A new business in Texas is required to obtain sales and use tax permits in Texas if they are selling tangible personal property, sales of taxable goods, or maintaining a warehouse in the state. The tax ID for selling retail goods is also known as the seller’s permit and you can obtain this by filing the required application with the Texas Comptroller of Public Accounts (CPA). A copy of this tax ID would be required when applying for a Texas business license.

Building & Zoning Permits

One of the key components of a Texas business license is building and zoning permits. The Department of Planning and Development of each county or city of Texas oversees, regulates, and issues building and zoning permits. Each city or county in Texas has its own Zoning and Building Code and pursuant to these codes, a business owner has to first apply for a Zoning Permit followed by application for a Building Permit if required.

Need any Assistance in Obtaining Your Texas Business License?

If you plan to start a new business in the state of Texas then there are certain requirements you have to fulfill to make your business operational. One of the most important requirements is that of applying for and obtaining a Texas business license. A business may require single or multiple licenses and permits, which is where the Business License Research Report service by IncParadise can provide you with the right information and guidance.

Doing Business As or DBA in Texas

Texas has a strong economic climate and pro-business environment and today, it is home to 2.8 million small businesses. Small businesses in Texas include corporations, LLC, sole proprietorship, partnership, and other forms of organization structure. Some of these businesses opt for a business name while others apply for a Texas DBA online. However, there are several aspects to be considered prior to applying for an assumed name certificate Texas like what a DBA really is and how it can be useful for your entity.

What is DBA in Texas?

Every business in Texas or any other state in the USA requires a legal name or a true name to become operational. This is especially true for a sole proprietorship or partnership business where the legal name is most often the name of the business owner. If an individual or company decides to conduct their business under another name, then this name is considered to be a DBA (Doing Business As) or assumed name and for such a business filing a DBA in Texas becomes necessary.

Let’s look at an example to understand this: An individual named Carol Dawn wants to form a sole proprietorship in Texas. If the name of her business is Carol Dawn’s Gourmet Services then filing a DBA in Texas is not required. However, if she opts for a name that has just the first name like Carol’s Gourmet Services then she would be required to file a Texas DBA online application. The DBA has to be filed in the second case as the new name doesn’t have her full legal name.

For Example: If Carol Dawn wants to offer different products or services like a restaurant, a mobile food truck, and a cafe then what are her options? She can set up an LLC or a corporation under a generic name like Dawn Foods Inc., and then file a Texas DBA online application for each of the businesses as in the restaurant (Dawn Fine Dining), mobile food truck (Dawn’s Hot Dogs), and cafe (Dawn’s Cappuccino). This process will help you in controlling your paperwork and costs while enabling business expansion.

Filing DBA in Texas for LLC and Corporation

There are different types of businesses to choose from if you are planning to form your new business in Texas. You can choose to form a Sole Proprietorship, Limited Liability Company, General Partnership, Corporation, Limited Partnership, and Limited Liability Partnership. Whatever the type of business you choose, you also need to create a business name for the same. Now, if you plan to operate your business under a name that is different from your own name then filing a DBA in Texas is important.

Do Texas DBA Name Search

One of the key aspects of filing a DBA in Texas is conducting an assumed name search. The search is important as it will help determine if your chosen trade name is available or not. If you are asking how do I look up a DBA in Texas then there are two options:

• You can conduct a name availability search with the Texas Comptroller of Public Accounts
• You can also conduct a search with the county office for example; you can use Tarrant County Clerk Online Services or Harris County Document Search Portal to check availability of assumed names

File Texas Assumed Name Certificate

The state of Texas requires businesses transacting in this state under any name other than the owners name to apply for an assumed name certificate Texas (Form-503) pursuant to Texas business and commerce code, TBCC Sec. 71.051 and Sec. 71.101. The filing of DBA in Texas has to be with the office of the county clerk or the Secretary of State and will be valid for a period of 10 years from the date of its filing. We at IncParadise can help you to register your DBA in Texas and also provide information pertaining to different aspects of the filing process.

• The filing of DBA in Texas takes place at the county clerk’s office and hence you will have to submit the applications with the office of the county clerk.
• You can check with the county clerk’s office or the county record office to determine the fee applicable. The forms and fee may vary from one county to another for example: the filing fee for Assumed Name Certificate in Bexar County is $14.00 for one owner and $0.50 for each additional owner while the filing fee in Travis County is $24.00 plus an additional $0.50 for each owner’s name being listed.
• If you file an assumed name certificate in Texas with the office of the Secretary of State then the filing fee would be $25.
• A Texas DBA online application will contain information as follows:
  • The assumed name under which an entity will conduct its business
  • The physical address of the business
  • Name and address of owners
  • Type of business
• Depending on the county where you are filing a DBA in Texas, it can be submitted in person or by mail. In some counties you may be able to file a Texas DBA online application.

Need Any Assistance in Filing Texas DBA?

The process of filing a DBA in Texas may look difficult as you have the options of registering with the Secretary of State (SOS) or the County Clerk Office. We at IncParadise possess knowledge and expertise regarding various aspects of DBA filing including applying for an assumed name certificate in Texas.

Sole Proprietorship in Texas

Texas presents just the right business and economic platform for entrepreneurs and new business owners to transform their ideas into business. Entrepreneurs prefer to start a sole proprietorship in Texas as the state constitutes a strong entrepreneurial spirit, which is one of the drivers of innovative thinking. The state is also home to innovation corridors, innovation districts, and business incubators that are integral to the $1.7 trillion economy of Texas. When you think in terms of business resources and support then state agencies like the Texas Economic Development Corporation, the North Texas Small Business Development Center, and the office of the Texas Secretary of State among others are instrumental in providing meaningful guidance on how to start a sole proprietorship in Texas.

What is a sole proprietorship in Texas?

A sole proprietorship in Texas is a type of entity that is owned and run by an individual. Since it is operated by a single person, there is no distinction between the business and the owner. This doesn’t imply that a sole trader is a one-man organization as they can hire employees. If you start a sole proprietorship in Texas then you can use a business name or a trade name, which is also known as DBA (Doing Business As) and is different from the legal name. If you search for a sole proprietorship in Texas, you will be surprised to find that most ong>home-based businesses and several internet-based businesses are sole proprietorships.

Important features of sole proprietorship in Texas

A sole proprietorship is considered as the most basic type of business. There are several features that make it beneficial to start a sole proprietorship in Texas especially if you are a first time business owner. The key features are:

• A sole proprietorship can be started from home or from a commercial space. The greatest advantage of this form of business is that it has less capital requirements and hence the overall cost to start a sole proprietorship in Texas is low.
• This is a single owner business and hence all operation and management related decisions will be made by the individual or the sole owner without any interference as faced in corporations and LLC’s
• If you are wondering how to start a sole proprietorship in Texas then as compared to other forms of business entities; you are not required to register with the office of the Secretary of State (SOS).
• There are no annual maintenance requirements and lower Compliance requirements with the office of the secretary of state and hence no recurring costs or filing fees.
• If you file a sole proprietorship in Texas then you will have to file the profit and loss report of the business along with your individual income tax return.
• A sole proprietorship business is not required to pay any unemployment or payroll tax.
• The profits earned through this form of business go to the owner or sole proprietor and doesn’t have to be split amongst shareholders or partners like in other forms of businesses.

Steps to Start Sole Proprietorship in Texas

Sole proprietorship is one of the simplest forms of business that one can undertake and this simplicity is in terms of formation and operation. To start a sole proprietorship in Texas, you will require fulfilling certain state-based requirements, which are almost basic in nature. We have considered certain aspects of the business and worked out a step-by-step approach that will provide an insight into how to start a sole proprietorship in Texas.

1. Prepare a business plan

A business plan is an integral aspect of any form of business whether a sole proprietorship or a business corporation. A business plan helps the business owner in identifying the areas to focus on in order to make the business operational and successful. Depending on the type of business activity, an entity may have several components and identifying them before you file a sole proprietorship in Texas can be highly beneficial.

• Executive summary: A summary of what you expect to accomplish through your business
• Company Description: This will include key information pertaining to the business, objectives, and target customers
• Market Analysis: The analysis covers an in-depth study of the market you wish to launch your product or services in
• Competitive Analysis: This section analyzes your competition in the current market or around the location of your company
• Products and Services: Detailed information pertaining to the product or services offered by your company
• Marketing Plan & Sales Strategy: This section focuses on the promotion of your products or services and throws light on how to achieve sales targets
• Financial Projections: This section focuses on the financial goals and expectations along with anticipated revenue in the first 12 months of business operation

2. Choose Texas business name

A business name is an integral part of any business as it is what prospective customers would recall. A business name helps in creating a brand image of the company. If you start a sole proprietorship in Texas then you can use your own name as the name of the business or choose to use a trade name, which is also known as a DBA (doing business as) name. Once you have identified a business name, you need to conduct a name search for sole proprietorship in Texas. You can check name availability with the Texas Comptroller of Public Accounts and also the Trademark Electronic Search System (TESS) of the U.S. Patent & Trademark Office.

3. File Assumed business name

An assumed business name is considered to be a business name, which is different from its legal registered name. It is also known as a DBA (Doing Business As) or fictitious business name and is often used to file a sole proprietorship in Texas. In order to ensure legal right of using this type of business name, you will need to apply for an assumed name certificate Texas using Form-503.

Do you want to start a Sole Proprietorship business in Texas?

4. Get EIN

EIN or Employer Identification Number is also known as the Federal Employer Identification Number (FEIN) and is a unique number that is assigned by the Internal Revenue Service (IRS) to business entities. According to the IRS, a sole proprietorship will require an EIN if the following are valid:

• If you have employees
• If you file tax returns related to Excise, Employment, Alcohol, and Tobacco and Firearms
• If you have a Keogh plan
• If you are involved with certain types of organizations like Non-profits, Estates, Trusts, or Farmers’ cooperatives among others

5. Obtain necessary licenses and permits

After you start a sole proprietorship in Texas, the immediate requirement would be a business license. Different states have different licensing requirements but the common factor is that without a license or permit, businesses cannot become operational. You can conduct a business activity search for sole proprietorship in Texas as the type of license and the fee varies according to the type of activity and location of the entity.

6. Open a bank account for your Texas business

To file a sole proprietorship in Texas means your company is not a separate identity legally. Hence, it becomes extremely important to open a bank account in the name of the business. This will ensure your personal account including expenses and gains are separate from that of the company. This type of account is also known as a checking account and it has certain benefits like:

• The account will help in keeping your company finances separate and organized
• A business bank account will legitimize your business
• It will organize your accounting records and create a clear audit trail
• The account will ensure easy filing of your tax return
• You can leverage business debit cards and enjoy overdraft protection

7. Report and pay taxes

One of the important aspects of the process of how to start a sole proprietorship in Texas is submitting reports and filing taxes. There are two types of annual reports in Texas and they are Public Information Reports and Ownership Information Reports. If you start a sole proprietorship in Texas then you may be required to file the Ownership Information Reports (OIRs). This report has to be filed with the Texas Comptroller’s office.

Ready to Start a Sole Proprietorship Business in Texas

A sole proprietorship also known as an individual entrepreneurship or sole trader is one of the simplest forms of Texas business. It is a type of unincorporated entity and you can start a sole proprietorship in Texas without having to register with the office of the Secretary of State. If you are wondering how to start a sole proprietorship in Texas then IncParadise can provide meaningful assistance by helping you in starting your sole proprietorship business in Texas.