Whether you are thinking of setting up an LLC in Texas or on a corporate level, the first step is to choose a niche. You ought to be clear about the industry you plan to enter to decide on the most appropriate business structure. Here is a list of business structures with their differences that you must know before starting your own business in Texas.

1. Sole proprietorship: Here, one person alone takes part in all business activities.
2. General Partnership: As the name suggests, this involves partnerships running businesses.
3. Corporations: This type of business is distinguished by centralized management. There exists a clear distinction between shareholders, who own a business, and directors, who run it.
4. A limited liability corporation (LLC) is a type of corporation that combines aspects of a partnership with those of a corporation. It is most suited for your “starting a small business in Texas checklist.”

Choosing the right entity is perhaps the most crucial point of our checklist for “How to Start a Small Business” in Texas, USA. Your niche as well as your long-term business plans will determine which entity is best for you. Corporations and LLCs are the most popular, especially in the age of small businesses. Here is a comparison between both to help you. Whether you are wondering “How to Open an Online Business in Texas” or you want to build a large-scale business, this information will be profoundly vital.

Firstly, corporations are for those who aim for large-scale growth through fundraising, while setting up an LLC in Texas is beneficial for small businesses. The core differences between the two are:

• Liability: In the case of an LLC, the owner has a chance of clearly demarcating personal assets from the business assets. Hence, in the event of the bankruptcy of the company, the owner would not have to worry much about personal possessions being taken away.
• An LLC is safe from double taxation since its profits are viewed as your income and taxed as such. However, a corporation pays taxes at both the federal and state level.
• Regulations: Unlike a corporation, an LLC is not bound to conduct regular meetings and voting.
• An LLC will be terminated if any of the initial partners leaves, since the LLC’s ownership is not transferable. However, a corporation’s ownership is easily transferable.

Even if you are starting an online business, you must take this step in our “Starting an online business in Texas checklist” extremely seriously. It’s a simple step but crucial. The name will come to define your brand as well as the values and emotions customers and clients will associate with it. It also has two major legal requirements:

1. The chosen business entity must be included. In other words, your corporate tag must be there. For instance, add LLC for a limited liability corporation and INC for a C-corp.
2. Lastly, it should be original and unique. The name you have chosen for your business should not be in use by any other business or even be similar. One can simply call +1 (512) 977-0555 to check the availability or do a name search. The option of asking your query at info@atxregisteredagent.com is also available to all.

It is mandatory to appoint a registered agent for your business to start in Texas. The primary role of the person is to receive legal documents, including service of process, at your behest. Although anyone can fulfill the role, even your friends, it is best advised to hire one from a professional company. This would have two benefits:

1. You will not have to scurry through hundreds of legal notices to find the relevant ones.
2. Your address would not be required in the records. e.

An operating agreement is a manual laying down the general operating guidelines of your organization. The document covers a wide array of information about profit splitting, procedures for hiring and leaving, as well as management of daily work. Furthermore, it will incorporate the governing process of the organization into adherence to the applicable laws.

Naturally, the princess is different for every entity. For an LLC, it is mandatory to include ownership percentage, the type of management, regulations for members and the power they hold, and the distribution of gains and losses. A corporation must address the names of directors, the responsibilities and authority of directors, the initial endowment of the owner(s), voting rights details, and much more.

This stage of our starting a small business in Texas checklist is highly delicate. This is where your business gains formal recognition from the state. During the acceptance process, the state will analyze whether your business can be legitimized or not. The success of the stage is directly connected to our first step, as the state is evaluating whether your small niche meets the requirements of the preferred business structure or not. You must pay a small fee to the Texas Secretary of State here.

An employer’s identification number is your federal tax ID. It is important for opening your business account and for filing appropriate taxes. Although it is not mandatory to obtain it, it is helpful to have it.

While there is no general business license in Texas, there are some specific license requirements. Depending on your business, you must check which licenses are necessary for your niche. You can simply visit the official Texas state website for a detailed account and a list of required licenses.

If you are a corporation, it is more than advisable to hold the very first meeting as soon as possible. This meeting should involve all stakeholders and directors, as well as members of the business. The agenda should be to hold an initial meeting with all members/owners of your company. The agenda should be to ensure that the business is ready to open in its full glory, i.e., to assess the level of preparation for opening and fill in any gaps that might remain. Even if you are not a C-Corp business, this meeting could prove to be highly beneficial as it might lay the foundation for a smooth start. In fact, you must duly make sure that the meeting records are well kept.

Having a separate bank account for your business can be a smart move. It will help you draw a line between your assets and your business (which is a legal entity in itself).

You must be fully aware of your tax responsibilities and ensure that everything that is required to file it is well documented and organized. If you are not careful enough, starting your own business in Texas could become a tragedy. Not only would you be liable to pay more taxes, but it might also land you in legal trouble.

Moreover, every single niche in Texas is bound to give an annual Texas Franchise Tax and Information report by May 15th. Even if your revenues are less than the nontaxable limit, which is $1,230,000, you must file to add legal value to your business.

As we come to the end of our “How to Open an Online Business in Texas checklist,” it is essential to say that choosing the right business entity is more than critical. A corporation has the power to raise venture capital funds, for example. Lastly, you can fund your business through several resources. For example, angel investors, personal loans, corporate funding,

Any business is a good business to start in Texas given its business-friendly laws. You just need the right attorney and advisor to make the most of the laws. If you have any doubt about anything mentioned in our checklist or are still wondering about “How to Start a Business in Texas in 2022,” contact us for the right guidance and support.