How to Register a Business in Texas — LLC, DBA & What's Right for You

Before you take your first customer, sign your first lease, or open a business bank account, you need to make a foundational decision: what business structure are you going to operate under? For Southeast Texas entrepreneurs, the choice most often comes down to three options — operating as a sole proprietor (the simplest, requiring minimal formal setup), filing a DBA (Doing Business As) to operate under a trade name while remaining a sole proprietor, or forming an LLC (Limited Liability Company) for liability protection and a more formal business structure. There are also S corporations and C corporations, which are less common for small businesses but have specific advantages in certain situations. This guide walks through the options, the real costs, and the practical considerations for SETX business owners making this decision for the first time.

Sole Proprietor — The Default, Not Always the Best

If you start doing business without filing any formal entity, you are a sole proprietor by default. There's no paperwork or filing fee — you simply start operating, get an EIN if you have employees, and file a Schedule C on your personal income taxes. The problem: a sole proprietor has no liability protection. Your personal assets — home, car, bank accounts — are exposed to business debts and lawsuits. For low-risk, simple businesses, this may be acceptable in the very early stages. For anyone who has clients at their home, operates vehicles in the course of business, employs others, or has any exposure to property damage or injury claims, operating as a sole proprietor without insurance and entity protection is a significant risk.

DBA (Doing Business As) — Operating Under a Trade Name

A DBA, or Assumed Name, allows you to operate your business under a name different from your personal legal name. In Texas, if you're a sole proprietor operating under a name other than your own (e.g., "Beaumont Lawn Care" instead of "John Smith"), you must file an Assumed Name Certificate with the county clerk in each county where you have a place of business. The fee in Jefferson County is approximately $25. An LLC can also file a DBA to operate under a name different from its registered LLC name. A DBA is not a separate legal entity and does not provide liability protection on its own — it only addresses the business name, not the liability structure.

LLC — The Sweet Spot for Most SETX Small Businesses

A Limited Liability Company (LLC) is the most common choice for SETX small businesses, and for good reason. It separates your personal assets from the business, is relatively inexpensive to form ($300 filing fee with the Texas Secretary of State), has flexible taxation (taxed as a sole proprietorship/partnership by default, or you can elect S-corp taxation), and requires minimal ongoing compliance compared to a corporation. Form your LLC by filing a Certificate of Formation online through the Texas Secretary of State's SOSDirect portal. Choose a unique name that includes "LLC" or "Limited Liability Company." Designate a registered agent (the entity that receives legal service of process — can be yourself, an individual in Texas, or a registered agent service for $50–$150/year). You do not need an operating agreement in Texas, but having one is strongly recommended.

When to Consider an S Corporation or C Corporation

S corporation status is not a state filing — it's a federal tax election. An LLC or corporation can elect S-corp status with the IRS (Form 2553), which allows the business to pay owners a salary and distribute remaining profits without the self-employment tax that applies to sole proprietors and default LLC taxation. For SETX business owners generating $60,000+ in net profit, S-corp election can produce meaningful annual tax savings — but it comes with payroll compliance requirements and additional administrative overhead. Consult a CPA before making this election. C corporations are the right structure for businesses seeking venture capital investment or planning to go public — for most SETX small businesses, they are unnecessary complexity and create double taxation issues.

Steps After Business Formation

Once your entity is formed: (1) Obtain an EIN from the IRS (free, online). (2) Open a business bank account — never mix personal and business finances. (3) Register for a Texas Sales and Use Tax Permit if applicable. (4) Register with the Texas Workforce Commission if you have employees. (5) Get a Certificate of Occupancy from your city if operating from a commercial location. (6) Obtain any industry-specific licenses through TDLR, state boards, or local health departments. (7) Get business insurance — general liability at minimum. (8) List your business in the Southeast Texas Business Directory and claim your listing if it already exists. These eight steps, completed in order, create the proper foundation for a legally compliant, professionally operated business.