Texas consistently ranks as one of the top states for starting a business, and while there are many advantages to setting up shop in the Lone Star State, there are also legal requirements and recommendations to consider before opening your business.
The best option for accessing the most effective guidance for starting your business is to speak with a business attorney who can provide personalized advice. Each industry and individual company will have different needs and requirements. However, there are some steps that most business owners will need to take if they want to operate in Texas.
Create a Business Plan
While not technically required by the state, writing a business plan is highly recommended because it provides a foundational guide for your business. It outlines key elements of your company, including its structure, purpose, and operational methods. You will also likely need a business plan if you plan on applying for a business loan.
Finance Your Texas Business
Some entrepreneurs save for years or decades to start their businesses, using their own money to fund the beginning stages of their company’s creation and operation. However, people with dreams of self-employment also have the option to apply for a bank loan, pursue a federal loan, or seek funding through alternative methods like crowdfunding and angel investors. How much money you need to get started will vary wildly depending on your inventory, employee, and equipment needs, among a myriad of other considerations.
Structure and Register Your Business
Deciding what type of business entity to form is a challenging part of entrepreneurship. Sole proprietorships, partnerships, limited liability companies, and corporations all offer advantages and disadvantages, and weighing them can be overwhelming. A Texas business attorney is your best resource for guidance on which business structure is best for you. Most business entities are required to register with the Texas Secretary of State, and your business lawyer can help you with this step if it’s necessary.
Obtain a Business License
Texas does not require a general business license to operate in the state, but there may be other types of licenses, permits, or registrations for the type of business activity you will be conducting. There are federal, state, and local considerations for licensure and authorizations, so discuss the nature of your business with a business lawyer to ensure you are compliant.
BOI Reporting Requirements
In addition to the steps mentioned, newly formed businesses must also comply with the federal Beneficial Ownership Information (BOI) reporting requirements, which came into effect as part of the Corporate Transparency Act (CTA). These rules mandate that most newly established businesses, including LLCs and corporations, must report certain information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) within 30 days of formation. This includes details such as the name, date of birth, address, and a unique identifying number (e.g., passport or driver’s license) of individuals who directly or indirectly own or control at least 25% of the business. This information helps combat money laundering and other illicit activities. Be sure to consult Fleurinord Law to ensure timely and accurate BOI reporting, as failing to comply can result in significant penalties.
Additional Considerations Before Starting a Business in Texas
As a current or hopeful entrepreneur, you are likely familiar with the seemingly endless list of considerations and requirements for starting a business in Texas. This list may include:
- Conduct a search for your chosen business name to ensure it’s available
- Determine the tax responsibilities of your new business
- Scout locations for a brick-and-mortar location
- File an assumed name certificate
- Request an Employer Identification Number
- Open a business bank account
- Familiarize yourself with state and federal labor laws
- Create employment documents and hire staff
Contact a Business Attorney for Help Starting Your Texas Business
You deserve personalized guidance that is tailored to the unique needs and goals of your business. Contacting the Texas business lawyers at Fleurinord Law is the best way to ensure you comply with state and federal requirements and that the choices you make now are suitable for your business in the long run. Contact our Houston office at 713-346-2011 to schedule a consultation.