FAQs about Starting a Texas Sole Proprietorship

What qualifies as a sole proprietorship in Texas?
In Texas, sole proprietorships are businesses run by a single individual.
Do you need a business plan to start a sole proprietorship in Texas?
Not necessarily. Lots of people simply start operating their business and by default it becomes a sole proprietorship.
How much does it cost to start a sole proprietorship in Texas?
A sole proprietorship is inexpensive if you don’t have to pay to rent office space. Filing paperwork to officially launch your sole proprietorship in Texas is around $25.
Can sole proprietors in Texas hire employees?
If your sole proprietorship hires employees, you need to register for an employer identification number (EIN) with the IRS. Additionally, you will need to report their names to the Texas Child Support Division within 20 days of hiring or be subject to a $25 fine.
Is a DBA required for Texas sole proprietorships?
If you plan to use a trade name for your sole proprietorship, you'll have to file a DBA (doing business as) assumed name certificate with the county clerk's office where business is conducted.
Are there any alternatives to starting a sole proprietorship in Texas?
Opening a limited liability company (LLC) or corporation can be helpful when it comes to liability and establishing credibility. This means your liability is limited to the amount of your investment in the LLC or corporation, and if you’re sued and lose, nobody can come after your house.

Final Word

Sole proprietorship in Texas is easy to get started with, all you have to do is begin business activities. Now that you know what it takes to formally launch your sole proprietorship in Texas, take a moment to consider if you should take additional steps to further support your business's needs. Whether that means choosing a business name or getting liability insurance, you’re the captain of the ship and ultimately know what’s best to grow your enterprise.


About the Authors

Amalia Santa Maria

Written by: Amalia Santa Maria

Personal Finance Content Writer and Editor

Copywriter and content creator writing technical articles on finance that allow an average person to easily understand and connect with financial concepts.

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