Texas Small Business Owner Regulatory Exam Study Guide — 100 Q&A with Verified Answers & Rationales

Texas Small Business Owner Regulatory E
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xam Questions And Correct Answers (Veri
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fied Answers) Plus Rationales 2026|2027
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Q&A | Instant Download Pdfh h h h




1. Which Texas agency primarily oversees small business regulations and
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resources?

A. Texas Department of Labor
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B. Texas Workforce Commission
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C. Texas Economic Development & Tourism Office
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D. Texas Department of Insurance
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The Texas Economic Development & Tourism Office helps small businesses n
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avigate regulations, permitting, and funding.
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2. What is required before operating a business in Texas?
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A. Business insurance h



B. Business registration with the Texas Secretary of State
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C. City council approval
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D. Texas Workforce Commission approval
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All businesses must register with the Texas Secretary of State or the county cl
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erk, depending on the business type.
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3. Which of the following is a correct requirement for operating a sole p
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roprietorship in Texas? h h

,A. Forming a corporation h h



B. Applying for a federal charter h h h h



C. Filing an Assumed Name Certificate with the county clerk
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D. Registering with the Texas Railroad Commission h h h h h



Sole proprietors in Texas must file a Doing Business As (DBA) with the county
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clerk if operating under a name other than their own.
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4. What is the primary tax collected by the state of Texas on most b
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usiness transactions? h




A. Excise tax h



B. Income tax h



C. Sales and Use Tax h h h



D. Property tax h



Texas does not have a state income tax; instead, it relies heavily on sales and
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use taxes.
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5. A Texas small business must collect sales tax if:
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A. They sell only to wholesalers
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B. They sell tangible personal property to consumers
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C. They operate as a nonprofit
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D. They only sell digital products
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Businesses that sell tangible personal property or taxable services must colle
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ct and remit sales tax.
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6. Which number is required for hiring employees in Texas?
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A. Federal Employer Identification Number (EIN)
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B. State business license number
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C. OSHA permit number h h



D. NAICS business classification codeh h h



An EIN is needed for payroll and IRS reporting when hiring employees.
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, 7. Who administers the Texas Franchise Tax?
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A. Texas Department of Licensing and Regulation
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B. Texas Comptroller of Public Accounts
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C. Texas Workforce Commission
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D. IRS
The Texas Comptroller oversees the franchise tax, which most entities must p
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ay annually.
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8. What is the deadline for filing the Texas Franchise Tax?
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A. May 15 h



B. December 31 h



C. April 15 h



D. January 1 h



Franchise Tax Reports are due on May 15 each year.
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9. What is a Certificate of Formation used for in Texas?
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A. To legally create a corporation or LLC
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B. To trademark a business name
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C. To register for unemployment insurance
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D. To apply for a state loan
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The Certificate of Formation is filed with the Secretary of State to form an LLC
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or corporation.
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10. If a business sells food or beverages in Texas, which permit is r
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equired?

A. City food handler certificate
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B. Texas Sales and Use Tax Permit
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C. State franchise permit
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D. Texas Water Commission permit
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