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Starting a Business in Texas? You’ll Need These 7 Legal Requirements

Starting your own business can bring about exciting prospects for financial independence and stability, but it can also present unique challenges.

If you’ve done your research and you’re contemplating starting a business in Texas, you’ll need to fulfill certain legal requirements before you can begin operations.

The following Texas business checklist includes everything you need to ensure your startup is compliant with the law.

1. Business Structure

Before starting a business in Texas, you’ll need to choose a legal structure. 

There are different forms of business. These include sole proprietorships, partnerships, limited liability partnerships (LLPs), corporations, S corporations, and limited liability companies (LLCs). Pick a structure that’s suited to your business needs.

For further details on the different forms of businesses, see Selecting a Business Structure

2. Business Name

Once you’ve decided on the legal structure of your company, you’ll need to file your business name.

Your business name is what people use to identify your organization. Consider registering it as a trademark to enjoy its exclusive use.

Check out this blog on the importance of protecting your Intellectual Property.

3. Business Tax Obligations

Every business has to pay taxes. It’s from these taxes that federal, state and local governments raise the revenue needed to run their operations and projects.

As a business owner, you’ll be required to get an Employer Identification Number (EIN) for tax purposes. If you’ll be selling taxable goods, you’ll need to obtain a sales tax permit.

For more information on your tax responsibilities, see Employer and Tax Information.

4. General Business Licenses

In Texas, you don’t need a general business license to start a company. But the licenses and permits you’ll need depend on the specific type of business you’re starting.

See Apply for Licenses and Permits for guidance on federal and state licenses and permits.

5. Local Licenses and Permits

In Texas, many business licenses and permits are issued by local councils. Some of the common types of licenses and permits that you may need include health permits, zoning permits, occupational permits, building permits, signage permits, and tax permits.

Consult your local council to find out which licenses and permits you’ll need for your business.

6. Business Employer Responsibilities Towards Employees

In Texas and other states, companies have responsibilities towards their employees. The federal government and individual state governments act as custodians of employee benefits. 

To determine federal and state laws on employer responsibilities towards their personnel, check the information for businesses and employers in Texas.

7. Business Insurance

Every business faces uncertainties and risks on a couple of levels. In Texas, businesses are required to have certain types of insurance. One type of insurance required for businesses with employees is a workers’ compensation insurance policy.

Explore the Texas Department of Insurance’s insurance column for an overview of insurance requirements for businesses.

Need to Talk to a Lawyer before Starting a Business in Texas?

As you embark on the process of starting a business in Texas, keep in mind that the circumstances that may influence you to set up shop in the Lone Star state may change over time.

Although there are no guarantees that the status quo will remain forever, you should set your mind at ease knowing that small businesses in Texas enjoy a predictable regulatory environment and a business-friendly climate.

For more legal guidance on opening a business in Texas, contact the lawyers at Manfred Sternberg and Associates. Schedule a meeting to find out how we can assist you. Your first consultation is free, so what are you waiting for?

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