Step 2: Pick a Business Name

Picking a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that, the better).

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if you’re name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use google at a fairly advanced level you can reasonably clear a name yourself. Tip: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
• Make sure your company name choice is available by searching Texas’s Department of State: Division of Corporations business name database. Note: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).

Step 3: Register the Business

Each state has it’s own requirements for registering a business. Now that you’ve chosen a business structure and picked your business name, here are the requirements to register your business in Texas.

How to form an LLC in Texas

How to Incorporate in Texas

How to File a DBA in Texas

Step 4: Obtain your Federal Employer Identification Number (FEIN or “EIN”)

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

You can read more about corporate tax laws in Texas on the Texas Department of Taxation and Finance website.

TIP: We will obtain your EIN for you if you we form your company.

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Step 5: Open Company Accounts: Bank and Credit Cards

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork b) your EIN c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

Top Business Banks in Texas:

• Amegy Bank
• Bank of America
• BBVA Compass Bank
• Branch Banking and Trust
• First National Bank of Texas
• Comerica Bank
• Capital One

TIP: Our business formation service includes a free banking resolution for your use.

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Step 6: Obtain Business Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

The Go Big in Texas website is a great business portal with information covering revenues, services, and business licensing in Texas.

Tip: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Step 7: Annual and Ongoing Requirements

DBA: Your Fictitious Business Name should be valid for 5 years (unless you change company name or other information listed on the FBN) at which point you’ll need to renew it with the county.

LLC: Unlike most states, Texas does not require LLCs to file annual reports. They must file annual tax franchise reports with the CPA instead

Corporation: Every year you’ll need to file the “Statement of Information” or Annual report which updates the state on your business address and other things. There is a $400 late fee for all for-profit corporations who do not make the May 1 deadline.

Franchise Taxes: Texas corporations are required to file an annual report with the Texas Comptroller of Public Accounts, due May 15 every year (or the next business day, if May 15 falls on a holiday). There is a $50 penalty for a late filing of a franchise tax, which is calculated as a percentage of the company’s net income for that year.

Important Texas Contacts

Texas Secretary of State

Texas Taxation & Labor Departments