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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 '''Determine the potential tax#*$750 filing fee for certificate#Limited Liability Partnership#*Subject to responsibilities of the new business on the federal, state franchise tax#*$200 filing fee for certificate#Limited Liability Company#*Subject to state franchise tax#*$300 filing fee for certificate, and local level.'''

'''Step 2*[https: //www.irs.gov/businesses/small-businesses-self-employed/how-to-apply-for-an-ein Apply] for a Employer Identification Number (EIN) (alternatively called Federal Tax Responsibilities'''Identification Number)**Texas requires that an EIN for businesses, which is used for tax purposes.

*'''Determine the potential tax responsibilities of the new business on the federal, state, and local level.Federal Taxes'''**The Internal Revenue Service will identify and determine your tax liability.

At the federal level*'''State Taxes'''**The state of Texas imposes a state sales tax on "all retail sales, leases and rentals of goods, and services that are expressly enumerated as taxable under the Internal Revenue Service will be the tax collection agencyTexas Tax Code. You will need " Additionally, any taxable business chartered, organized, or doing business is subject to apply for a Employer Identification Number (alternatively called Federal Tax Identification Number) so that the IRS can identify your businessstate franchise tax. That said, most small businesses are exempt from this kind of tax.

The state of Texas imposes a state sales *'''Local Taxes'''**Business Inventory Taxes will be collected at the local level, although many municipalities do not tax on "all retail sales, leases and rentals of goods, and services items that are expressly enumerated as taxable fall under “Goods in Transit Exemption” or 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 tax“Freeport Exemption.”

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

==='''Step 3: Business Licenses Licensing and Permits'''===

There is no general "business" license in the state of *Create bylaws. While Texasdoes not set out any concrete requirements for a corporation's bylaws, instead there are different licensing the bylaws usually contain information about internal rules and procedures for various professions. The Texas Department , responsibilities of Licensing and Registration has a full list officers, the size of the specific professions that need additional accreditationboard, how shareholder meetings will be held. [http://www.dmlp.org/legal-guide/forming-corporation-texas]** You should also contact don't have to file these bylaws with the local government Secretary of the city State. However, Texas law requires you are choosing to operate 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 find out if there are any specific licensing needed to conduct businessget an idea of what should be included.

'''Determine federal and *There is no general "business" license in the state employer requirementsof Texas. *There are different licensing procedures for various laws relating 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 employment of personneloperate in to find out if there are any specific licensing needed to conduct business.'''

As a business owner you have many obligations. You must fulfill Americans with Disabilities Act requirements, Equal Employment requirements, applicable Safety requirements, Wage ==='''Step 4: Federal and Labor requirements, New Hire Reporting, reporting of WorkersState Employer Requirements'' Compensation Insurance, and placement of labor posters.'===

(For more information please browse through the [https://texaswideopenforbusiness'''Determine federal and state employer requirements.com/sites/default/files/pdfs/smallbusinesshandbookThere are various laws relating to employment of personnel.pdf Texas Small Business Handbook])'''

==Summary on Forms Small business owners must fulfill requirements related to: *Americans with Disabilities Act requirements*Equal Employment requirements*Safety requirements*Wage and Fees==Labor requirements*New Hire ReportingForming a For-Profit Corporation:*Workers' Compensation Insurance reporting*Labor Posters placement*Search trademark: [http://www.uspto.gov/trademarks-application-process/search-trademark-database United States Patent and Trademark Office] - FreeOther relevant requirements

*Reserve a name ==Common Forms and Fees for 120 days: **Completing Form 501 located at [http://www.sos.state.tx.us/corp/forms/501_boc.pdf http://www.sos.state.tx.us/corp/forms/501_boc.pdf] - $40**Or reserve a name online at [http://www.sos.state.tx.us/corp/sosda/index.shtml SOSDirect] - $50 per class[https://direct.sos.state.tx.us/help/help-corp.asp?pgTexas Small Businesses==fee]

*Prepare {| 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 certified copy or certificate of status or fact||||10|-| Certificate of formation:**Download the form at for an 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/201_boc203_boc.pdf 203], [http://www.sos.state.tx.us/corp/forms/205_boc.pdf205] - $300**Or file online at , [http://www.sos.state.tx.us/corp/sosdaforms/index206_boc.shtml SOSDirectpdf 206] ($||300) and prepare the following necessary information:***The name and type of entity being formed;|-*** The names and addresses | Certificate of directors and registered agents;*** The number and value of initial authorized shares;*** The business purpose formation for which the entity is being formed;*** The name and address of the organizer (ia nonprofit corporation||[http://www.sos.state.etx., the person responsible for incorporating the company); us/corp/forms/202_boc.pdf 202]||25*** The effectiveness of the filing, which means when you want the document and the entity to become effective; and|-***The signature | Certificate of the organizer.formation for a cooperative association corporation||||25|-*Create bylaws. While Texas does not set out any concrete requirements | Certificate of formation for a corporation's bylawslimited liability partnership or LLLP||[http://www.sos.state.tx.us/corp/forms/701_boc.pdf 701], they should usually contain information about internal rules and procedures, responsibilities of officers, the size of the board, how shareholder meetings will be held.[http://wwwformfiles.dmlpjustia.orgcom/legal-guidepdf/forming-corporation-texas/0285/52.pdf 703]||750** 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.|-| Name reservation (120 days) or renewal||[http://www.statutes.legissos.state.tx.us/DocViewercorp/forms/501_boc.aspx?DocKey=BO%2fBO.21&Phrases=%22Bylaws%22&HighlightType=1&ExactPhrase=True&QueryText=%22Bylaws%22pdf 501]||40** You can also look up sample Texas bylaws in order to get an idea |-| Registration of what should be included.trademark||[http://businesswww.sos.state.utsatx.eduus/citecorp/filesforms/spring15/12083328_2_Bylaws%20(Texas%20Corporation)901.pdf901]||50 (per class)|-| Expedited processing of a document submitted for filing (except trademark documents)||||25|}

*Request an Employer Identification Number (EIN). Texas requires that you have an EIN, also known as For a federal tax identification number, which is comprehensive list of all forms used to identify businesses for tax purposes. Apply online for an EIN at register a business or nonprofit, 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_boc.shtml the SoS's compiled list].

*'''Certificate For a comprehensive list of Fact''' - $15*'''Certificate of formation for a Texas entity (except nonprofit corporationreport forms, cooperative association, PA or LP)please see [http://www.sos.''' - $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 LLLPstate. Forms: 701, 703''' - $200 per partner*'''Foreign entity application for registration (except nonprofit corporation, LLP, cooperative association, or credit union)tx.''' - $750*'''Name reservation (120 days) or renewalus/corp/forms_reports. 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 factshtml the SoS''' - $10*'''Application for Registration of Trademarks compiled list]. Form: 901''' - $50 per class

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

[[Category: SBDE]][[category: Public]]