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This page is a part of the McNair Center's [[Guide to Small Business in Houston]]. This is an overview on how to create a business in Texas. For more comprehensive guidance and assistance, consult the [https://texaswideopenforbusiness.com/sites/default/files/pdfs/smallbusinesshandbook.pdf Texas Small Business Handbook]. ==Basic processProcess====='''Step 1: Business Structure and Name''' ===

#Sole Proprietorship#*Subject to state franchise tax#For Profit Corporation#*Subject to state franchise tax#*$300 filing fee for certificate#Professional Corporation#*Subject to state franchise tax#*$300 filing fee for certificate#Professional Association#*Subject to state franchise tax#General Partnership#*Not subject to state franchise tax#Limited Partnership#*Subject to state franchise tax#*$750 filing fee for certificate#Limited Liability Partnership#*Subject to state franchise tax#*$200 filing fee for certificate#Limited Liability Company#*Subject to state franchise tax#*$300 filing fee Search for certificateexisting [http://www.uspto.gov/trademarks-application-process/search-trademark-database trademarks] - Free

*Reserve a name for 120 days: **Complete [http://www.sos.state.tx.us/corp/forms/501_boc.pdf Form 501] located at - $40**Or reserve a name online at [http://www.sos.state.tx.us/corp/sosda/index.shtml SOSDirect] - $50 per [https://direct.sos.state.tx.us/help/help-corp.asp?pg=fee class] *Prepare a certificate of formation:**Download the [http://www.sos.state.tx.us/corp/forms/201_boc.pdf form] - $300**Or file online at [http://www.sos.state.tx.us/corp/sosda/index.shtml SOSDirect] ($300) and prepare the following necessary information:***The name and type of entity being formed;*** The names and addresses of directors and registered agents;*** The number and value of initial authorized shares;*** The business purpose for which the entity is being formed;*** The name and address of the organizer (i.e., the person responsible for incorporating the company); *** The effectiveness of the filing, which means when you want the document and the entity to become effective; and***The signature of the organizer.  {| class="wikitable sortable" style="border: 1px solid darkgray; bgcolor: #f9f9f9"|+ align="center" size="14px"|'''Business Filing Fees'''| align="center" style="background:#f0f0f0;"|'''Business Type'''| align="center" style="background:#f0f0f0;"|'''Filing Fee ($)'''| align="center" style="background:#f0f0f0;"|'''State Franchise Tax'''|-| Sole Proprietorship||0||Yes|-| For-Profit Corporation||300||Yes|-| Professional Corporation||300||Yes|-| Professional Association||0||Yes|-| General Partnership||0||No|-| Limited Partnership||750||Yes|-| Limited Liability Partnership||200||Yes|-| Limited Liability Company||300||Yes|} ==='''Step 2: Tax Responsibilities'''===

At the federal level, the Internal Revenue Service will be the tax collection agency*[https://www.irs. You will need gov/businesses/small-businesses-self-employed/how-to -apply -for-an-ein Apply] for a Employer Identification Number (EIN) (alternatively called Federal Tax Identification Number) so **Texas requires that the IRS can identify your businessan EIN for businesses, which is used for tax purposes.

*'''Federal Taxes'''**The state of Texas imposes a state sales tax on "all retail sales, leases Internal Revenue Service will identify and rentals of goods, and services that are expressly enumerated as taxable under the Texas Tax Code." Additionally, any taxable business chartered, organized, or doing business is subject to a state franchise tax. That said, most small businesses are exempt from this kind of determine your taxliability.

Business Inventory *'''State Taxes will be collected at the local level'''**The state of Texas imposes a state sales tax on "all retail sales, leases and rentals of goods, although many municipalities do not tax items and services that fall are expressly enumerated as taxable under “Goods in Transit Exemption” the Texas Tax Code." Additionally, any taxable business chartered, organized, or the “Freeport Exemptiondoing business is subject to a state franchise tax. That said, most small businesses are exempt from this kind of tax.”

Lastly*'''Local Taxes'''**Business Inventory Taxes will be collected at the local level, although many municipalities do not tax items that fall under “Goods in Transit Exemption” or the Texas Workforce Commission will collect Unemployment Insurance tax from most businesses“Freeport Exemption.”

*'''Other Taxes'''**The Texas Workforce Commission will collect Unemployment Insurance tax from most businesses.  ==='''Step 3: Business Licenses Licensing and Permits'''===

*Create bylaws. While Texas does not set out any concrete requirements for a corporation's bylaws, the bylaws usually contain information about internal rules and procedures, responsibilities of officers, the size of the board, how shareholder meetings will be held.[http://www.dmlp.org/legal-guide/forming-corporation-texas]** You don't have to file these bylaws with the Secretary of State. However, Texas law requires you keep this document at your main office.[http://www.statutes.legis.state.tx.us/DocViewer.aspx?DocKey=BO%2fBO.21&Phrases=%22Bylaws%22&HighlightType=1&ExactPhrase=True&QueryText=%22Bylaws%22]** You can also look up [http://business.utsa.edu/cite/files/spring15/12083328_2_Bylaws%20(Texas%20Corporation).pdf sample] Texas bylaws in order to get an idea of what should be included.  *There is no general "business" license in the state of Texas, instead there .*There are different licensing procedures for various professions. **The Texas Department of Licensing and Registration has a full [http://www.tdi.texas.gov/forms/fincolicense/fin325retalreqs.pdf list ] of the specific professions that need additional accreditation. *You should also contact the local government of the city you are choosing to operate in to find out if there are any specific licensing needed to conduct business.

==='''Step 4: Business Federal and State Employer Requirements''' ===

As a Small business owner you have many obligations. You owners must fulfill requirements related to: *Americans with Disabilities Act requirements, *Equal Employment requirements, applicable *Safety requirements, *Wage and Labor requirements, *New Hire Reporting, reporting of *Workers' Compensation Insurance, and reporting*Labor Posters placement of labor posters. (For more information please browse through the [https://texaswideopenforbusiness.com/sites/default/files/pdfs/smallbusinesshandbook.pdf Texas Small Business Handbook])*Other relevant requirements

==Summary on Common Forms and Feesfor Texas Small Businesses==Forming a For-Profit Corporation:*Search trademark: [http://www.uspto.gov/trademarks-application-process/search-trademark-database United States Patent and Trademark Office] - Free

*Reserve {| class="wikitable sortable" style="border: 1px solid darkgray; bgcolor: #f9f9f9"|+ align="center" size="14px"|'''Common Forms and Fees'''| align="center" style="background:#f0f0f0;"|'''Filing Type'''| align="center" style="background:#f0f0f0;"|'''Additional Form(s)'''| align="center" style="background:#f0f0f0;"|'''Filing Fee ($)'''|-| Certificate of fact||||15|-| Expedited processing of a request for a name certified copy or certificate of status or fact||||10|-| Certificate of formation for 120 daysan entity (except nonprofit corporation, cooperative association, PA or LP).||[http://www.sos.state.tx.us/corp/forms/201_boc.pdf 201],[http://www.sos.state.tx.us/corp/forms/203_boc.pdf 203], [http: **Completing Form 501 located at //www.sos.state.tx.us/corp/forms/205_boc.pdf 205], [http://www.sos.state.tx.us/corp/forms/501_boc206_boc.pdf 206]||300|-| Certificate of formation for a nonprofit corporation||[http://www.sos.state.tx.us/corp/forms/501_boc202_boc.pdf202] ||25|-| Certificate of formation for a cooperative association corporation||||25|- $40**Or reserve | Certificate of formation for a name online at limited liability partnership or LLLP||[http://www.sos.state.tx.us/corp/sosdaforms/index701_boc.shtml SOSDirectpdf 701] , [http://formfiles.justia.com/pdf/texas/0285/52.pdf 703]||750|- $50 per class| Name reservation (120 days) or renewal||[httpshttp://directwww.sos.state.tx.us/helpcorp/forms/help501_boc.pdf 501]||40|-| Registration of trademark||[http://www.sos.state.tx.us/corp/forms/901.asp?pg=feepdf 901]||50 (per class)|-| Expedited processing of a document submitted for filing (except trademark documents)||||25|}

*Prepare For a certificate comprehensive list of formation:**Download the form at [http://www.sos.state.tx.us/corp/all forms/201_boc.pdf http://www.sos.state.tx.us/corp/forms/201_boc.pdf] - $300**Or file online at used to register a business or nonprofit, please see [http://www.sos.state.tx.us/corp/sosda/indexforms_boc.shtml SOSDirectthe SoS's compiled list] ($300) and prepare the following necessary information:***The name and type of entity being formed;*** The names and addresses of directors and registered agents;*** The number and value of initial authorized shares;*** The business purpose for which the entity is being formed;*** The name and address of the organizer (i.e., the person responsible for incorporating the company); *** The effectiveness of the filing, which means when you want the document and the entity to become effective; and***The signature of the organizer.

*Create bylaws. While Texas does not set out any concrete requirements for For a corporation's bylaws, they should usually contain information about internal rules and procedures, responsibilities comprehensive list of officersall forms used to trademark corporations, the size of the board, how shareholder meetings will be held.please see [http://www.dmlp.org/legal-guide/forming-corporation-texas]** You don't have to file these bylaws with the Secretary of State but Texas law requires you keep this document at your main office.[http://www.statutes.legissos.state.tx.us/DocViewercorp/trademark.aspx?DocKey=BO%2fBO.21&Phrases=%22Bylaws%22&HighlightType=1&ExactPhrase=True&QueryText=%22Bylaws%22shtml the SoS's compilation of trademark forms]** You can also look up sample Texas bylaws in order to get an idea of what should be included.[http://business.utsa.edu/cite/files/spring15/12083328_2_Bylaws%20(Texas%20Corporation).pdf]

*Request an Employer Identification Number (EIN). Texas requires that you have an EIN, also known as For a federal tax identification numbercomprehensive list of report forms, which is used to identify businesses for tax purposes. Apply online for an EIN at please see [httpshttp://www.irssos.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN https://wwwstate.irstx.govus/Businessescorp/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EINforms_reports.shtml the SoS's compiled list].

'''The SoS has also created a [http://www.sos.state.tx.us/corp/formationfaqs.shtml Business Formation FAQ].===Payment Methods'''===

==Common Forms and Fees== *'''Certificate of Fact''' - $15*'''Certificate of formation for a Texas entity (except nonprofit corporation, cooperative association, PA or LP).''' - $300*'''Certificate of formation for a Texas nonprofit corporation (form 202) or cooperative association (no form provided)''' - $25*'''Registration or renewal as a Texas limited liability partnership or LLLP. Forms[[Category: 701, 703''' - $200 per partner*'''Foreign entity application for registration (except nonprofit corporation, LLP, cooperative association, or credit union).''' - $750*'''Name reservation (120 days) or renewal. Form: 501''' - $40*'''Expedited processing of a document submitted for filing (except trademark documents)''' - $25*'''Expedited processing of a request for a certified copy or certificate of status or fact''' - $10*'''Application for Registration of Trademark. Form: 901''' - $50 per classSBDE]][[Categorycategory: Public]]