Difference between revisions of "How to Start a Company in Texas"

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*Request an Employer Identification Number (EIN). Texas requires that you have an EIN, also known as a federal tax identification number, which is used to identify businesses for tax purposes. Apply online for an EIN at [https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN].
 
*Request an Employer Identification Number (EIN). Texas requires that you have an EIN, also known as a federal tax identification number, which is used to identify businesses for tax purposes. Apply online for an EIN at [https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN].
 
[[Category: Public]]
 
 
==Misc. information on forms and fees==
 
  
 
'''Payment Methods'''
 
'''Payment Methods'''
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*Cash (for in-person submissions only)
 
*Cash (for in-person submissions only)
  
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==Common Forms and Fees==
  
 
*'''Certificate of Fact''' - $15
 
*'''Certificate of Fact''' - $15
*'''Certificate of formation for a Texas entity (except nonprofit corporation, cooperative association, PA or LP). Forms: 201, 203, 205, 206''' - $300
+
*'''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
 
*'''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: 701, 703''' - $200 per partner
 
*'''Registration or renewal as a Texas limited liability partnership or LLLP. Forms: 701, 703''' - $200 per partner
*'''Foreign entity application for registration (except nonprofit corporation, LLP, cooperative association, or credit union). Forms: 301, 303, 304, 305, 306, 309, 311, 312, 313)''' - $750
+
*'''Foreign entity application for registration (except nonprofit corporation, LLP, cooperative association, or credit union).''' - $750
 
*'''Name reservation (120 days) or renewal. Form: 501''' - $40
 
*'''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 document submitted for filing (except trademark documents)''' - $25
 
*'''Expedited processing of a request for a certified copy or certificate of status or fact''' - $10
 
*'''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 class
 
*'''Application for Registration of Trademark. Form: 901''' - $50 per class
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[[Category: Public]]

Revision as of 17:32, 19 October 2016

Basic process

Step 1: Business Structure and Name

Determine the legal structure of the business and properly file the business name with the state and/or county.

  1. Sole Proprietorship
    • Subject to state franchise tax
  2. For Profit Corporation
    • Subject to state franchise tax
    • $300 filing fee for certificate
  3. Professional Corporation
    • Subject to state franchise tax
    • $300 filing fee for certificate
  4. Professional Association
    • Subject to state franchise tax
  5. General Partnership
    • Not subject to state franchise tax
  6. Limited Partnership
    • Subject to state franchise tax
    • $750 filing fee for certificate
  7. Limited Liability Partnership
    • Subject to state franchise tax
    • $200 filing fee for certificate
  8. Limited Liability Company
    • Subject to state franchise tax
    • $300 filing fee for certificate

Step 2: Tax Responsibilities

Determine the potential tax responsibilities of the new business on the federal, state, and local level.

At the federal level, the Internal Revenue Service will be the tax collection agency. You will need to apply for a Employer Identification Number (alternatively called Federal Tax Identification Number) so that the IRS can identify your business.

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 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.

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 “Freeport Exemption.”

Lastly, the Texas Workforce Commission will collect Unemployment Insurance tax from most businesses.

Step 3: Business Licenses and Permits

Determine necessary licenses, permits, certifications, registrations, and/or authorizations for a specific business on the federal, state, and local level.

There is no general "business" license in the state of Texas, instead there are different licensing procedures for various professions. The Texas Department of Licensing and Registration has a full 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 Employer Requirements

Determine federal and state employer requirements. There are various laws relating to employment of personnel.

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

(For more information please browse through the Texas Small Business Handbook)

Summary on Forms and Fees

Forming a For-Profit Corporation:

  • Prepare a certificate of formation:
    • Download the form at http://www.sos.state.tx.us/corp/forms/201_boc.pdf - $300
    • Or file online at 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.
  • Create bylaws. While Texas does not set out any concrete requirements for a corporation's bylaws, they should usually contain information about internal rules and procedures, responsibilities of officers, the size of the board, how shareholder meetings will be held.[2]
    • 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.[3]
    • You can also look up sample Texas bylaws in order to get an idea of what should be included.[4]

Payment Methods

Fees may be paid by:

  • Check (personal or firm checks accepted) or money order payable to the Secretary of State through a U.S. Bank or financial institution
  • Credit card (Credit card payments are subject to an additional statutory convenience fee of 2.7% of amount charged.)
  • LegalEaseSM debit card
  • Prefunded SOS client account
  • Cash (for in-person submissions only)

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: 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 class