This week we are looking at Texas – the Lone Star State. As the saying goes, everything is bigger in Texas. The state has successfully accommodated changes in the economy and US consumption – though it was originally a cattle state, oil rich land and a strong infrastructure has turned the cowboy state into one of the economically diverse states in the USA. Incorporate in TexasIn their Best States for Business survey, Forbes ranked Texas at #7 with the state’s economic climate in first place and most analysts also expect Texas to see some serious growth in the next few years. If you’ve ever wanted to start a business, Texas is a great place to do it. But how hard is it to start a business, form an LLC, or incorporate in Texas?

What do you need to start a business in Texas?

Surprisingly little! Some states require sole proprietorships, which are the simplest type of business entity, to register before they do business. All Texas requires is that the sole-proprietorship’s owner file an ‘Assumed Name Certificate,’ also known as a ‘Doing Business As’ name, with the County Clerk. Depending on where you plan on doing business, and what sort of business you run, you may also need to file for a business license – the Small Business Administration has a handy tool to help new business owners figure out exactly what they need on that front!

How do you form an LLC or incorporate in Texas?

Texas requires all limited liability companies and corporations operating in the state to register before doing business. Businesses looking to incorporate in Texas should first conduct a name search and make sure their name isn’t already used by someone else in the state. The corporation’s name will have to include a designator, like ‘Co.’ or ‘Inc.’, as well. Once that is done, you file a Certificate of Formation For-Profit Corporation. This form will ask for your business’s name, address, registered agent information, industry, the names and addresses of the board of directors and corporate organizers, and how many shares the new corporation is authorized to issue. You’ll also need to file for an Employer Identification Number (Federal Tax ID), and pay a fee.

The process to form an LLC in very similar to how you incorporate in Texas. You still need a designator in your LLC’s name – like ‘Limited’ or ‘LLC’ – and you have to file a Certificate of Formation with the Secretary of State. Again, this form asks for the LLC’s name, address, the names and addresses of the organizers and members, and its registered agent information. If your LLC has more than one member, or you want it taxed as a corporation, you’ll need to file for an EIN as well.

Is Texas small-business friendly?

Extremely – Texas’ friendly reputation is well earned! Texas received A’s across the board on Thumbtack’s Small Business Friendliness Survey, and the state’s government actively tries to foster a business-friendly atmosphere. Though a little dated looking, the state’s “Wide Open for Business” site is chock-full of useful information on tax incentives, business programs, and networking opportunities.

Thinking about trying to make it big in the Lone Star State? Need help forming an LLC or incorporating in Texas? Just leave a comment below, or give us a call at 1 (877) 692-6772!

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