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What are the steps involved in starting a small business in Texas?

Picture of Chris Battis By   ·  1 minute read

As a licensed attorney practicing in Texas, I am happy to provide advice on the steps involved in starting a small business in Texas.

  1. Choose a Business Entity: The first step is to choose a legal structure for your business, such as sole proprietorship, partnership, limited liability company, or corporation. Each of these entities has different tax, legal, and liability implications, so it is important to consult with an attorney or accountant to determine which structure is best for your business.
  2. Pick a Name: Next, you will need to choose a name for your business and check if the name is available with the Texas Secretary of State. You can also register your business name as a trademark with the U.S. Patent and Trademark Office.
  3. Register with the Secretary of State: Once you have chosen a name, you will need to register your business with the Texas Secretary of State's office. This process varies based on the legal entity you chose in step one. For example, LLCs need to file a Certificate of Formation while corporations need to file Articles of Incorporation.
  4. Obtain a Tax ID Number: Businesses in Texas need to obtain a Tax Identification Number (TIN) from the Internal Revenue Service (IRS). The TIN is used to file taxes and open a bank account.
  5. Obtain Permits and Licenses: Depending on your type of business and location, you may need to obtain permits and licenses from the local and state authorities to operate legally.
  6. Apply for Business Insurance: Business insurance is important to protect your business from unexpected events such as accidents, natural disasters, or lawsuits.
  7. Register for Franchise Tax: Most businesses in Texas need to pay a franchise tax. You will need to register with the Texas Comptroller of Public Accounts and file annual reports.
  8. Hire Employees: If you plan to hire employees, you will need to register with the Texas Workforce Commission and comply with state and federal employment laws.

These are the general steps involved in starting a small business in Texas. However, each business is unique, and you may need to take additional steps or seek legal counsel to ensure compliance with all applicable laws and regulations.