Texas has its own culture, from the music of Austin to the beaches of Galveston. There isn’t a state with as large of a personality as the Lone Star State. Before you head to Texas to start a business, you need to know all the rules about picking a business name.
In Texas, like most states, you have to make sure the business name you want is available.
We created a guide to help you through the process. It will tell you what you need to know about picking a business name, plus some other facts about starting a business in Texas you may find helpful.
Go to:
How to check business name availability in Texas
As mentioned, you can’t just pick any name for a Texas business, it must be unique and available. How do you find out if a certain name is available? Here’s how:
1. Go to the Texas Secretary of State website
There is a search tool that you can use to check name availability
2. Create an account
The State of Texas required an account be established before running searches. It charges a $1 fee per search that is used to support the site. There are also fees for certificates ordered and any filings.
3. Enter your search terms
These can be general keywords or an exact name.
4. Hit search
A list of businesses associated with the key terms or names will pop up.
After running a Texas business name search, you have two options: You can reserve a name or you can register the name. You should reserve the name if you aren’t planning to set up the business immediately.
Texas allows business owners to reserve a name for 120 days for $40.
To do so, you’ll fill out a quick form and provide the payment.
Again, you don’t need to reserve a name if you plan to officially set up your business with the state of Texas, but if you’re just doing some homework and plan to set up your business later, reserve the name now so it’s not taken when you’re ready.
5. Check domain name availability
We created a tool that makes it easy.
How to name your Texas business
Now that you know a little more about the business landscape in the state, it’s time to start generating a list of names for your business. To do so, follow these steps:
1. Write down basic details about your business
Start by creating a verbal picture of your business. Think about what your business will offer and who it will serve. Will you sell a specific product or service? Who’s going to buy it? Jot down a few details about your company as a starting point.
Next, start creating a list of adjectives that describe your business. Think in terms of keywords. What keywords would your customer use to find the product or service that you offer? Write them down.
2. Stay away from initials and hard-to-say words
There are plenty of businesses that include initials, like A&J Plumbing, but consider upping your game with something a bit more creative and descriptive.
The same goes for names that are hard to say. If your last name is Stackowaski, for example, it’s not conducive to a business name because it’s too hard to pronounce.
3. Don’t pigeon-hole your business
Be careful not to select a name that limits your company’s potential growth. Think about where your business will be in five, ten, even twenty years, and take that into consideration when creating a name.
A company named Bob’s Bargain Books, for example, is a good name, but what if they plan to sell vintage records and cassettes down the road? The name only refers to books, so when vintage music is added people won’t associate it with the store.
4. Consider using a name generator
At this point, you probably have a list of a few ideas. Rather than brainstorm a bunch of different combinations, why not try a name generator? You simply enter a few of the adjectives that you came up with into the search bar and you’ll get a list of possible names.
Name generators can take some of the hassles out of creating a name. Most name generators will only show you available names too, which is helpful.
Check out some of Namechk’s name generators below:
What kind of business structure is right for your Texas company?
As you research available business names in Texas, you’ll also want to think about what kind of business you want to establish. There are a handful of options to choose from, but some of the most common are Sole proprietorship and LLC.
- A sole proprietorship is ideal for small businesses with no employees that want to test their business out. There’s virtually no paperwork to set up this kind of business, which is a plus. However, a sole proprietorship is not a separate business entity, which means you’re financially and legally responsible for any problems that might arise.
- An LLC, or limited liability company, provides a certain amount of liability protection. Your personal assets and your business are separate with this business structure, which means if the business is sued or goes bankrupt, you will not be forced to use your personal cash reserves to bail the business out.
Steps to register your Texas business
Ready to set up your business in TX? Here’s what you do:
1. File your Certificate of Formation
Visit the Texas Secretary of State website and fill out the Certificate of Formation. To fill this out, you’ll need to have an available business name, address, and contact information.
2. Name a registered agent
You’ll also need to name a registered agent. A registered agent is the point-person for your company who will receive important documents like tax notices or legal documents.
A registered agent must be trustworthy and be available during regular business hours when documents are delivered. The business owner can serve as the registered agent in Texas, or another person or company can be named.
You might decide to name your accountant or co-founder, for example. You can also hire a registered agent service to serve in this role. Northwest Registered Agent, ZenBusiness, and Bizee are a few examples. These companies will receive documents on your behalf and notify you of their arrival.
3. Pay the filing fee
Every state charges a filing fee to file LLC formation documents with the government. In Texas, the cost is $300.
4. Wait for approval
Texas will review your application and typically provides approvals within five business days. Once approved, your business is officially set up.
Our picks of the best registered agent services
Texas small business facts
Before you start considering business name availability in Texas, take a look at these small business statistics from the U.S. Business Administration:
- Texas small businesses employed 4.8 million people, or 45.1% of the private workforce, in 2017.
- The number of proprietors increased in 2018 by 3.0% relative to the previous year.
- Small businesses created 227,487 net jobs in 2019. Firms employing fewer than 20 employees experienced the largest gains, adding 118,889 netjobs. The smallest gains were in firms employing 100 to 499 employees, which added 49,674 net jobs.
- In the fourth quarter of 2019, Texas grew at an annual rate of 2.9%, which was faster than the overall US growth rate of 2.1%. Texas’ 2019 overall growth rate of 4.4% was up from the 2018 rate of 4.0%.
- In April 2020, the unemployment rate was 12.8%, up from 3.5% in April 2019. This was below the April 2020 national unemployment rate of 14.7%.
- Private-sector employment decreased 10.2% during the 12-month period ending in April 2020. This was below the increase of 2.7% during the prior 12-month period.
- Firms with 20 to 99 employees have the largest share of small business employment.
- The median income for self–employed individuals at their own incorporated businesses was $53,686 in 2018. For self–employed individuals at their own unincorporated firms, median income was $26,084.
FAQs
To further help entrepreneurs, check out these frequently asked questions about starting a business in Texas:
Why is it so important to check on business name availability?
Texas will not allow two businesses in the state to have the same name. There are many reasons for this, but at its core, it’s to avoid any confusion. For example, if someone plans to sue Bob’s Fruit Stand and there are two of these companies in the state, things can get complicated quickly.
All businesses must have a unique name. And, you can’t just add a hyphen to a name to make it different. Each name must be “distinguishingly different.”
Do I need a small business license in Texas?
The state doesn’t require a general business license but cities and counties do. It’s also good to check to see if professional licenses, certifications, permits, and authorizations are required on either the local, state or federal level.
Why is Texas a good state to start a business?
Many people start or move a business to Texas because it has a low tax burden. There aren’t corporate or individual income taxes for business owners or startups and there aren’t state property taxes either. All of these are advantageous to those starting or owning a business.
Can you run a business out of your home in Texas?
Yes, but you still have laws to follow. You will need to verify whether the business fits within local zoning laws and apply for permits or licenses required by state or local authorities. You will still need to comply with any laws that would limit the impact on your neighbors.
How long does an LLP last in Texas?
Out-of-state LLP registrations to do business in the state has a one-year limitation but may be renewed for an additional one year before it expires.
How do I register my business online in Texas?
It’s easy to register your business name with the Texas state government online. You can register your business name directly with the state or use an LLC formation service to do all your filings.
What’s the cost of getting a tax identification number in Texas?
There is no fee for applying to get an employer identification number in Texas but you must file a Form SS-4.
Is there a fee to apply for a sales tax permit in Texas?
No, Texas doesn’t charge a fee to apply for a Texas sales tax permit. It is a free process.
Is a wholesale license required in Texas?
Texas requires a sales tax permit to sell goods or services within the state. It takes about a month to get a permit after applying. The state requires the completion of wholesale certification when buying goods that will be sold for wholesale.
Is there a sales tax in Texas?
There is a 6.25% state sales and use tax in Texas. This is applied to all retail sales, rentals, leases, and taxable services. Services like repair services, dog grooming, jewelry repair are taxable. However, other services are excluded. Those are professional services like accounting, barbers and salon stylists, attorneys, interior design services, and auto mechanic services.
Contracting and handyman services to restore, remodel or repair the property are also excluded from taxation although you would need to check about certain large-scale projects or multi-housing projects because they may not fit the exclusion clause.
What is the fastest-growing city in Texas to start a business?
Dallas-Fort Worth is the fastest-growing city in Texas. It is also the fastest-growing area in the country. The area grew by 131,767 people over the past decade with a current population of 7.5 billion people.
Can I transfer my LLC to Texas?
Yes, as long as the business is allowed by both states and that it is permitted by your current LLC documents. You still have to make sure the business name isn’t taken in Texas and then file a plan and a certificate of conversion before filing a certificate of formation.
CHK_ YOUR NAME RIGHT NOW
Use our engine to quickly check your content right now!
