Starting a business in Houston means working with four levels of government: the IRS, the State of Texas, your county and the City of Houston. This checklist puts the steps in order, names who handles each one and links every fee to its official page. The state steps also cover most of how to start a business in Texas.
How to Start a Business in Houston: The Checklist at a Glance
| Step | Where | Cost | When |
|---|---|---|---|
| 1. Validate and plan | UH SBDC or SCORE Houston (free advising) | $0 | Before any filing |
| 2. Choose a structure | You, with a CPA or attorney | $0 | Always |
| 3. Register | Texas SOS (LLC, corporation) or the county clerk (DBA) | $300 formation; $24 Harris County DBA | Entities always; sole proprietors using a trade name |
| 4. Get an EIN | IRS | $0 | Partnerships, corporations, employers |
| 5. Open a bank account | Your bank | Varies | After the EIN |
| 6. Licenses and permits | State agencies and City departments | Varies | Regulated activities |
| 7. Location check | Houston Permitting Center or your deed restrictions | Varies | Before a lease or a home launch |
| 8. Taxes | Texas Comptroller and HCAD | $0 sales tax permit | Before your first taxable sale; each spring |
| 9. Insurance and hiring | An insurance agent; TWC, IRS and the Texas Attorney General | Varies | Before opening; when you hire |
| 10. Get found and get help | Google Business Profile, a website, local advisors | $0 Business Profile | Before launch |
Step 1: Validate the Idea and Plan for the Houston Market
Filing fees are the cheap part. The expensive mistake is leasing space and buying equipment for an offer nobody pays for, so test demand first (see how to validate a startup idea). Then write a one-page plan: what you sell and to whom, your price, where you will operate (home, lease, mobile or online, which drives your permits) and how many months your budget lasts. The City's Office of Business Opportunity publishes free business guides, including one on business plans. For feedback, UH SBDC offers no-cost advising and SCORE Houston offers free mentoring.
Step 2: Choose a Business Structure (Sole Proprietor, LLC or Corporation)
Your structure decides where you file, what you pay and whether your personal assets are exposed to business debts (see the SBA's structure guide). The Texas side, with franchise tax rules from the Comptroller:
| Structure | Texas filing | Fee | Personal liability | Franchise tax |
|---|---|---|---|---|
| Sole proprietorship | County DBA only if you use a trade name | $0 state ($24 Harris County DBA) | Owner personally liable | Does not file |
| General partnership | County DBA only if you use a trade name | $0 state | Partners personally liable | Does not file if owned entirely by individuals |
| LLC | Form 205 with the SOS | $300 | Protected in most situations | Files yearly (at least a PIR) |
| Corporation | Form 201 with the SOS | $300 | Strongest protection, per the SBA | Files yearly (at least a PIR) |
- Registered agent: LLCs and corporations need one in Texas. Per the Form 205 instructions, it can be an individual Texas resident (you, if you live in Texas) or a registered business entity, but not the LLC itself.
- S corporation: a federal tax election on IRS Form 2553, not a Texas entity type. Ask a CPA before you choose.
Step 3: Register Your Business: Texas Secretary of State vs Harris County DBA
How to start an LLC in Houston (or form a corporation)
- Check the name. It cannot match or be deceptively similar to an existing entity's. Reserving it for 120 days (Form 501) costs $40 and is optional.
- Name a registered agent with a Texas street address.
- File online through SOSDirect: Form 205 (LLC) or Form 201 (corporation), $300, plus a 2.7% convenience fee on card payments.
- Expedite only if needed. Texas Express, requested by mail, email or in person, adds $50 per document (typically two to three business days) or, for filings received by noon, $500 (next business day) or $750 (same day), on top of the filing fee. Otherwise, check the SOS status page before you set a launch date.
- Trading under another name? File Form 503 with the SOS ($25). Since September 1, 2019 (HB 3609), entities no longer also file with the county.
How to file a DBA in Harris County
Sole proprietors and general partnerships using a name other than the owners' names file an assumed name certificate with the clerk of each county where they keep a business premises (or, with no premises, where they do business), per the City's registration guidance. Most Houston businesses file in Harris County, but that page also lists the Fort Bend and Montgomery county clerks for the parts of the city in those counties.
- Search the Clerk's assumed name database.
- Complete the application; mailed applications must be notarized.
- File in person or by mail and pay $24 for a notarized application, plus $0.50 per additional owner ($22 for veterans), per the Clerk's form. By mail, the Harris County Clerk takes only a cashier's check or money order, not a personal check.
A DBA is not name protection
Step 4: Get a Free EIN and Open a Business Bank Account
The IRS says you never pay a fee for an EIN, and approved online applications get one immediately. Form your LLC or corporation first, and apply during the online tool's posted hours. Partnerships, corporations and employers need an EIN; sites that charge for one are selling a free form.
Then open a business bank account. The SBA notes that business banking offers limited personal liability protection by keeping business funds separate from personal funds. For bank and bookkeeping setup, see how to start a business in 30 days.
Do I Need a Business License in Houston, TX?
Not a general one. The Governor's Business Permit Office says Texas does not require a general business license; your SOS certificate of formation or county assumed name certificate fills that role. The City's Office of Business Opportunity lists four main requirements to operate legally in Houston: business name registration (a county DBA, or your SOS filing for an LLC or corporation), a Texas sales and use tax permit if you sell taxable items, an EIN, and a business personal property tax rendition with the appraisal district.
Beyond those, permits depend on what you do:
| Business type | Likely license or permit | Who handles it |
|---|---|---|
| Restaurant or food retail | Plan review, inspection and a food dealer's permit | Houston Health Department |
| Food truck | A state license since July 1, 2026 (HB 2844); City of Houston unit permits stopped being valid after June 30, 2026 | Texas DSHS (City notice) |
| Alcohol sales | A state license or permit, plus a City alcoholic beverage license or permit | TABC and City of Houston ARA |
| Burglar or panic alarm system | City alarm permit | City of Houston ARA |
| Outdoor signs | Sign permit | Houston Permitting Center |
| Cosmetology, electrical, A/C contracting | State occupational license | TDLR |
| Child care | State child care license | Texas HHSC |
This list is not complete. The City's business licensing page covers other regulated businesses, and the Governor's office can help you identify state permits, though it does not issue them.
Where You Operate: Certificate of Occupancy vs a Home-Based Business in Houston
Leasing commercial space
The Houston Permitting Center says a Certificate of Occupancy (CO) is required before a commercial building or lease space is occupied, and again when the occupancy classification changes. General guidance: before you sign, get the space's current CO, confirm it matches your use, ask who pays for plan review and inspections, and ask your attorney whether the lease can depend on getting the CO.
Running a home-based business in Houston
The same Permitting Center page says a CO is not required for single-family homes, duplexes and townhouses under four stories (except live-work units). Houston also has no formal zoning ordinance. Three things to know:
- Deed restrictions. The City tells home businesses to check them, and its deed restrictions page says they may legally prohibit certain types of businesses in a home.
- HB 2464 (2025). This Texas law bars cities from prohibiting a "no-impact" home business or requiring the operator or owner to rezone the property or, in a single-family home or duplex, install fire sprinklers. No-impact means employees and customers stay within the occupancy limit, no on-street parking or substantial extra traffic, nothing visible from the street and no substantial added noise.
- Its limits. Cities can still enforce fire, building, health and noise rules, regulate short-term rentals, and limit or ban home businesses that sell alcohol or illegal drugs, structured sober living homes and sexually oriented businesses. HOA rules and deed restrictions still apply.
Houston Business Taxes to Set Up in Your First Year
| Tax | Who | What to do | When |
|---|---|---|---|
| Sales and use tax | Sellers of taxable goods or services | Apply online; no fee, but security may be required | Before your first taxable sale |
| Franchise tax | LLCs and corporations, not sole proprietorships | Annual report; at or below $2.65 million (2026 and 2027 reports), only a PIR or OIR (Comptroller) | May 15, starting the year after the entity becomes subject |
| Business personal property | Owners of equipment, furniture or inventory | HCAD rendition; at or below $125,000, you can certify that value and usually skip later years | Normally April 15 |
| Federal estimated tax | Sole proprietors, partners, S corporation shareholders | Quarterly payments if you expect to owe $1,000 or more | Quarterly |
Inside Houston city limits, sales tax is 8.25%: 6.25% state, 1% City and 1% METRO, per the City's finance data. Rates differ in some areas, so check the Comptroller's rate tools. The City tells businesses to render in the county they are in, so property in the Fort Bend or Montgomery County part of Houston goes to that county's appraisal district.
Do not skip the PIR
If You Hire in Houston: Employer Registrations
- Register with the Texas Workforce Commission within 10 days of becoming liable for unemployment tax: for most employers, once you pay $1,500 or more in gross wages in a calendar quarter or have an employee in 20 different weeks of a calendar year.
- Complete Form I-9 for every hire.
- Report new hires to the Texas Attorney General within 20 calendar days of when they start earning wages.
- Set up federal payroll withholding (IRS guide).
- Decide on workers' comp, which is optional for most Texas private employers but carries notice duties if you skip it.
Posters and notices are in our HR compliance checklist for small business, policies in Texas employee handbook requirements and first hires in our startup hiring strategy guide.
How Much Does It Cost to Start a Business in Houston?
| Government fee | Amount (checked September 2026) | Source |
|---|---|---|
| Certificate of formation (LLC or corporation) | $300 | Texas SOS |
| Name reservation (optional, 120 days) | $40 | Texas SOS |
| Assumed name for an LLC or corporation | $25 | Texas SOS |
| Harris County DBA (notarized) | $24, plus $0.50 per extra owner; $22 for veterans | Harris County Clerk |
| SOSDirect card convenience fee | 2.7% | SOSDirect |
| Texas Express processing (optional) | $50, $500 or $750 per document, plus the filing fee | Texas SOS |
| EIN | $0 | IRS |
| Sales and use tax permit | $0 (security may be required) | Comptroller |
| Certificate of Occupancy and trade permits | Varies by project | Houston Permitting Center |
Illustrative example
Leased space, food service, licensed trades and alcohol add permit and build-out costs that vary widely, so get quotes before you commit.
Houston Small Business Resources: Free and Low-Cost Help
| Resource | Helps with | Cost |
|---|---|---|
| UH SBDC Houston Center | Advising on planning, financing, marketing and operations | No-cost |
| SCORE Houston | Mentoring, workshops and webinars | Free mentoring; free and low-cost workshops |
| OBO Solutions Center | Permit and license information, business guides, workshops | Free information |
| Houston Permitting Center | Building, occupancy and sign permits (1002 Washington Ave.) | Permit fees vary |
| SBA Houston District Office | Funding programs, counseling, federal contracting certifications and disaster recovery | Varies by program |
| Governor's Business Permit Office | Which state permits and licenses apply to you | Guidance only |
Tech founders can also look at the Ion (Rice University's Midtown innovation hub), Greentown Labs Houston (climatetech) and TMC Innovation (health tech). For capital, Harris County describes an Opportunity Fund with loans of $5,000 to $250,000 for eligible small businesses; check current availability first.
Get Found Online Before You Open
- A Google Business Profile. Google says it is free, and it helps customers find you on Search and Maps. Google's eligibility rules require in-person contact with customers during stated hours. Follow the address rules; see why Google Business Profiles get suspended.
- A simple website with services, service area and contact details. See what pages a small business website should have.
7 Mistakes Houston Founders Make When Starting a Business
- Signing a lease before checking the Certificate of Occupancy. A space without the right occupancy classification needs a new CO before you can open.
- Filing the wrong registration. A county DBA does not create an LLC or its liability protection, and a sole proprietor using a trade name still needs one.
- Paying for an EIN. The IRS issues it free.
- Selling taxable items without a sales tax permit. The permit is free; skipping it is not.
- Ignoring the PIR because no tax is due. Missing it can cost your entity its right to do business.
- Reading "no zoning" as "no rules." Deed restrictions and HOA rules can still block a home business.
- Mixing personal and business money. It muddles your books and undercuts the limited personal liability protection the SBA says separate business banking offers.
For the strategic errors that sink companies after launch, see our list of startup mistakes.
How to Start a Business in Houston: FAQ
Do I need a business license to start a business in Houston?
Not a general one. Texas has no general business license; your SOS certificate of formation or county assumed name certificate fills that role. You may still need a sales tax permit, an EIN, a property tax rendition and activity permits, such as a food dealer's permit, a TABC license or a TDLR license.
How much does it cost to start an LLC in Houston?
The Texas Secretary of State charges $300 for an LLC certificate of formation (checked September 2026), plus a 2.7% fee if you pay by card on SOSDirect. Name reservation ($40) and expedited processing are optional. The EIN and sales tax permit are free; insurance, permits and a website are extra.
Can I run a business from my home in Houston?
Usually, yes. Houston has no formal zoning ordinance, single-family homes need no Certificate of Occupancy, and a 2025 Texas law bars cities from prohibiting no-impact home businesses or making them rezone. Deed restrictions and HOA rules still apply and can prohibit certain home businesses, so read yours first.
Do I file a DBA with Harris County or the Texas Secretary of State?
It depends on your structure. Sole proprietors and general partnerships file with the clerk of each county where they keep a business premises, usually Harris County ($24 for a notarized application). LLCs and corporations file Form 503 with the Texas Secretary of State ($25) and, since 2019, skip the county filing.
Do I need a sales tax permit for my Houston business?
Yes, if you sell or lease taxable goods or sell taxable services in Texas. The Comptroller charges no fee for the permit but may require security. Apply before your first taxable sale. Inside Houston city limits, you collect 8.25%: 6.25% state, 1% City and 1% METRO.
How long does it take to register a business in Houston?
An EIN is issued immediately if your online IRS application is approved. Regular Secretary of State processing times vary, so check the SOS status page; paid Texas Express service can process a formation the same or next business day if the SOS receives it by noon. Permits and Certificates of Occupancy depend on your project.
The Bottom Line
How to start a business in Houston comes down to order: structure, SOS or county registration, EIN, permits and a location check, tax setup, then getting found online and using free local help. The fees are modest; the costly mistakes are skipped steps.
For a second opinion before you spend, a startup advisor can pressure-test the plan. BizTech's startup advisory services include Basic Advisory ($400 one-time) or Launch Plan Advisory ($800 one-time): the first covers idea validation and an action checklist, the second a business plan, feasibility study and go-to-market plan. We are based in Houston (see BizTech in Houston).
Ruhan Rafiq Bhaleshah
Chief Technology Officer
Ruhan Rafiq Bhaleshah leads the technical vision at BizTech, overseeing full-stack development, AI-powered workflows, and ensuring engineering teams collaborate with design and SEO specialists.