Texas has justly earned a business-friendly reputation. Besides a low tax burden for business owners, whether individual or corporate, the simple state regulations for businesses to remain compliant also make the state popular. Over the last few years, Texas has attracted many U.S. conglomerates thanks to its strong-growth metropolitan areas, its diverse business community, and its demand for products.
These reasons also contribute to Texas holding the title of second exporter state in the U.S. after California with $279.3 billion of exports in 2020, according to statistics from the U.S. Department of Commerce’s Bureau of Economic Analysis. Texas’ main exports don’t only include petroleum and gas but also various parts and circuits for computers, machinery, and aircraft.
Key Factors to Consider as You Start a Business in Texas
As you plan to start up your business in Texas and partake in this vibrant economy, the following are some key factors you should consider.
Incorporation Guru, the experts in business formations and business management services, offers the following advice on how to start a new LLC in Texas.
Decide on a Business Structure
All businesses in Texas benefit from the lower taxation, but LLCs and corporations also offer personal liability protection. Creating a formal business entity also has another advantage, exclusive rights to your business name.
LLCs are quicker to form than corporations because there are fewer steps involved. LLCs can also choose how they prefer to be taxed, as a pass-through entity, S-corp, or C-corp.
Then again, corporations attract more investment capital than LLCs, and they can sell stock to increase funding. If you plan to also expand to other states, corporation structures make it easier to do.
Register Your Business
Once you figure out the type of entity that suits your business best, the next step is to register your business.
Of course, before registering it, you need to create a unique name for your business that is appropriate to the products or services you want to sell. Once you have established the name’s availability and chosen a domain name, you are ready to register your business with the Secretary of the State.
You have several options on how to do this. The first way is to find all the paperwork required online and submit them yourself. If this seems like a lot of effort at a time when you are planning and developing your business, you can approach a lawyer to do the legwork for you. Finally, there is an even easier way, find an online business formation company that will do it for a minimal fee. Remember that during your business registration process, you need to submit the name of a registered agent service. ZenBusiness and Incfile are two popular companies that provide the first year of registered agent services for free if you do your business formation with them.
Besides business formation and registered agents, these companies also offer resources that save you time as you grow your business, including acquiring an Employer Identification Number (EIN) your business social security number. They will also ensure your annual reporting services and other compliances are always up-to-date.
Once you have registered your business, find out what licenses and permits you need from the state and city, and apply for them. Finally, find out what other ongoing requirements are required and register for state and city taxes.
Once you have completed the above, you are almost ready to begin your commercial activities. Don’t forget to open a separate bank account and get a business credit card. These two steps are vital to distinguish between your personal assets and income from those of your business and help you build business credit. Now that you know the key factors for starting your business, you are ready to incorporate and get your business off the ground.