How to get a small business license in Texas

While there are no statewide requirements for general business licenses, many municipalities and counties mandate that you acquire the proper documentation based on your service area, business structure, and industry.

This article outlines some of the main steps involved with securing business licenses and permits in Texas.

Steps for obtaining a Texas business license

The exact requirements for securing a business license in Texas vary by region. Below are some of the most common requirements you are likely to run into while setting up your business.

1. Choose a business structure

There are many ways to structure your business, with each option offering pros and cons. Here are common incorporation structures that entrepreneurs pursue when applying for a Texas small business license.

• A sole proprietorship can be the easiest to set up. However, it offers little protection since your personal assets are not separated from your business.

• A general partnership consists of two or more parties and offers minimal protection similar to that of a sole proprietorship. It is possible to form a limited partnership that may help protect the owners’ personal assets from those of the business.

• A limited liability company (LLC) can offer more protection than a sole proprietorship or general partnership. However, since an LLC member is not considered an employee, you will be required to pay self-employment taxes when running your business.

• A corporation also provides owners with more protection than a sole proprietorship or a general partnership. However, this legal structure is also more expensive to set up and maintain – making it a less common option for small business owners.

READ: How to register your small business

2. Identify your niche or industry

Nearly all business licenses require that you obtain an employer identification number (EIN), and one may be necessary for tax purposes. Depending on the nature of your business, there may also be zoning or permitting requirements involved with securing a Texas small business license.

For example:

• Restaurants have to pass food inspections.

• Taxi drivers need authorization to operate within city limits.

• Retailers must apply for sales tax permits and resale certificates.

• Plumbers need professional licenses and certifications.

Because these niche-specific requirements vary so much, the best way to navigate the licensing landscape is to consult this Texas business licenses and permits guide or visit your city hall. Alternatively, you can check with local industry or union groups that operate within your sector.

3. Complete a Texas business license application

When registering your business in Texas, preparing the following information can help you save time:

• The type of business (including your incorporation papers)

• A business or “doing business as” (DBA) name

• A phone number and physical address (even for online businesses)

• An employer identification number (i.e., tax ID)

In addition, be prepared to give personal information, including your name, date of birth, Social Security number, banking details, and home address.

Ready to get started?

Applying for licenses and permits is only part of the process of starting a small business. You’ll need a way to accept payments, track inventory, manage employees, and more. At Clover, our POS systems and cloud-based software can help you handle all of these tasks, allowing you to run your business more efficiently.

To learn more about our suite of POS and payment solutions, schedule a consultation with a Clover Business Consultant today.

This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.

Editorial Team

By state, Guides, SMB, Start a small business

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