How to Start a Small Business in Texas
Do you want to know how to start a small business in Texas? Texas small business formation laws and regulations are not difficult to understand. Much of it is similar to what you find in other states. However, here is a step-by-step guide on how to start a small business in Texas.
Pick a Business Structure
The first thing you want to do is pick the business structure, e.g., LLC, Corporation, DBA, etc. While there are no income taxes in Texas, some forms of businesses treat your personal and business assets separately while others don’t. Think carefully and then pick the business structure.
Register Your Business Name
Sit with the people who are partnering with you for starting the business and discuss a suitable name. While choosing a business name, you should keep it simple to pronounce. You also want your name to be easy as a website name. Do your research to make sure your name does not match with an existing business’ name. Once you have decided the name, get this name registered with the Texas Secretary of State. Sometimes, you can use online resources too to complete the filing process for you. Make sure you have the necessary paperwork to register your business with the secretary of state.
Get Your Tax ID in Texas
Today, it is much easier to obtain your EIN because, in addition to mailing in an SS-4 Form, you can apply online using the Texas Tax ID Number Application. As a business, you are identified with your Tax ID or EIN (employer identification number). While it is only optional for DBAs, you must have one if you are starting an LLC or corporation.
Open Separate Business Accounts
Don’t make the mistake of keeping your personal and business accounts the same. Your business needs to have its credit history when it comes to obtaining a loan in the future or acquiring other services like merchant accounts etc.
Get the Required Permits and Business Licenses
To do business, you need to have a business license. At this point, you will also obtain registration for state taxes because will be paying and accepting sales taxes. Keep in mind that there is no income tax in Texas, so that’s one area you will not have to worry about. However, you have to make sure that you have a financial advisor or some other expert entity by your side at the stage of obtaining permits to complete all the processes error-free.
In the end, it is always highly recommended to have a professional accountant and advisor by your side to avoid any legal troubles.