How to Start a Business in Texas

Introduction

Texas is home to some of the biggest cities in the U.S., but it’s also got a strong rural economy. Texas is great for business owners because there are no limits on the number of employees you can hire and no state income tax. This guide will walk you through how to start a business in Texas, including what it takes to register your company as an LLC or corporation and how much it costs to incorporate in Texas compared with other states like Nevada or Delaware (where most people choose).

Decide on a Type of Business Entity

There are a number of business entities available to you. The most common ones in Texas are:

• Corporation
• Partnership
• Sole proprietorship (individual)
• Limited liability company (LLC)

You’ll need to determine which type of entity best suits your goals and circumstances. Each type has its own rules, reporting requirements, and tax consequences. Some may require more paperwork than others. Also, keep in mind that each entity offers different levels of liability protection as well as flexibility in ownership structure.

Choose a Name for the Business

Choosing a name for your business is one of the most important decisions. A good name can help customers remember and identify your business; choose one that is easy to spell and remember, does not already exist, and has positive connotations.

File the Required Formation Documents

The next step is to file the required formation documents with the Secretary of State, Texas Workforce Commission, and IRS. These include:

• Articles of Organization (for corporations)
• Application for Employer Identification Number (EIN)
• This file is filed by sole proprietorships.

Register with the Texas Workforce Commission

To start your business in Texas, you must register with the Texas Workforce Commission (TWC) as an employer or individual. If you are an LLC or corporation, you need to register as a business entity with TWC.

You can also register with TWC as a non-profit if that is how your company operates.

Once you have applied for and received an EIN from the IRS, follow these steps:

• Go to the website of the Texas Workforce Commission
• Click on “Create/Update an Account”
• Enter all information required by TWC about yourself and your business

Apply for an EIN and Open a Bank Account for your Business

Before you can start a business, you must first apply for an Employer Identification Number (EIN). The EIN identifies your company and allows the IRS to distinguish it from other entities. To apply for an EIN, visit the IRS website and fill out Form SS-4 online or print out the form and mail it in.

Once you have your EIN, open a bank account at a financial institution of your choice. Your bank will likely give you everything: checks, debit cards, and even cashier’s checks (which are like personal checks but come with more security features).

Takeaway

If you’re planning on starting a business, it’s important to think about what kind of entity you’ll form. There are many different types of entities, and each has its own advantages and disadvantages. Choosing the right one can make all the difference in whether or not your business succeeds.

Conclusion

Starting a business in Texas can be a daunting task, but it doesn’t have to be. The state has many resources available to help you get started and keep going along the way. If you have questions about starting a business or need assistance with any of the steps listed here, we encourage you to reach out to us.