Opening a new business in the state of Texas is not so difficult with the resources and help available to new business owners. Texas is friendly to startups and obtaining the necessary forms and licenses, including a Texas resale certificate, is easy.
This step-by-step guide to owning a business in the Lone Star State will walk you through the process and help you get started in the fastest and most effective way. Let’s begin!
Step 1: Choose a Way to Structure Your Business
This sounds complicated, but it is a choice that should be based on how many people are financially invested in this business and how much they want to limit their financial responsibility for its debts.
You will choose between these options, all likely to require a resale tax certificate in Texas:
- DBA Business. This stands for “Doing Business As” and is a business name registered with the state as associated with an individual or partners who have chosen this name to identify their new operation. The individuals involved are still responsible for the debts of the business and its liabilities in the event of a lawsuit.
- Incorporation. When you file a form called articles of incorporation, it creates an independent entity with a structure that may have officers, directors, and/or shareholders. This business structure protects the owners from personal responsibility for the debts of the corporation.
- LLC Company. An LLC or “Limited Liability Company” is a separate business entity, but it is designed to protect smaller business owners from claims related to the normal operation of their business. This structure is among the most popular choices for small start-up companies in Texas and around the country.
Step 2: Choosing a Legal Name for Your Business
This step should take place before you write a business plan or apply for a Texas sales tax resale certificate. Consider these tips when choosing a legal name for your business:
- Choose a name that describes what your business does while being easy to spell and remember.
- Avoid using words that might quickly become dated like video or hip hop.
- Search the web to make sure the name you want to use is not already in use by another business.
- Check with the U.S. Patent and Trademark Office and the Texas Department of State Division of Corporations database for any trademarks or registered uses of your name.
Step 3: Register Your Business in Texas
Every state has its own laws for registering a business, but you can file articles of incorporation, S-corporation, or LLC forms easily using an online service to expedite the processing time. Mailing in forms for Texas sales and use tax resale certificate or a business name will take significantly longer.
The regulations you should be aware of include:
- Texas requires a registered agent who has a physical street address within the state.
- This address will be needed to apply for a Texas resale certificate.
- DBA forms are usually filed with the county where the business is headquartered.
- You may be able to apply for a Texas resale certificate form at the county level.
Step 4: Complete Financial and Tax Records Using Your Registered Name
There are a few more steps which are important to be fully registered as a business in the state of Texas:
- Obtaining an Employer Identification Number (optional for DBAs)
- Opening separate business accounts with banks and credit cards
- Obtaining specific business licenses and permits that vary by the type of business you open
- Registering with the Texas Comptroller for tax purposes