Setting Up a Sole Proprietorship in Texas

By Heather Frances J.D.

One of the first decisions you must make when starting your own business is to choose which business form you want to use. Many business forms are available for new businesses in Texas, including corporations, limited liability companies, partnerships and sole proprietorships. Each has unique formation and maintenance requirements, which are handled by the Texas Office of the Secretary of State.

Registration

There is no legal distinction between the sole proprietor as an individual and his business. Thus, Texas does not require sole proprietorships to register with the Secretary of State, although other business entities must register. Depending on the type of entity, different registration forms are required. If you begin your business as a sole proprietorship but then wish to change it to another business form, you must register with the state.

Licensing

Though registration is not required, a license may be necessary for certain businesses. State licenses may be required for certain professions or occupations. For example, a lawyer or doctor must pass state licensing requirements and maintain his license regardless of his business form. City or county licenses may also be required based on the business location and type of business involved.

Ready to start your LLC? Start an LLC Online Now

Tax Registration

If your business is required to collect sales taxes, you will need to register with the Texas Comptroller of Public Accounts and receive a permit to collect the tax. If you hire employees, you must collect and pay employment taxes, such as Social Security and unemployment insurance payments. In Texas, unemployment taxes are handled by the Texas Workforce Commission. You may also be required to register your business’s equipment, inventory and machinery with your county appraisal district.

Business Name

If you operate your business under your own name, you do not have to register your business name, but if you choose another name – called an assumed name – you must register this name with your county clerk’s office. To register, you must file an Assumed Name Certificate listing your personal information along with the business’s name, address, type and expected period of operation. You cannot use a business name that is the same or similar to another business.

Ready to start your LLC? Start an LLC Online Now
How to Register a Sole Proprietorship in the State of Florida
 

References

Related articles

How to Start a Sole Proprietorship in Maryland

A sole proprietorship is a common business entity because it is relatively simple to set up and has few filing requirements. In Maryland, new business registrations are handled by the Department of Assessment and Taxation. Although you are not required to register a sole proprietorship with the state, you may be required to obtain state and local occupational licenses and business permits, depending on the type of business. Many sole proprietors are also required to register with the state tax authority.

How to Set Up a New Sole Proprietorship in Indiana

Sole proprietorships are owned by a single individual who operates the business as an extension of his personal affairs. In Indiana, sole proprietorships and general partnerships are classified as informal associations; they are not required to file formation documents with the secretary of state to obtain permission to do business. A sole proprietor, such as a professional photographer, can start his business and operate it within the state at his own discretion. However, if a sole proprietor wants to use an assumed business name, operate in a state-regulated industry, collect sales taxes, hire employees or is located in certain areas of the state, he may have to submit special registrations to conform with requirements in those areas.

How do I Get an Illinois State ID Number for an LLC Company?

Illinois law governs the formation and acts of businesses registered in Illinois, including limited liability companies, or LLC’s. Forming an Illinois LLC requires filing a document, called the articles of organization, with the Illinois Secretary of State. Additionally, an Illinois LLC must obtain a certificate of registration and taxpayer identification number from the Illinois Department of Revenue. Obtaining an Illinois tax identification number requires filing an Illinois Business Registration Application with the Illinois Department of Revenue.

LLCs, Corporations, Patents, Attorney Help LLCs

Related articles

How to Apply for an LLC in Texas

An LLC is a business entity that offers a corporation's protection of limited liability for its owners, known as ...

How to Operate a Texas LLC

A limited liability company, or LLC, is a flexible form of business association that combines the limited liability ...

Guide to Setting Up a Sole Proprietorship in Florida

A sole proprietorship operates as an alter ego of the business owner who runs it. Since the owner is personally ...

Difference in Business License & Registering a Business

Starting a business can be complicated. In addition to hiring employees, finding a location and establishing clientele, ...

Browse by category
Ready to Begin? GET STARTED