How to Start a Sole Proprietorship in Texas

by Christopher Carter; Updated September 26, 2017

Starting a sole proprietorship in Texas is the simplest and least expensive type of entity to form in the state. A sole proprietorship in Texas starts when a single person decides to go into business. Unlike other types of business entities, sole proprietors in the state of Texas are not required to file documents with the state or pay filing fees to begin operating the business. Since a sole proprietorship in Texas does not have a separate identity from the owner of the business, the Texas sole proprietor will be held personally responsible for business lawsuits, debts and other obligations.

Step 1

Choose a name for the sole proprietorship. A Texas sole proprietorship will automatically assume the owner's legal name. A sole proprietor in Texas who wants to operate under a business name other than his personal name must register an assumed business name with the county clerk's office where the sole proprietorship is located. Using an assumed business name is not a requirement to start a sole proprietorship.

Step 2

Determine name availability. A Texas sole proprietor who chooses to operate under an assumed business name must make sure the chosen business name is available for use. The state of Texas does not allow two businesses to share the same name. Furthermore, using another company's business name may lead to lawsuits which may prematurely end the Texas sole proprietorship. Conduct an online name availability check using the Texas Secretary of State website. Contact the county clerk's office where the Texas sole proprietorship operates to determine whether the assumed business name has been registered by another company. Browse through the phone book to ensure that no other local businesses are currently using your assumed business name.

Step 3

File the assumed business name with the county clerk's office where the Texas sole proprietorship is located. Provide the sole proprietor's name, address and phone number. State the length of time you've been using the assumed business name. Sign the assumed business name application. Pay any applicable filing fees. The fee to file an assumed business name in Texas may vary depending on the county where the filing takes place.

Step 4

Get licenses and permits. Sole proprietors in Texas are required to get a business license from the county clerk's office where the sole proprietorship operates. Other licenses and permits the sole proprietorship may need will vary according to the nature of the business. For example, sole proprietors in Texas that provide accounting services will be required to obtain the appropriate state-issued occupational license. Sole proprietors in Texas that sell goods will be required to get a sales and use tax license from the Texas Comptroller of Public Accounts. Contact the county clerk's office where the Texas sole proprietorship is located to determine what local licenses and permits are required to legally operate the business.

About the Author

Christopher Carter loves writing business, health and sports articles. He enjoys finding ways to communicate important information in a meaningful way to others. Carter earned his Bachelor of Science in accounting from Eastern Illinois University.