Starting a business in Texas is an exciting venture, but it's important to understand the legal requirements and regulations that come with it. A corporation is a legal entity with limited liability, centralization of administration, perpetual duration and ease of transfer of ownership interests. The owners of a corporation are called “shareholders” and the people who manage the business and affairs of a corporation are called “directors”. However, state corporate law does provide for shareholders to enter into shareholder agreements to eliminate directors and provide for shareholder management.
Choosing the best management structure for your corporation is a decision you make with the advice of a lawyer. A limited liability company (LLC) is not a partnership or a corporation, but is a different type of entity that has the powers of both a corporation and a partnership. Depending on how the LLC is structured, it can be compared to a general partnership with limited liability, or to a limited partnership in which all owners are free to participate in management and all have limited liability, or to an “S” corporation without the tax and ownership restrictions imposed by the Internal Revenue Code. Unlike the company, where the key element is the individual, the essence of the limited liability company is the entity, which requires more formal requirements for its creation.
LLC owners are referred to as “members”. A member can be an individual, a partnership, a corporation, a trust, and any other legal or business entity. In general, members' liability is limited to their investment and they can enjoy the transferred tax treatment provided to partners in a partnership. As a result of federal tax classification rules, an LLC can achieve structural flexibility and favorable tax treatment. However, individuals considering forming an LLC are encouraged to consult competent legal counsel.
Creating a Texas LLC is by far the easiest way to start a business and you can do that quite quickly once you have your identification and documents together. Creating an LLC in Texas will legitimize your products and services while providing protection for your personal assets. Like Corporation S, a Texas Limited Liability Company also offers transferred taxes to its owners, so only a personal tax return with an attached Schedule C is required to report expenses, gains and losses. An LLC can be owned by an unlimited number of members, non-citizens, and even other companies. This comprehensive permit guide provides a list of state permits that may be required for individuals who want to operate a commercial business in the state. A false name certificate must be obtained to use your unique business name as part of your company's identity in the Lone Star State.
There is no general business license in Texas; however, depending on the type of business the entity participates in, additional licensing requirements from other Texas agencies may apply. A registration certificate or false name certificate does not authorize the use of the name in violation of another person's legal rights and does not, by itself, offer trademark protection. A well-designed business plan doesn't just help you get organized as you start your small business in Texas. You'll find links to business and employer services, free hiring, and everything you need to know about being a Texas employer. Companies of all sizes have made the Lone Star the state home, thanks to the absence of corporate or personal taxes at the state level. The best way to ensure you receive the right protection at the best price is to talk to a business insurance representative or request a quote online.
Getting a business credit card is also a great way to start building business credit and provide a safety net if you need a little extra capital. If your company falls into one of the following categories, you will need to apply online, by mail, or by fax. It may seem trivial but choosing a unique name for your Texas business early on is the simplest approach to naming your business. You have other economic hurdles to overcome when starting and running your business in Texas, especially if you have employees. Your sole proprietor assumes your name unless you want to create a “DBA” certificate to give it another name which will be archived in every county where business is conducted. If the business is conducted under a false name (a name other than the person's last name), a false name certificate (commonly referred to as DBA) must be presented to the clerk's office in the county where the business premises are being maintained.
Leave Reply