How Can You Start Your Own Business in Texas?
The Lone Star State is home to more than 28 million people, making it one of the best cities for starting a new business. You’ll find investors who can help you launch a business or grow an existing business, along with millions of potential customers who want to buy from you. Though you usually need a business plan before you start, launching a small business in Texas is easier than you might think. The following steps you can follow to register with the state before your business goes live.
Choose Your Ownership Type
Choosing your ownership type is one of the most important things you need to do. A sole proprietorship is the best option if you have no more than five employees and want a simple way to operate your business. The downsides of a sole proprietorship are that you are liable for anything your business does, and you take on more of the risks. A limited liability partnership is a formal business owned by two or more people. One of the best options for business owners in Texas is a limited liability company or LLC. Owning an LLC in Texas separates your personal finances from those of your business and can help you save on your taxes.
Create a Business Plan
Unless you can afford to pay all of your business’s operating expenses on your own, you need a business plan. A business plan covers almost everything relating to your company. It shows the supplies and other things that you need as well as the research you did to show why your business will succeed. You will need to show your business plan to potential investors to get money from them. The Small Business Administration (SBA) and other organizations also require a copy of the plan if you apply for grants or loans.
Pick Your Name and Address
To own and operate an LLC in Texas, you must have a unique name and address for your business. While you can use your home address when you start, you cannot give your business the name of any other company in the state. The Texas Secretary of the State has a website where you can enter the name you want to use and search for any matches. If you find that another company already uses the name, you need to pick a different one. Though you have the option of buying the name from the current owner, it can take a lot of time and money.
Name Your Registered Agent
Texas requires that every business have a registered agent. The registered agent is usually the person who is responsible for the daily operations of the business. This individual will go through the mail you get and respond to it. You can name yourself as the registered agent or pick someone who will work as a manager. The Certificate of Formation in Texas is a legal document you need to complete when you register your business. While you can name your agent on this form, you also need to file a form called the Acceptance of Appointment and Consent to Serve as Registered Agent.
Get Permits and Licenses
You will need licenses and permits to run a company in Texas, depending on the type of business you operate. You must complete your tax registration, which shows that you will sell goods in the state and pay taxes on the money you make. If you have an LLC and plan to file separate taxes for it, you also need an Employer Identification Number (EIN) from the federal government. You also need an EIN if your business hires employees. It’s often helpful to get your insurance at the same time. You need property coverage if your business has even one physical location, as well as liability coverage to protect your assets.
Become a Texas Business Owner
Becoming a business owner in Texas doesn’t take as long as you might think. Once you have a business plan drawn up and the right name, you can register with the state and name your registered agent. Owning an LLC in Texas is usually easier than owning another type of business because it gives you more protection and separates your personal assets from your business assets. As a business owner in the Lone Star State, you can watch your profits grow with time.
