Key Points to Consider When Opening a Small Business in Texas

Opening a small business can be rewarding, but it is not without its risks. Choosing the right corporate structure for your business and following all regulatory requirements can go a long way in protecting your personal assets and preventing future headaches. Indeed, understanding as much as you can about the process can help you get your business off to a good start.

Choosing An Entity

Entrepreneurs in Texas have several options when it comes to choosing a business structure. For some, a sole proprietorship or general partnership may fit best. For others, a limited liability company (LLC) or S corporation may be the right choice. The formation of a corporate entity allows a business owner to separate his personal assets from company assets, which provides protection in the event that the business defaults on a loan or is sued.

Tax Identification Numbers

After you have chosen a corporate structure, register to receive an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The IRS uses EINs to track business tax returns in much the same way as a Social Security Number. In addition, an EIN is required to open bank accounts and establish credit for your business.

Register With The State

The next step is to register with the state of Texas to pay taxes and to obtain a sales tax permit. Depending on the type of business you are opening, it may be necessary to obtain licenses and to pay other taxes. An attorney can provide advice about necessary permits, which services are subject to which taxes, and possible exemptions.

Employee Regulations

It is also necessary to comply with Texas' employee regulations, which require that businesses register for unemployment and provide workers' compensation insurance. It is also necessary to comply with federal rules for withholding taxes from employee paychecks.

A Business Law Attorney Can Help

If you or someone you love is considering opening a small business in Texas, contact an experienced business law attorney. A knowledgeable business law attorney can advise you on your options and help you start your business successfully.