Small businesses in Texas employ over 4.4 million people – that’s nearly half of the state’s workforce. Texas strives to make the task of starting a business easier than other states. The goal: the state government wants its residents to focus on their business and growing the economy instead of bureaucracy. In fact, starting your business in Texas requires only four steps.
1. Choose a name for your business.
If you have decided to structure your business as a sole proprietorship, you can use your own name to classify your business. Sole proprietorships must register with the county they conduct business in. If you choose to file as a sole proprietorship or a general partnership, keep in mind that your personal assets can be at risk if your business is ever sued or defaults on debt.
If you’re hoping to expand, you might want to incorporate as a limited liability company (LLC). Think of a name that encompasses what your company is about – after all, the name you choose is the start of your brand. LLCs must file with the Texas Secretary of State.
2. Be sure to hit up the Internal Revenue Service (IRS).
Taxes. The IRS sets you up with your Employer Identification Number. Your EIN is very similar to your Social Security Number. Your SSN is linked to your personal tax filings. Your EIN is linked to your business tax filings. It’s also necessary so you can establish business credit and business checking accounts in Texas.
3. Obtain a sales tax permit.
All corporations, including LLCs, in Texas are required to pay a franchise tax.
On the upside, Texas does have fewer tax regulations than other states. Plus, the culture has made headline news in the past, being praised for its community-focused mentality and volunteerism. Two things that partner extremely well with small business. With breakthroughs in life sciences and nanotechnology (to name a few), Texas has also become the nation’s fourth-highest state in receiving venture capital funds.
4. Stay up-to-date with employee regulations.
As you begin your business operations, it’s important to register for unemployment with Texas along with worker’s compensation insurance.
A quick tip: look into general liability insurance that protects your company from certain events, such as litigations or work place accidents.
Once your company has funds behind it (whether they be yours or another party’s), you can get your business up and running. As your company scales, our licensed brokers at Decisely ensure your employee benefits align with your business goals. Along with that, the free Decisely platform makes HR, benefits administration, and payroll a breeze. That means more time and a huge money savings that could be used for research and development, office space rent – the options are numerous.
While opening a business can seem daunting, Texas simplifies the process with its clear-cut requirements, small business-minded culture, and encouragement of small business success.