Setting up a business can be a risky venture but also rewarding as well depending on how well you plan and prepare. And to the benefit of small start-ups Texas has a very start-up friendly ambiance. In fact, the economy of the state is heavily reliant on small businesses. 2.2 million small businesses are currently thriving in the great state of Texas making it one of the largest home grown business states in the union.
A number of factors come into the favor of those starting up a business in Texas. First of all, the demography is extremely favorable. There is considerable local demand for any product or service in the highly populated state. Simultaneously, skilled work force is abundantly available. The reasonable cost of living adds to the economic favourability of Texas.
The governmental policies are designed to enhance the growth of small business. Low tax, predictable regulatory environment make the attitude of Texas very welcoming towards entrepreneurs. “Texas Wide Open for Business” is a government initiative to assist small businesses in the setting up phase.
Minority-owned Business Enterprise and Women-owned Business Enterprise are two other government initiatives to promote entrepreneurship among the minority and womenfolk. There are 725,000 women and minority owned small businesses in the state.
The legal procedure of starting up a business is not very cumbersome in Texas.
The first step is deciding on a business structure and choosing a name for the company. Legal business structure in Texas are of the following types:
- Sole Proprietorship
- General Partnership
- Limited Partnership
- Registered Limited Liability Partnership
- Limited Liability Company
A location needs to be determined for setting up the office.
In sole proprietorship, the business needs to be filed with an assumed name at the County Clerk’s Office. It is ensured that the chosen name of the company is unique in the County. The assumed name holds good for ten years.
In other cases, the filing takes place through the office of Texas Secretary State
Next, the tax responsibilities need to be determined on the federal, state, and, local level. This step is very crucial. The governing bodies of the federal and state tax are International Revenue Service, Texas Comptroller of Public Accounts, respectively. In case of Austin, the local tax governing body is Travis County Appraisal District. To understand the tax related laws, refer to the guidelines of these organizations.
It is advised that entrepreneurs seek the advice’s of a professional tax consultant, for any assistance.
Procurement of legal authorization comes next in the list. In this start up friendly state, no “general” business license is required. But based on the type of product or service being sold by the company, it might need to possess some legal documents of certain controlling agencies. Texas Department of Licensing and Regulation can provide help in this regard.
Solicit the advice of an attorney to determine which licenses, permits, certifications, registrations or authorizations are necessary, in federal, state and local level.
After deciding on the employer requirements in federal and state level, follow the proper legal procedure while recruiting them. A thorough knowledge of the labor, safety and reporting laws guiding employment of a personnel is essential.
The Texas Work Force Commission dictates the information regarding state and local employment tax responsibilities. For the federal level, International Revenue Service is the governing organization.
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