How to Start an Electrical Company in Texas
To operate an electrical company in Texas, you must hold an electrical contractor license from the Texas Department of Licensing and Regulation. As a licensed electrical contractor you are authorized to hire master, journeyman and apprentice electricians for work on construction projects around the state. To obtain an electrical contractor license, you must either be a licensed master electrician yourself or have a licensed master electrician in your employ at all times. Additionally, you must obtain sufficient insurance before a license will be issued to you.
Download an Electrical Contractor License Application packet from the Department of Licensing and Regulation. Read through this document to familiarize yourself with the licensing requirements and procedure.
Hire a licensed master electrician to associate with your contractor license. Of course, this step is moot if you hold a master electrician license yourself. Note that a master electrician can only be associated with a single Texas electrical contractor. You must identify the master license-holder and obtain his signature on your application.
Register your business with the appropriate authorities. First, file an assumed name certificate with your local county clerk’s office. Second, if you intend to operate as a corporation, limited liability company, limited partnership or limited liability partnership, you must file the appropriate Certificate of Formation with the Texas Secretary of State. Additionally, any company registered with the Secretary of State must also file an additional Assumed Name Certificate. Visit the Secretary of State website to download the forms associated with your chosen business structure. Note that sole proprietorships and general partnerships do not have to register with the Secretary of State.
Obtain a Federal Employer Identification Number (EIN) from the IRS. Visit the IRS website to do this online.
Register your business as a tax entity with the Texas Comptroller of Public Accounts. You can do this online.
Obtain sufficient general liability insurance. Your policy must have a $300,000 limit per occurrence, with a $600,000 aggregate limit. Include a copy of your policy with your application.
Obtain workers’ compensation insurance. You can buy an appropriate policy from insurance agencies across the state. Include a copy of your policy with your application.
Affix your business name and electrical contractor license number on both sides of each of your business vehicles. All letters and numbers must be two inches high.
Complete the application and submit it, along with required documentation and fees, to the indicated address. Upon approval, you will be issued a contractor license.