For any small business owner, keeping a fledgling company afloat for that first year is often a daunting task. But the job can get even tougher if you find yourself staring down penalties and fines from the government for failing to file the right forms.
That’s why it is crucial to take the paperwork seriously and make sure everything’s in order before you open your doors. Texas Wide Open for Business, the official brand of the Texas Economic Development Division of the governor’s office, is an excellent resource that takes burgeoning business owners through the administrative basics in four simple steps.
The first step in starting a business is to determine your legal structure (sole proprietorship, corporation, LLC, etc.), which will affect the liability and tax obligations you face. Once you settle on a structure, you must register with the Secretary of State by filing the appropriate form for the structure you chose. If you plan to operate your business under a different name than the designation that appears on your registration form, you’re also required to file an Assumed Name Certificate, both with the Secretary of State and the county clerk’s office in every county in which the business will operate.
At the state level, the Texas Comptroller of Public Accounts lists more than 60 business taxes and fees that it collects, from general sales tax to more specific assessments like a cement-production tax. Obviously, only some of these will apply to your business, but it’s a good idea to get in touch with the comptroller’s office to find out which ones do. And though Texas doesn’t have a personal income tax, businesses are often subject to a franchise tax through the comptroller’s office, though there are a few exemptions. New businesses also must register for the state unemployment tax via the Texas Workforce Commission, which you can do for free online.
You’ll need to go through the IRS to register for an Employer Identification Number and to determine whether your business is subject to specific federal income, employment, and excise taxes. Lastly, check with your local appraisal district to see if any business-related property needs to be reported on a rendition form.
Though Texas doesn’t require a general business license, you may need to obtain special permits depending on the city in which you plan to do business and the industry you plan to enter. Because requirements vary city to city, getting in touch with city and county officials where your business is located is the best way to determine which permits you’ll need.
Also, you may be required to get a license to work legally in certain specialized industries — everything from massage therapists to funeral directors to bingo retailers — which are listed on the Texas state website
Lastly, Texas Wide Open for Business runs down a list of other regulations that new businesses must comply with, including the Americans with Disabilities Act, the Texas Drug-Free Workplace Initiative, and various equal employment requirements. Typically, these don’t involve any initial paperwork on your end, but as a new business owner who will have to conform to these policies, it’s worth the effort to get familiar with them.