How Much Does it Cost to Start a Business in Texas?

It takes money to start a small business in Texas.

How much depends on your chosen business structure, niche, and location. 

Your choices determine state filing costs, professional services fees, licenses and permits, fictitious name registration, and ongoing business expenses like franchise tax and registered agent fees. 

Understanding these expenses when starting your business is essential to ensure you can afford the start-up and running costs and have enough cash!

After the costs, you must also know which forms to complete and when to submit them.  

So, our question is, “How much does it cost to start a business in Texas?”

You’re about to find that out and much more!

How much does it cost to register a business in Texas?

The answer to this question depends on your chosen business structure and your start-up’s complexity because those determine your Texas business registration fees.

So, let’s begin there:

Texas business registration fees

You could start a business in Texas as a solo entrepreneur for free without registering with the secretary of state. 

But that option only suits specific niches. 

For many of us, registering a formal separate entity (like a Texas LLC or corporation structure) is necessary when starting a business in Texas because of liability and employee requirements.

So, as it’s your choice of business structure that determines your registration fees, we’ll look at the 5 most popular business entities, starting with the simplest, the sole proprietorship:

Texas sole proprietorship filing fee

Sole proprietorships do not register with the Texas Secretary of State, so they have no filing fee.

However, depending on your name (SP owners use their names), you can file a DBA to trade using a catchy brand name relative to your target audience and niche.

Texas general partnership filing fees (GP)

You can start a general partnership without registering with the Texas Secretary of State and paying a fee.  

GPs can also file a DBA if the partners’ names don’t project the right impression for their target audience. 

Texas limited liability partnership filing fees (LLP)

An LLP is a separate legal entity from its owners. You register it with the Texas Secretary of State’s office using Form 701 (Registration of Limited Liability Partnership), costing $200 per partner.

Texas LLC filing fee

Texas limited liability companies are separate legal entities you register by filing a Certificate of Formation with the Texas Secretary of State’s office online through SOSPortal (which replaced SOSDirect in September 2026) or by mail. The LLC cost in Texas is $300 for formation (the state filing fee). 

Your LLC might also be liable for ongoing costs (like franchise tax); we’ll look at those later in the post.

Registering a foreign LLC in Texas

When you form an LLC in another state and want to do business in Texas, you must register with the Texas SOS as a foreign LLC by completing an Application for Registration of Foreign Limited Liability Company (Form 304) and paying the $750 filing fee.

Texas corporation filing fee

Forming a Texas corporation costs $300. Like an LLC, you must register your business with the Texas Secretary of State using the Form 201 Certificate of Formation. S corporation status is a federal tax election you make afterward with IRS Form 2553; it has no state filing fee. 

Additional registrations related costs

Aside from registering the business entity, regardless of which one you choose, you might need to pay additional costs, depending on your needs. For instance, if you want to reserve your business name before registration, or if you operate under a different business name.

Getting a trademark is also not mandatory yet recommended to provide better protection for your business, as you’ll read in this section. 

Texas business name reservation

Businesses that must register a name with the Texas SOS, like LLCs, LLPs, and corporations, can check that the name is available and reserve a business name (if they are still waiting to form their business) for 120 days for $40.

Filing for a Texas DBA

Businesses that do not register a name with the Texas SOS (like sole proprietors and general partnerships who use their names) can file a DBA to use an assumed/fictitious name. LLCs and corporations also need an assumed name certificate if they trade under a name other than their legal name.

For instance, imagine you want to open a fruit and veg chain using the name “Melon Cauli,” but your name’s Tyler Durden; you’ll need to run a DBA lookup Texas and then file a DBA in every Texas county you operate in.

Sole proprietors and general partnerships file an assumed name certificate with the county clerk in each county where they do business (fees vary by county). LLCs and corporations file Form 503 with the Secretary of State ($25). Either certificate can last up to 10 years, and you file a new one before it expires.

Get a trademark in Texas

A trademark stops other businesses from using your chosen business name, and you can secure it at the state and national level; here’s what it costs:

• State-specific trademarks cost $50 per class and stop others from using your business name in Texas.
• To secure your business name nationally, apply with the US Patent and Trademark Office; the base fee is $350 per class, with surcharges of $100 to $200 per class for incomplete or custom descriptions.

Note: Depending on which structure you run your business under, you could be liable for ongoing costs! For instance, legal entities must appoint a registered agent, and some must file an annual report.

I’ll explain all next:

Ongoing costs when starting a business in Texas 

Cash flow problems are one of the most common reasons small businesses struggle.

A lack of cash flow means your business spends more than it earns; when that happens, you could be toast!

That’s why when learning how to start a small business, you must understand how to calculate your start-up and ongoing costs (fixed and variable) to ensure you keep those “wheels of industry turning.” 

But for now, let’s focus on your ongoing costs when you start a business in Texas:

Texas report fees

The good news is if you form an LLC in Texas, you’re not required to file an annual report. You would, however, need to file a yearly franchise tax report and Public Information Report with the Texas Comptroller of Public Accounts (CPA) office.

• Franchise tax report: The tax is a percentage of your taxable margin, and only businesses with annualized revenue above $2.65 million (2026 and 2027 reports) owe it. Filing is free, but there’s a $50 penalty for filing after the May 15th due date.

Corporations follow the same rules: no annual report, but a franchise tax report and Public Information Report each May 15.

Texas LLC operating agreement

An operating agreement is an internal agreement between LLC members that outlines how they’ll run the business and controls the members, managers (member-managed or manager-managed), and reporting officers’ rights, and other internal LLC affairs, including:

• Managers’ and members’ roles and responsibilities
• Voting rights
• Allocation of profits and losses
• Procedures for a member’s death or departure and admitting of new members

Texas calls it a company agreement, and the law lets it be written, oral or implied. You don’t file it with the state, so there’s no fee, but a written agreement is strongly recommended for Texas LLCs.

Texas registered agent fees

Every Texas LLC must allocate a Texas registered agent to receive official government and business mail (like notification of litigation and legal documents) on its behalf. 

A Texas resident or a business entity authorized in Texas can serve as registered agent, with a Texas street address (not a PO box) and someone available during business hours. LLC owners who’d prefer (for reasons such as a foreign LLC owner and privacy issues) can also choose to employ a registered agent service.

Registered Agent fees vary, but expect to pay between $50 and $300 annually. 

Pro-Tip

When you change registered agents, you must file a “change of registered agent Form 401” with the Texas Secretary of State and pay the $15 filing fee.

In Texas, most businesses need licenses and permits; let’s see if they apply to you next!

Texas business license permits and additional costs

Business licenses come at 3 levels: federal, state, and local. 

Permits are usually state and local. Which you need and what they cost depends on your industry and location. 

Here’s what you need to know about Texas:

Texas business license

Texas doesn’t implement a general state license. Still, when you start a business in the state, you might need a business license Texas at the county or city level and, depending on your niche, a federal level, too!

How to find the licenses your business needs (and what Texas licenses cost):

• For industry licensing requirements (occupational licenses), find the required information on the State of Texas website, and check out the Texas Business License and Permit Guide and follow the relevant links for your niche to see which you need to start a business in Texas.
• For state-level licenses and permits, visit the Business Permit Office (BPO) and the Texas Department of Licensing and Regulation (TDLR).
• For federal licenses, swing over to the Small Business Administration (SBA) website and see if your business needs one.

Texas seller’s license

Texas businesses (including remote ones) that sell tangible, taxable goods or services must get a sales and use tax permit from the Texas Comptroller. One permit covers both state and local sales tax, and you need one for each place of business.

The Lone Star State’s seller’s license (also known as a sales tax permit) is free, but you might need to post a security bond; for further info, contact a Texas Comptroller’s field office.

Now let’s look at those additional costs when you start a business in Texas:

Texas taxes

Texas encourages entrepreneurialism by having no personal or corporate income tax, allowing you to keep a hefty net profit. 

The Lone Star State also offers various incentives, like franchise tax exemption and the Texas Small Business Credit Initiative (TSBCI), to help your start-up.

But even so, your business might have other ongoing tax costs! 

Texas LLC franchise tax

LLCs (and other registered entities) have an annual maintenance cost (i.e., a state fee for doing business in that location) called franchise tax. 

Texas LLCs make an annual franchise tax report with the Office of the Comptroller. Businesses with annualized total revenue at or below $2.65 million (2026 and 2027 reports) owe no franchise tax, and neither do businesses whose calculated tax is under $1,000. 

Note:

Even though your Texas LLC might not owe any franchise tax, you must still file a Public Information Report by May 15 each year. Filing is free, but there’s a $50 late filing fee. 

Texas state and federal taxes

We know Texas doesn’t charge personal income or corporation tax. Still, self-employed business owners must pay federal income tax, and those with employees withholding tax to the IRS and Texas unemployment insurance (UI) tax each quarter.  

Federal income tax works on a sliding scale (i.e., the more you earn, the more you pay).

• Single LLC owners pay tax like a sole proprietor, and multi-member LLC owners, like a general partnership, use the pass-through tax structure where they file all profits and losses on their personal tax returns.
• An S corporation is also a pass-through tax entity (avoiding corporation tax). It also has the advantage of allowing shareholders to become employees and save on self-employment taxes.

Texas businesses may also owe local property tax on business equipment and inventory. Starting in 2026, the first $125,000 of business personal property at each location is exempt. Your county appraisal district can tell you whether you need to file a rendition.

Okay, and that’s what you need to know regarding “how much does it cost to start a business in Texas?”

Well, almost!

Other business-related costs when you start a business in Texas

Filing fees, licenses, permits, business names, and taxes are some expenditures when starting a business in Texas. 

But to promote and run your business effectively, you might need branding strategies and software tools that streamline your operations, which come at an additional cost.

Software tools to streamline operations

Common branding, marketing, accounting and other tools for small businesses include:

• Branding: Visuals like your logo, phrases, designs, fonts, and colors are how you connect with your target audience and differentiate your business from your competitors. Fortunately, branding has never been more accessible or affordable than today, with platforms providing simple-to-use AI logo software that knows which visuals suit your niche and resonate with your ideal clients.
• Website and hosting: Every business needs a website and a reliable host that ensures optimal functionality, ensuring your prospects can find your brand to book appointments or buy products. Costs range from a few hundred dollars with a website builder to several thousand with a professional designer, plus ongoing hosting and domain fees.
• Accounting software: These clever apps (some are free) record your finances, such as debits and credits, which help control your cash flow, simplify your bookkeeping, and reduce your accountancy costs come tax time.
• Point-of-sale (POS) software: New Texas businesses that take customer transactions online or offline require a point-of-sale (POS) system to process them.
• Payroll software: Paying your employees also includes withholding payroll taxes, remitting federal payroll taxes to the IRS and paying state unemployment tax to the Texas Workforce Commission, which can be confusing! Using a software payroll service can simplify your tax requirements and remove stress.

You might not need these software systems when you first start your Texas business, but knowing what’s available and which ones are free ensures you have what your business needs when it needs it. 

Texas business bank account

Entrepreneurs who form an LLC, LLP, or corporation in Texas should have a separate business bank account to separate personal and business transactions to protect their liability.

Opening a bank account in Texas is free, but there might be monthly fees to consider. 

Many Texas banks, however, require a business EIN to open a business bank account. You don’t need an EIN to file a Certificate of Formation, but LLCs with employees or more than one member must get one; sole proprietors and general partnerships might need to apply for one with the IRS (for free) if they cannot use their Social Security Number. 

Texas business insurance

Most insurance policies are optional when you start a business; your chosen cover depends on your industry and business needs.

However, some insurance policies are mandatory when you start a business in Texas and hire employees or use company vehicles.

Mandatory Texas business insurance: 

• Employers must register for and pay Texas unemployment insurance (UI) tax for all employees.
• Business owners with company vehicles need commercial auto insurance to cover employee injury, vehicle damage or loss, and 3rd party claims.

Note:

Workers’ compensation insurance is optional for most private employers in Texas. If you don’t carry it, you must file a notice of no coverage with the Texas Department of Insurance Division of Workers’ Compensation each year (February 1 to April 30) and tell your employees.  

Conclusion

I hope I’ve answered your question. “How much does it cost to start a business in Texas?”

The answer depends on your start-up’s complexity and future goals, such as out-of-state expansion or raising capital.

Your job now is to ensure your start-up earns more than it spends. You do that by minimizing your expenses, like using free accounting software, acting as your registered agent when you form an LLC, buying business combined insurance policies, and using affordable branding solutions.  

Good luck!

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