How To Start A Business In Texas

The process for starting a business in the State of Texas first and foremost can benefit from 1) Assessment of the achievability/feasibility of the business via careful planning and business strategy 2) determining what kind of business it will be ex- sole proprietorship 3) which county or counties the business will operate out of 4) the name of the business if any and 5) the service category of the business ex-cattle ranch. Several preliminary steps to starting a Texas business may be garnered by contacting and reviewing the following resources:

• U.S. Small Business Administration (SBA)

• University of Houston Small Business Development Center Network

• Texas Secretary of State

• U.S. Internal Revenue Service

• Texasonline.com "The official portal of Texas"

The above institutions and websites offer information and tips on starting businesses in Texas, steps required for business formation, corporate documentation fees, and provide links to the State's requirements for incorporation and the federal government's tax related requirements. Additional resources may include research of individual businesses through discussion with business owners and/or literature review of business start up procedures written by Texas business owners and organizations.

Texas business related forms and procedure

Depending on the type of business being created, official procedure with local, state and federal Government entities may include any of the following steps 1) Permit or license acquisition 2) Completion of federal tax related forms 3) Certification and documentation of business formation with the Texas Secretary of State and 4) establishment of any additional legal, insurance and tax related agreements.

Documents and forms that may be required to start a business in Texas vary on the category of business, business operation, employees if any, and business structure i.e. shareholders vs. single owner, partnership or limited liability. A few of the forms, applications and procedures that may be required are listed below and are the same as other States in the case of Federal tax related documentation requirements.

• Business license or permit

• Business name registration with county clerk

• U.S. Internal Revenue Service Form SS-4 (EIN application)

• Certificate of business formation (for corporations and partnerships)

• Articles of incorporation and bylaws (if required)

• Trademark and/or patent registration

• Attaining of a registered agent

Obtaining a Texas 'registered agent' can be of assistance in the formation of a business as these entities serve as facilitators of business formation but do require a fee. According to Section 5.251 of the Texas Business Organizations Code, the office of the Secretary of State assumes the role of a registered agent if no registered agent is obtained. Unlike other states this may bypass the services and requirement of obtaining a registered agents.

Essential documentation and requirements vary on the type of business, location of business and complexity of business operations. Generally, the simpler a business is, the less paperwork is required to start the business. For example, in the case of sole proprietorships an Employer Identification Number (EIN) is not required and is replaceable by a social security number of the sole proprietorship has no employees. Additionally, a sole-proprietorship does not require a certificate of business formation and if one's individual name is used as the name of the business, no name registration is needed.

In the case of partnerships, limited liability corporations, S-corporations and C-corporations, registration, documentation requirements and federal filings can vary along with associated fees. Ideally, a business will already have a good idea of its plan, capital structure, ownership, licensing needs, property and/or location related requirements before the official formation or transformation from another type of business occurs.

In some instances of business formation, especially with larger and more elaborate business types, the need for business related services might arise. In other words, when there is doubt about specifics in a business's legality, strategic or tax plan, obtaining the assistance of professionals that specialize in the area of business pursued may be helpful. Specifically, tax accountant, business attorney, and business consulting services are obtained by businesses for matters requiring specialized knowledge in these areas.

Summary

Starting a business in Texas may be envisioned with the blink of an eye, however the formation of the business doesn't, especially in the case of businesses that are not sole-proprietorships. A good business model, sense of direction, understanding of formalities, knowledge of operating environment, market etc. can help in avoiding losing capital from personal business financing or any other type of business funding. Moreover, consulting resources such as those listed in this article may also assist with some of the requirements necessary for starting a business in Texas. In any case, the State of Texas is considered one of the better States's to start a business because of its low corporate taxes, State economy and in the case of sole-proprietorships lack of State income tax.

Sources:

1. http://tlo2.tlc.state.tx.us/statutes/bo.toc.htm
2. http://www.texasonline.com/guide/index.jsp
3. http://www.governor.state.tx.us/divisions/ecodev/sba/guide
4. http://www.irs.gov
5. http://www.sos.state.tx.us/corp/related.shtml