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What legal steps do I need to take to start a small business in Texas?

Picture of Chris Battis By   ·  1 minute read

To start a small business in the state of Texas, there are several legal steps that you should take:

  1. Decide on a business structure: You must choose a legal structure for your business, whether a sole proprietorship, partnership, LLC or corporation. Each has its own benefits and drawbacks, so you must decide which one best suits your business needs.
  2. Choose and register a business name: After choosing the legal structure, you must decide on a business name that is distinctive from other registered entities. Register the name with the Secretary of State's office to reserve it.
  3. Obtain an EIN: The next step is to obtain an EIN (Employer Identification Number) from the IRS. This is necessary if you plan to hire employees, file taxes, or open a business bank account.
  4. Register for state taxes: Depending on the type of business you plan to start and the nature of the goods or services you will offer, it's important to register your business with the Texas Comptroller's office to obtain sales and use tax permits.
  5. Obtain necessary licenses and permits: Some business types require special licenses and permits before operation such as food service, alcohol sales, home based businesses, professional services and more. You must obtain the correct licenses and permits for your business from the appropriate government agency.
  6. Obtain necessary insurance: Depending on your business structure, industry requirements, and personal risk tolerance, your business may need insurance such as liability, workers' compensation, property and more.
  7. Familiarize yourself with local laws: Municipalities may impose additional zoning restrictions, permit requirements or registration fees. Check with local government agencies for compliance with local laws and regulations.

By following these legal steps, you can put your small business on a legal and regulatory footing that ensures smooth operation and compliance with state and local laws.

Note that laws and regulations change from time to time, it is important that you check with the relevant agencies for the most recent information. Additionally, it may be in your best interest to consult with a Texas licensed attorney who can provide you personalized guidance to help with your specific situation.