Starting a Business in Texas: The Steps Before You Lease Space
The name, entity and tax steps to settle before you sign a lease.
Why this matters before you lease
A landlord will ask who is signing the lease. Your business name, your entity and your tax accounts decide the answer.
Sign as yourself, and the lease is your personal responsibility. Sign as a new company, and the landlord may ask for a personal guarantee anyway. Either way, you want that conversation to happen on purpose, not by surprise.
I'm Omega Mejia, a real estate agent in Frisco. I help fitness, medical and health businesses find, lease and buy commercial space. I'm not a lawyer or a CPA. This page lays out the order of the steps so you ask the right people the right questions. See my commercial page.
Step 1: Find and check a business name
Start with a name you can use. The Texas Secretary of State says a company name must be distinguishable in its records from the names already on file. The office also warns that a preliminary answer is not final until it receives and processes your filing.
That means you should not print signs or sign a lease on a name that has only had a preliminary check. The Secretary of State offers a name reservation through its online portal, and a reservation runs for 120 days.
If you will operate under a name different from your own legal name or your company's filed name, you need an assumed name certificate, often called a DBA. A sole proprietor files it with the county clerk. An LLC files it with the Secretary of State on Form 503, and the Secretary of State lists a $25 fee per certificate. Recent updates found at sos.state.tx.us/corp/namefilingsfaqs.shtml.
Step 2: Form the entity (most owners choose an LLC)
A Texas LLC is created when you file a certificate of formation with the Secretary of State. The Secretary of State states that the filing fee for an LLC certificate of formation is $300. Recent updates found at sos.state.tx.us/corp/instructions/205.shtml.
Here is what the filing needs:
- A registered agent. This is a Texas resident or a business entity registered in Texas who receives legal papers for the company. The LLC cannot act as its own agent. The registered office must be a street address where papers can be handed over in person. A mailbox service alone does not qualify.
- A management structure. The certificate must state it, and the Secretary of State cannot advise you on which to choose.
You can file online through the Secretary of State's portal, by mail or in person in Austin. The online route is the one the office recommends for faster processing.
If you plan to practice a licensed profession, such as medicine, the standard LLC form may not fit. The Secretary of State says Form 205 cannot be used for a licensed activity when the license cannot be issued to an LLC, and points professional service companies to Form 206. Ask your attorney which applies to you.
The Secretary of State also suggests choosing a structure in consultation with an attorney and an accountant. The SBA gives a plain overview of the options at sba.gov.
Step 3: Tax IDs and state accounts
Federal EIN. An Employer Identification Number identifies your business to the IRS. The IRS says you never have to pay a fee for an EIN, and it warns about websites that charge for one. Apply only at irs.gov. The Secretary of State does not issue EINs.
Texas franchise tax. The Comptroller describes franchise tax as a privilege tax on each taxable entity formed or doing business in Texas, and says the annual report is due May 15. The Comptroller also sets a no tax due threshold that changes by report year. Recent updates found at comptroller.texas.gov/taxes/franchise. Your CPA can tell you what applies to your company.
Sales and use tax permit. The Comptroller says you apply for this permit if you are in business in Texas and sell or lease tangible personal property or sell taxable services. Whether your offer counts depends on what you sell, so confirm it with the Comptroller. The agency says to allow two to three weeks for the permit. Details are at comptroller.texas.gov/taxes/permit.
If you will hire employees, the Texas Workforce Commission runs the state unemployment tax program. Start at twc.texas.gov.
Step 4: Licenses and permits to ask about
The SBA says the licenses and permits you need from the state, county or city depend on your business activities and your location. Federal, state and local rules can all apply.
- City and county. Ask the city where you plan to lease what it requires of your type of business, and whether the space needs approval for your use. Do this before you sign.
- State licensing boards. Medical, dental, therapy, chiropractic and other health professions answer to state boards. Go to the board for your profession and read its requirements directly. I do not summarize them, because they change and they are not mine to interpret.
- Fitness and wellness. Ask your attorney and insurance agent whether any state or local rules cover your services.
The SBA lists where to look at sba.gov.
Write a simple business plan
A plan helps you see the space you need before you tour it. A short one covers:
- What you offer
- Who your customers are
- What your location must have
- Your startup costs
- Your monthly costs
- Your timeline, from opening the entity to opening the doors
The SBA describes a traditional plan and a short lean startup plan, and explains both in its business plan guide. For free or low-cost help, the SBA lists its resource partners, including SCORE mentors and Small Business Development Centers, at sba.gov/local-assistance/resource-partners. The SBA says SCORE mentoring is offered at no cost.
Costs to plan for
Most new owners remember rent and forget the rest. Put each of these on your list:
- Entity filing fee (the Secretary of State lists $300 for an LLC)
- Assumed name certificate, if you use one
- A registered agent, if you hire one
- Professional and business licenses
- Insurance
- Security deposit and any other lease deposits
- Buildout and construction
- Equipment
- Rent and utilities
- Signage
- Marketing
I list dollar figures here only where a government agency publishes them. Everything else varies by space, by trade and by contractor. Your attorney and CPA can help you build the real numbers.
How I help with the space
Once the pieces above are moving, I help you find the right space to lease or buy, and I help owners sell or lease commercial property they already hold. I look at the layout, the use, the location and the lease terms with you before you commit.
Use the Get More Information buttons on my commercial page to tell me what you are planning. You can also contact me here, or read about my brokerage on the OnDemand Realty page.
Start with the name, then the space
Settle the name and the entity first. Then you can sign a lease with confidence about who is signing it.
This page is general information, not legal, tax or accounting advice. Talk with an attorney and a CPA about your own situation. Agency details were read from the agencies' own websites in October 2026 and may change.
Frequently Asked Questions
Do I need to form an LLC before I lease commercial space in Texas?
Not always, but decide before you sign. The name on the lease decides who is responsible for it. Talk with an attorney and a CPA about the right structure for you.
How much does it cost to file an LLC in Texas?
The Texas Secretary of State states that the filing fee for an LLC certificate of formation is $300. Recent updates found at sos.state.tx.us/corp/instructions/205.shtml.
Do I have to pay for an EIN?
No. The IRS says you never have to pay a fee for an EIN, and it warns about websites that charge for one. Apply only at irs.gov.
Do I need a sales and use tax permit?
It depends on what you sell. The Texas Comptroller says to apply if you sell or lease tangible personal property or sell taxable services in Texas. Confirm your situation with the Comptroller.
Where do I find licenses for a medical or health business?
Start with the state licensing board for your profession and your city. I point you there rather than summarizing the rules, because they change.
Hi, I'm Omega Mejia.
I help people across Collin County make their next move with confidence. Got a question, or a house you're curious about? I'd love to hear about it.
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