WITH EMPLOYEES
12,354
U.S. CENSUS CBP 2023
GUIDES · TEXAS · CONSTRUCTION
Start a construction company in Texas
UPDATED JUL 2026 · DATA RETRIEVED JUL 2026
THE SHORT ANSWER
To start a construction company in Texas you'll file a Certificate of Formation with the Texas Secretary of State ($300) and get a free EIN from the IRS. Texas issues no state general contractor license, so the permission to build is municipal: Austin takes a one-time contractor registration before it will issue a building permit, while Houston issues permits to general contractors without one. Electrical, plumbing, and HVAC work stays state-licensed under TDLR and the Texas State Board of Plumbing Examiners. Total state filing: ~$300 and 5–10 business days.
Source: Texas SOS · Austin Development Services · Houston Permitting Center · TDLR — verified Jul 2026
RETRIEVED JUL 27 2026
U.S. CENSUS BUREAU · CBP + NES
U.S. CENSUS BUREAU · CBP + NES
CONSTRUCTION — TEXAS ESTABLISHMENTS · NAICS 2361 · 2023
TX
STATE OF TEXAS
CONSTRUCTION
CONSTRUCTION
SOLO OPERATORS
SOLO
94,464
NONEMPLOYER 2023 · 88.4% OF TOTAL
STATE FILING FEE
$300
CERTIFICATE OF FORMATION · FORM 205
PROCESSING TIME
PROCESSING
5–10
BUSINESS DAYS
SOURCE: U.S. CENSUS BUREAU, CBP 2023 + NONEMPLOYER STATISTICS 2023 — RETRIEVED JUL 2026 CENSUS.GOV/CBP /METHODOLOGY/
MARKET SIGNAL
574,866 new business applications in Texas (last 12 mo) ▲ 17% YoY
Source: U.S. Census Bureau, Business Formation Statistics — retrieved Jul 2026 Embed this chart
Texas hands the licensing question to city hall. There is no state general contractor license to apply for, and Austin’s Development Services states it plainly, that anyone can be a general contractor and a state license is not required. That reads as an open state until the first permit application, because the rule deciding when work can start is written by whichever city the job sits in. Austin registers a general contractor once, with no annual update. Houston asks a general contractor for no license and registers the electrical, plumbing, and mechanical contractors working under one. Both cities still issue the permits and run the inspections.
Two obligations sit behind that. The trades stay state-licensed wherever the job is, so a general contractor’s subcontractor list is where the licenses actually live. And workers’ compensation, which Texas leaves optional for private employers, becomes a written contract condition the moment the customer is a governmental entity.
The formation data matches the light-touch picture. Texas holds more one-person residential construction firms than any other state, 94,464 against 12,354 establishments with payroll, a ratio near 7.6 to 1 where California sits closer to 3.4 to 1.
File your Texas LLC in 7 steps
1
STEP 1 OF 7
Choose and search your business name
Pick a name that includes "LLC" or "L.L.C." and isn't already taken. Check existing Texas entities free through the Comptroller's taxable entity search: enter your candidate in the "Entity Name" field and review what is already registered. The Secretary of State makes the final availability call at filing (its own SOSDirect search charges a $1.00 statutory fee per search), so a close match here is your signal to pick something more distinct.
mycpa.cpa.state.tx.us — Taxable Entity Search
Texas Comptroller — Franchise Tax Account Status Search, entity name lookup (UI as of Jul 2026)
2
STEP 2 OF 7
Appoint a registered agent
Texas requires a registered agent with a physical street address in the state who is available during business hours. You can serve as your own agent, which puts your address on the public record. A commercial agent lists theirs instead and files the consent form for you.
3
STEP 3 OF 7
File the Certificate of Formation (Form 205)
Texas e-filing runs through SOSDirect, and the whole filing side sits behind a login: from the landing page you enter the site, create a session, choose "Domestic Limited Liability Company (Form 205)," enter your business name exactly as you researched it, and pay the $300 state fee by card. Most filings are approved in 5–10 business days.
sos.state.tx.us — SOSDirect landing
Texas SOSDirect — landing; filing continues behind a login, searches carry a $1.00 statutory fee (UI as of Jul 2026)
4
STEP 4 OF 7
Get a free EIN from the IRS
Once the LLC is approved, apply for an Employer Identification Number on the IRS website. It is free, takes about ten minutes online, and you need it to open a bank account, hire, and file taxes. Ignore any site that charges for an EIN.
irs.gov — EIN Assistant
IRS — "Get an employer identification number," EIN Assistant entry (UI as of Jul 2026)
5
STEP 5 OF 7
Create an operating agreement
Texas doesn't require an operating agreement, but banks and partners often ask for one, and it settles ownership questions before they become disputes. A single-member LLC can use a short standard agreement; multi-member LLCs should spell out splits and exits.
6
STEP 6 OF 7
Check licenses and local permits
Texas has no general statewide business license. Check your city and county for local permits before you take your first job. For construction specifically: Texas issues no state general contractor license, and Austin's Development Services says so directly, that anyone can be a general contractor and a state license is not required. The registration that does apply is municipal and differs by city. Austin registers a general contractor once, before it will issue a building or trade permit, and asks for no annual update. Houston requires no license from a general contractor and instead has the electrical, plumbing, and mechanical contractors register their state licenses with the city. Those trades stay state-licensed everywhere in Texas: TDLR licenses electricians and air conditioning and refrigeration contractors, and the Texas State Board of Plumbing Examiners licenses plumbers through a Responsible Master Plumber.
7
STEP 7 OF 7
Set up franchise tax and a business bank account
Texas LLCs file an annual franchise tax report; most small businesses owe $0 under the no-tax-due threshold but must still file. Open a separate business bank account with your approved certificate and EIN to keep liability protection intact.
File it yourself, or have it done
Same state fee either way. The difference is your time, and whose address goes on the public record.
DIY
WITH NORTHWEST
State fee
$300
$300
Service fee
$0
$39
Your time
~4 hrs
~10 min
Registered agent (1 yr)
you, publicly listed
included, private
Start your Texas LLC →
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Common questions
Do I need a contractor license to build in Texas?
Not from the state. Texas issues no general contractor license, and Austin's Development Services states that a state license is not required to be a general contractor. What applies is municipal and differs by city: Austin takes a one-time contractor registration before it issues a building or trade permit, while Houston issues permits to general contractors without one and registers the trade contractors instead. Electrical, plumbing, and HVAC work is separate and stays state-licensed wherever the job sits.
Does a Texas construction LLC need workers' compensation insurance?
Private employers in Texas may choose to go without it, which makes the state unusual, and that choice ends at public work. Under Texas Labor Code §406.096, a governmental entity entering a building or construction contract must require the contractor to certify in writing that it provides coverage for each employee on the project. Each subcontractor gives the same certificate to the general contractor, who passes it to the governmental entity.
Can I be my own registered agent in Texas?
Yes. Any Texas resident over 18 with a physical street address in the state can serve, including yourself. The trade-off is privacy: the agent's name and address go on the public record, and you must be available at that address during business hours to receive legal documents.
What does the $300 Texas filing fee cover?
The $300 is the state's one-time fee for filing the Certificate of Formation (Form 205), which creates the LLC itself. It does not include a registered agent service, an EIN (free from the IRS), or the annual franchise tax report you file to stay in good standing.
Source: BusinessFormation.us analysis of U.S. Census Bureau County Business Patterns 2023 and Nonemployer Statistics 2023 (establishment counts, NAICS 2361), and Business Formation Statistics (monthly applications); retrieved Jul 2026. businessformation.us/start/construction-company/texas/