How to Register a Company in Texas?

Texas is ranked as the second most densely populated state of US with a lot of small businesses. It is summoned as the best startup place in America.

Setting up a Business in Texas

Once you have decided on your business idea and the required funding, setting up a business in Texas involves following a number of steps listed below.

Finalize the type of business structure

For setting up a business, it is the first requirement to decide on the type of structure your business will have. In Texas, the business structure to choose from is DBA (Doing Business as), Corporation or a Limited Liability Company (LLC).

A DBA is more like a sole proprietorship. In a DBA the owner is personally liable for all the liabilities of the business. It is only that the business runs under a name that is different from the owner.

An LLC is less formalized than a corporation but it is an entity separate from its owners, and thus the owner is not held liable for any of its debts.

A corporation is a separate business entity with proper formalized structure and governance. The owner is not responsible for the liabilities of the business.

Decide a name for the business

The name should be carefully decided as there are legal and business issues associated with the name of the business. Though the name could be changed later if required, it again involves a whole lot of procedure. For a good business, the name should be unique. Also make sure that the name complies with the trademarks to avoid future conflicts, for this purpose one could get assistance from US Patent and Trademark Office. Finally, the name should be available in Texas’s Department of State: Division of Corporations business name database.

Registering Company

For the particular purpose, each state has its own requirements but for Texas, below steps are to be complied with

  1. To register a business hire a registered professional agent (an entity or a person who is to receive documents on behalf of the company).
  2. Submit articles of association/incorporation in the Texas division of corporations.
  3. Formulate a shareholder agreement, and an LLC has to make an operating agreement.
  4. In case of corporations, each shareholder is to be given the shareholder certificate, and the member of the LLC is to be given the membership certificate.

Employer Identification Number (EIN)

The next most significant action after registering a business is to get an EIN. The particular number is unique for every business and serves as its identity.

Open Company Bank accounts

Next up is the opening a bank account for the efficient management of personal and business funds.

Get a permit or License to run the business

Once you have registered your company, you should go on to obtain a license to run your business. This is actually a sort of permit that will allow you to smoothly run your operations in Texas.

Setting up a business for a Non-Resident

Any person living around the world can set up and get his business registered, however, that particular person cannot actively manage his business from the US until and unless he has a work visa. Therefore for anyone willing to get his business registered in Texas along with managing it by living there a work visa is prerequisite provided he is not a US resident. Failure to do so may result in legal action against the person.

Fee for Registering Company in Texas

The fee charged for registration differs depending on the state where the business is being registered. Moreover, within the same state, the fee for registration will vary depending on the type of business structure the person chooses to adopt. For instance, a profit earning corporation will have to a filing fee of $300 in order to file the certificate of formation whereas for a non-profit organization a fee of $25 applies for the same. Besides this fee, there are various types of the fee that one might have to pay depending on the procedural requirements.

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