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What are the legal requirements for starting a business in Texas?

Picture of Chris Battis By   ·  1 minute read

As a lawyer, I can provide legal advice on the requirements for starting a business in Texas. To form a legal business entity in Texas, you must complete these mandatory steps:

  1. Choose a Business Entity Type: Texas permits the formation of several business structures, including sole proprietorship, partnership, Limited Liability Company (LLC), Corporation, and others. The type of entity you select will decide how your business is taxed, and what legal liability protection you receive.
  2. Business Name: You must choose an appropriate name for your business entity that complies with the rules and regulations of the Texas Secretary of State (SOS) and has to be registered with the SOS.
  3. Registered Agent: All Texas business entities must have a registered agent, which is a person or entity that accepts legal documents and state mail on behalf of the business.
  4. File Formation Documents: To form a business entity in Texas, you have to file the formation documents (Articles of Incorporation for corporations, Certificates of Formation for LLCs, or Partnership Agreements for partnerships) with the Texas SOS.
  5. Obtain Required Permits and Licenses: Some businesses in Texas require specific licenses, permits, and regulatory approvals from state agencies or local governments, depending on the type of business.
  6. Register for State Taxes: All businesses operating in Texas that generate income or employ workers are required to register with the Texas Comptroller's office and collect and remit applicable state taxes.
  7. Obtain Employer Identification Number: An Employer Identification Number (EIN) is required to open a business bank account, and for federal tax filings, so it is vital to get it during the formation process.

Additionally, based on the structure of your business, there might be additional state-specific requirements, such as filing an assumed name certificate or obtaining a state franchise tax permit.

In conclusion, while the process of starting a business may seem straightforward, it can be challenging due to numerous legal compliance requirements. It is advisable to seek the advice of a lawyer before beginning the process to ensure that you meet all the legal requirements necessary for a start-up.