Note: New business owners should always seek the guidance of a professional tax consultant, accountant, and/or attorney to verify all legal requirements are met before operating a business.

Step 1: BizAid Business Orientation

A great first step for you is to attend our BizAid Business Orientation online. This free class serves as an introduction to resources available to small business owners as well as the various government agencies or organizations that you may need to reach out to along the way. It will get you introduced to the components of a business plan and various aspects of business development. This class would be beneficial as you begin to outline your business goals, whether you’re starting a new business or looking to expand.

Coaching Services

• One-on-one, No-cost, and Confidential
• Business Plan Review & Development Assistance
• Marketing Plan Review & Development Assistance
• Financial Readiness Assessment
• Business Management Technical Assistance

Who Qualifies?

• For-profit business located within the Austin city limits
• Non-profit or located outside Austin city limits, limited to 6 hours

Step 2: Determining Your Business Structure

Legal Structure

Choosing the correct legal structure is an important step, as financial, tax, and legal responsibilities vary by structure. Once selected, your business name and structure must be properly registered with the appropriate state and/or county agency.

In Texas, there are several legal options for structuring a business. Because of the legal and tax implications involved, new business owners are strongly encouraged to consult with a qualified accountant, tax professional, or attorney before making a final decision. The Lawyer Referral Service of Central Texas can help connect entrepreneurs with legal professionals.

Legal Business Structures in Texas

Sole Proprietorship

• A business owned and operated by one individual, with no legal separation between the owner and the business. The owner is personally responsible for all debts and obligations. In Texas, sole proprietors may need to file an Assumed Name (DBA) with the county if operating under a business name.

General Partnership

• A business owned by two or more people who share management responsibilities, profits, and liabilities. Each partner is personally responsible for the debts and legal obligations of the business. General partnerships in Texas may be required to file an Assumed Name (DBA).

Limited Partnership (LP)

• A partnership with at least one general partner who manages the business and assumes personal liability, and one or more limited partners whose liability is limited to their investment. Limited partnerships must file formation documents with the Texas Secretary of State.

Registered Limited Liability Partnership (LLP)

• A general partnership that has registered with the State of Texas to provide liability protection for partners against certain business debts and claims. Partners typically remain liable for their own actions but not for those of other partners.

Limited Liability Company (LLC)

• A business structure that combines liability protection for owners (called members) with flexible management and tax options. LLCs help protect personal assets from business debts and must be registered with the Texas Secretary of State.

Corporation

• A legal entity separate from its owners (shareholders) that provides strong liability protection. Corporations have more formal compliance requirements, such as bylaws and ongoing filings, and must be registered with the Texas Secretary of State. They may be taxed as C corporations or S corporations, depending on eligibility and election.

Filing the Required Paperwork

After selecting a legal structure and consulting with a professional, use the guidance below to determine where and how to file your paperwork.

Sole Proprietorship

Assumed Name (Doing Business As – DBA)

Sole proprietors operating under a name other than their legal name must file an Assumed Name (DBA).

• Where to file: Travis County Clerk
• Form name: Assumed Name Records Certificate of Ownership for an Unincorporated Business or Profession
• Validity: 10 years, unless changes are made

Filing a DBA helps ensure the business name you plan to use is not already registered in Travis County.

Fees and procedures may change. Please confirm current requirements directly with the Travis County Clerk’s Office.

Partnerships, Limited Liability Companies, and Corporations

All partnerships, LLCs, and corporations in Texas must be registered with the state.

• Where to file: Texas Secretary of State
• Common filing forms include:
• LLC: Certificate of Formation – Limited Liability Company (Form 205)
• Corporation: Certificate of Formation – For-Profit Corporation (Form 201)
• Limited Partnership (LP): Certificate of Formation – Limited Partnership (Form 207)
• Registered LLP: Application for Registration of a Limited Liability Partnership (Form 701)

Step 3: Federal, State, Austin and Employment Tax Responsibilities

Federal Taxes

The Internal Revenue Service (IRS) administers federal business taxes, including income taxes, self-employment taxes, and employment taxes. Most businesses are required to make estimated quarterly tax payments if taxes are not withheld throughout the year.

The IRS also provides extensive educational resources to help small business owners understand filing requirements, deadlines, and payment options. The local IRS Taxpayer Assistance Center offers face-to-face assistance by appointment.

State Taxes

The Texas Comptroller of Public Accounts is responsible for administering and collecting Texas sales and use tax and the Texas franchise tax.

Depending on the type of products or services you offer, your business may be required to:

• Register for a Texas Sales and Use Tax Permit
• Collect and remit sales tax
• File franchise tax reports annually

The Comptroller’s website provides guidance on what taxes apply, when to file, and how often payments are due.

Local (Austin) Property Taxes

Businesses that own tangible personal property used to produce income—such as equipment, furniture, or inventory—may be required to annually assess and report that property and pay local property taxes.

In Austin, property tax administration is handled by the Travis County Appraisal District (TCAD). TCAD oversees:

• Business personal property renditions
• Property valuations
• Exemptions and filing deadlines

Business owners should be aware that property must typically be reported each year, even if its value has not changed.

Employment Taxes

Businesses with employees have additional tax responsibilities at both the federal and state levels.

• Internal Revenue Service – Provides guidance on federal employment taxes, including income tax withholding, Social Security, Medicare, and federal unemployment tax.
• Texas Workforce Commission (TWC) – Administers Texas unemployment insurance taxes and employer reporting requirements.

Additional Guidance

Understanding and managing business taxes can be complex. Entrepreneurs are encouraged to use available guides, workshops, and videos that explain:

• Common tax obligations for Austin businesses
• Quarterly payment expectations
• Business property reporting requirements
• Key deadlines throughout the year

If additional educational materials or step-by-step resources are available, they should be reviewed carefully and referenced regularly to help ensure compliance.

What Taxes Apply to My Business?

Step 4: Business Licenses and Permits by Business Type

City of Austin Small Business Permitting & License Resources
This is the primary City of Austin page with links to common permits you may need (sign permits, mobile retail, alcoholic beverage certifications, etc.). It also provides contact info for departments that issue permits depending on your business type.

Austin Small Business Permitting Overview
High-level summary of some common permits needed by small businesses, including where to find more information.

Travis County Development Services – Permitting Center
This Travis County Development Services page lets you explore development-related permits (particularly outside Austin city limits in unincorporated areas), including commercial site plans, driveway permits, and other approvals.

Texas Business Licenses & Permits                                                                                                                                                                   A comprehensive permit guide offers a listing of state permits that may be required for persons desiring to operate a business enterprise in the state.

According to Start a Business in Texas, the State of Texas does not require a general "business" license; however, there are a number of regulatory agencies that have licensing and permitting requirements based on the type of service, or products associated with your business. To ensure that all permitting requirements are met, you should contact the local county and/or city government in which you plan to conduct business to determine if there are any additional requirements. To determine state occupational licensing and permitting requirements, please visit the Texas Department of Licensing and Regulation (TDLR), specifically the TDLR Apply for a License tab, for more information.

Development Process Team
The Development Process Team offers free support for homeowners and small business owners by:

• Providing information about the development process.
• Offering a single point of contact for the duration of your project.
• Connecting you with the right resources every step of the way.

The Development Process Team assists homeowners, small business owners, and renters with high-level process questions with proposed improvements to their homes or business. Schedule an appointment with the link above. 

Step 5: Business Employer Requirements

Start a Business in Texas section on employer requirements is a one stop shop for small business owners. The information provided will help entrepreneurs understand and comply with federal and state employer requirements. There are a number of labor, safety, and reporting laws relating to employment of personnel, thus it is vitally important for small business owners to increase their knowledge and ensure they are in compliance. Additionally, the Texas Workforce Commission publishes a great resource for employers. The Especially for Texas Employers is a step by step guide that walks employers and employees thru every aspect of Texas employment law.

Small Businesses Health Insurance
TexHealth is a community-based nonprofit created by and for Central Texas businesses offering a low-cost health benefits program in Travis, Burnet, Hays, and Williamson counties. Visit texhealthct.org

Workers Compensation
Workers’ compensation is a state-regulated insurance system that provides covered employees with income and medical benefits if they are injured on the job or have a work-related injury or illness.  Except in cases of gross negligence, workers’ compensation insurance limits an employer’s liability if an employee brings suit against the employer for damages. In Texas private employers can choose whether or not to carry workers’ compensation insurance coverage. Visit Texas Department of Insurance

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Small Business Resources

Search and locate helpful resources in this comprehensive directory of non-profit agencies, local, state, and federal governments.

Certifications:

• Business Skills Certificate - After completing six (6) Business Skills Certificate Program classes/workshops on topics like AI, funding, and marketing, email smallbiz@austintexas.gov to receive your Business Skills Certificate at our next scheduled recognition reception.
• NonProfit Skills Certificate - After completing six (6) Nonprofit Skills Certificate Program classes on topics like Nonprofit bookkeeping and fundraising strategies, email smallbiz@austintexas.gov to receive your Nonprofit Skills Certificate at our next scheduled recognition reception.
• Cooperative Skills Certificate - Join Cooperative Experts from across Texas to learn how to start and grow a successful Cooperative Business in Austin! Participants who complete at least five (5) Classes will receive a Co-op Business Certificate.
• Small Business Certifications (MBE/WBE/HUB) - The City’s Minority-Owned Business Enterprises (MBE) and Women-Owned Business Enterprise (WBE) program is intended to promote and encourage MBEs and WBEs to participate in business opportunities with the City of Austin; to afford MBEs and WBEs an equal opportunity to compete for work on City contracts; and to encourage contractors to provide subcontracting opportunities to certified MBEs and WBEs by soliciting such firms for subcontracting opportunities.
• State of Texas Historically Underutilized Business (HUB) - Contingent on MBE and/or WBE certification approval, you may also be eligible for State of Texas Historically Underutilized Business (HUB) certification if proof of citizenship or naturalization and a Federal Tax Identification number are provided. Please note: HUB certificate is issued directly by the State of Texas HUB-Link.