The process for forming a business in Texas is relatively straightforward and is usually handled by the Secretary of State. While the state does not have individual or corporate income taxes, many businesses are subject to other taxes. This includes federal income tax, which must be handled through the IRS.
How To Register a Business in Texas, USA
Assumed Name Certificate
If you are a new business in Texas, filing an Assumed Name Certificate will allow you to conduct business under the name of a business that already exists in Texas. However, you should remember that this certificate will not provide you with exclusive rights to a business name. If you think that someone else might have the same business name, you should apply for trademark rights to secure exclusive rights to the name.
The certificate must state the jurisdiction where the business was formed, and state the address of the owner’s principal office. Once filed, the Assumed Name Certificate is valid for a certain number of years. Once a business has reached the ten-year anniversary of its founding, it is necessary to file an updated certificate. The fees for this certificate must be paid in full at the time of service. Please note that personal checks are not accepted. Credit cards are accepted, but credit card processing fees will be added to the total cost.
Assumed names can provide a number of benefits for a business, but they also increase its exposure to infringement claims. While filing an Assumed Name Certificate is vital for your business, it is not sufficient to protect your brand. Rather, you should also get comprehensive legal counsel from an experienced trademark attorney to help you make the right decisions for your business.
Sole Proprietorship
A sole proprietorship is a type of business that is owned and operated by one person. While this type of business registration in Texas requires little effort, there are certain requirements you must meet in order to operate legally. For example, if you intend to hire employees, you will need to obtain an employer identification number (EIN) from the IRS. You should also check with your local municipality to make sure you have the necessary permits.
You will also need to choose a name for your business. While Texas allows sole proprietors to register their businesses under different names, most people choose a name that is unique to their business. To find out if a name you are interested in has already been registered, check the Texas Comptroller of Public Accounts database.
One disadvantage of starting a business as a sole proprietor is that you will not have access to bank accounts or lines of credit. You also won’t be able to access government grants or loans, and you’ll have more trouble raising capital than a company with another type of business structure. Sole proprietorships also present challenges if you ever decide to sell your business. In addition to incurring a capital gains tax, the new owner will be personally responsible for any debts and obligations.
Once you have chosen a name, you’ll need to submit the required paperwork to the appropriate agency. In Travis County, sole proprietorship DBAs are handled by the Travis County Clerk’s Office. This process ensures that your business name is available for use and is not already in use. Your DBA will last for ten years unless you make any changes to it. In addition to a business name, you’ll need to file a Certificate of Ownership for an Unincorporated Business or Profession Form to legally establish your business.
Partnership
There are two basic types of partnerships: general and limited. A general partnership has a general partner, who makes all the business decisions, and a limited partner, who is primarily an investor. Limited partnerships can be either an individual or a corporation. A limited partnership has limited liability, so the limited partner’s assets are protected.
General partnerships do not have limited liability protection, but they do not require formal business registration. In Texas, they can operate under their assumed business name by filing an Assumed Name Certificate with the county clerk. The filing fee is different in each county. If a general partnership is a foreign entity, it will need to pay an additional fee.
Before forming a partnership, it is important to identify its tax and regulatory obligations. If a partnership will be hiring employees, it must apply for an Employer Identification Number (EIN) with the IRS. This can be done online. Once you have your EIN, you can register your business with the state and request an Employer Handbook.
If a partnership is limited, it is important to identify the person who will serve as the registered agent. The registered agent should have a physical address in Texas and be able to accept the service of process. The registered agent also receives legal correspondence on behalf of the business. If a partnership has an office in Texas, the limited partner may serve as the registered agent, but this requires a physical address. Otherwise, the limited partnership must hire a registered agent.
Corporation
If you want to start a business in Texas, the first step is to register with the Secretary of state’s office. This can be done online or in person. You will need to submit a form containing information such as the name of the business, address, and owner information. If you’re doing it online, you’ll have to pay a small fee for credit card processing. Once your company is registered, you can work on establishing business credit, opening a business checking account, and filing withholding taxes.
You’ll also need to choose a legal structure. You can choose between a corporation and an LLC. Remember that a corporation must have a minimum of 100 shareholders, and all shareholders must be US citizens. In Texas, you must also elect a registered agent for your business.
You may also need to pay state and local taxes. Depending on your business, you might have to pay sales tax, oyster sales tax, mixed drinks tax, fireworks tax, and other taxes. Make sure to separate your business funds from your personal accounts to prevent audits. Additionally, all businesses in Texas must file tax returns and reports. If you’re an individual shareholder or member, you can file a business schedule with your personal tax return. You’ll also need to apply for operating permits, licenses, and business taxes.
Before registering a business in Texas, you should decide on the name of your business. Choose a name that will distinguish your business from other companies. Keep in mind that business names should be easy to pronounce and searchable. In addition, your business name should not already be trademarked. The US Patent and Trademark Office has a database that lists trademarks. Choosing a name that is distinctive from existing companies will prevent any confusion in the future.