Note: New business owners should always seek the guidance of a professional tax consultant, accountant, and/or attorney to verify all legal requirements are met before operating a business. A little effort now can save you a lot later!
Step 1: Determining Your Business Structure
The first step in starting a business is to decide on a basic legal structure. This step is important because financial and legal implications vary depending on legal structure. Once you settle on a legal structure, you will need to properly record the business name with the state and/or county. In the State of Texas, there are several legal options for setting up your business structure. Given the legal implications when choosing your business structure, new business owners should always seek the guidance of a professional tax consultant, accountant, and/or attorney to verify all legal requirements are met before choosing a business structure. The Lawyer Referral Service of Central Texas provides resources for entrepreneurs seeking legal advice. The optional legal business structures in the State of Texas are as follows:
Legal Business Structures in the State of Texas
Registered Limited Liability Partnership
Limited Liability Company
Where to file?
Once your research is complete and you have consulted with a legal professional, the following information will guide you to the appropriate local or state agency to file the required paperwork for the business structure you have selected.
Sole Proprietorship - Assumed Name, Doing Business As (DBA)
In Austin, you would file your paperwork for your Assumed Name, Doing Business As (DBA) at the Travis County Clerk's Office. A DBA ensures the business name you plan to use is not being used by someone else in Travis County. The Assumed Name is good for 10 years unless changes are made. Travis County charges a fee of $13.00 plus $0.50 for each name on the form, including the business name and each owner's name. Fees are payable by cash, cashier’s check, or money order. No checks are accepted. If processing via mail, send the forms by certified mail with a return receipt requested to verify receipt by the county clerk. Please consult the Travis County Clerk's Office as prices and procedures are subject to change without notice.
Partnerships, Limited Liability Companies and Corporation
In the State of Texas, all partnerships, limited liability companies and corporations are all filed thru the Office of the Texas Secretary of State. Please review their website for information regarding these types of business filings. For general information and specific filing questions, you may also contact them directly at 512-463-5586.
Step 2: Federal, State, Austin and Employment Tax Responsibilities
An equally important step in the development of your business is your determine and comply with the various overlapping tax responsibilities of your new business. The following information will guide you to the appropriate Federal, State and Austin agencies who administer business taxes.
The Internal Revenue Service (IRS) governs all things related to tax collection at the federal level. In addition, the IRS provides a wealth of business tax related information for small business owners. Simply click on the link below and you will soon be on your way to understand your federal tax responsibilities.
The local IRS Tax Payer Assistance Center provides walk in face-to-face assistance. The center is located at 825 East Rundberg Lane, Austin, TX 78753. The center can be reached directly at 512-499-5127.
The Texas Comptroller of Public Accounts is responsible for the administration and collection of state and local sales tax for businesses operating in the State of Texas. The following link provides an informative guide that will educate you on the what, when, where, why and how of sales and franchise taxes.
111 East 17th Street Austin, Texas 78711 512-463-4600 or 800-252-5555
Locally, business taxes apply to entrepreneurs who own tangible property and use their property to produce income. The Travis County Appraisal District (TCAD) handles the administration of the property tax for the City of Austin. For specific information, the link below will help clarify any questions and for additional information, contact TCAD directly at the number listed below.
8314 Cross Park Drive Austin, Texas 78754 512-834-9317
Internal Revenue Service - This link provides specific information regarding your federal employment tax responsibilities.
Texas Workforce Commission - This link provides specific information regarding your state and local employment tax responsibilities.
Step 3: Business Licenses and Permits by Business Type
According to Texas Wide Open for Business, the State of Texas does not require a general "business" license; however, there are a number of regulatory agencies that have licensing and permitting requirements based on the type of service, or products associated with your business. To ensure that all permitting requirements are met, you should contact the local county and/or city government in which you plan to conduct business to determine if there are any additional requirements. To determine state occupational licensing and permitting requirements, please visit the Texas Department of Licensing and Regulation (TDLR), specifically the TDLR Licensed Programs tab, for more information.
Texas Wide Open for Business section on employer requirements is a one stop shop for small business owners. The information provided will help entrepreneurs understand and comply with federal and state employer requirements. There are a number of labor, safety, and reporting laws relating to employment of personnel, thus it is vitally important for small business owners to increase their knowledge and ensure they are in compliance. Click here for more information.
Additionally, the Texas Workforce Commission publishes a great resource for employers. The Especially for Texas Employers is a step by step guide that walks employers and employees thru every aspect of Texas employment law.
Small Business Resources, Information and Referral
To provide support as your navigate thru the four business development steps, SBDP prides itself on providing resources and providing information on resources to assist you in the development of your business.
BizAid Business Orientation is a great no-cost opportunity provided by SBDP to meet with business professionals who can provide you with basic information and guidance to ensure your new small business can soar. The material covers: Personal Preparation, Research and Focus, Determining Structure, Building a Business Plan, and Execution.
Directories of Organizations Helpful to Small Businesses
SBDP serves as a clearinghouse of information to directly help business owners or refer them to the other resources. The following five directories contain over 200 local organizations that collectively offer a wide range of services and resources geared towards small business development.
BizAid℠ Coaching provides no-cost, personalized coaching to Austin based businesses on the development of business and marketing plans, or on personal credit assessments, finding loan sources, completing out loan applications, and financial management assistance. Entrepreneurs interested in this wonderful resource must first attend a no cost BizAid Business Orientation. Generally held every Tuesday, registration is available online at AustinSmallBiz.com, or by calling 512-974-7800.
In a one-stop-shop setting similar to that of a library, the BSC offers use of computer equipment, high-speed internet access, as well as several online databases, which are: infoUSA - conduct market research with a database of over 14 million commercial and residential contacts Plan Write - business plan writing software BizMiner - industry financial profiles and reports Business-in-a-Box - over 1400 templates essential for day-to-day business including non-compete agreements, vendor agreements, financial statements, and many other commonly used business documents B2G Market - connects you to government bid opportunities for your product or service DemographicsNow - U.S.. Census Bureau information and data used for researching specific areas for business location and customer identification LoopNet - an online database which assists in locating commercial real estate property for sale or for lease The BSC also provides access to copiers, CD burners, fax machines, printers and a scanner. We also have a vast collection of written entrepreneurial materials that may help with determining the best avenue to establish and grow a business. The BSC also offers free notary services. City of Austin staff is on site to help Monday – Friday, 8:30 AM-4:30 PM at One Texas Center, 505 Barton Springs Road. Bring a USB drive to take data with you. For more information call 512-974-7786 Location Assistance LoopNet – Database of current real estate for sale or for lease in the Austin area. LoopNet can be accessed in the City of Austin’s Business Solutions Center at 505 Barton Springs Road. Open 8:30 AM – 4:30 PM, Monday – Friday No appointment necessary On site assistance Bring a USB drive to take data with you 512-974-7786
Many small business owners are unaware of the rules and regulations that are involved in opening up a business with a physical location. This process can be quite extensive or short depending on the individual business proposal and property location. BizOpen exists to assist in navigating this process in two ways. First, the BizOpen Orientation is a free class that covers the general development process, including zoning, permitting, inspections, and the certificate of occupancy. Second, BizOpen one-on-one coaching will provide a guide through the development process that caters to your specific needs. Your one-on-one coaches will also be there to attend meetings with you and assist through any challenges you may come across during this process. To get started, sign up for the BizOpen Orientation.
Access to Capital
Beginning in 2001, City of Austin has hosted Meet the Lender℠, a business loan fair, to assist you in finding a small business friendly lender. Click here to access a roster of attending lenders you can contact at any time for lending assistance.
Classroom education on a wide range of relevant small business topics is available at a low cost. Taught by The University of Texas Professional Development Program, these classes can really help the small business owner become better prepared for the day-to-day management of a business. Participants who complete any six classes will receive a Small Business Success Skills Certificate. Review the current class schedule and register here. A complete list of upcoming classes and events is provided at SBDP Calendar & Class Registration.
Small Businesses Health Insurance
TexHealth is a community-based nonprofit created by and for Central Texas businesses offering a low-cost health benefits program in Travis, Burnet, Hays, and Williamson counties. For more information, go to texhealthct.org.
Workers’ compensation is a state-regulated insurance system that provides covered employees with income and medical benefits if they are injured on the job or have a work-related injury or illness. Except in cases of gross negligence, workers’ compensation insurance limits an employer’s liability if an employee brings suit against the employer for damages. In Texas private employers can choose whether or not to carry workers’ compensation insurance coverage. Visit Texas Department of Insurance for more info.
The City’s Minority-Owned Business Enterprises (MBE) and Women-Owned Business Enterprise (WBE) program is intended to promote and encourage MBEs and WBEs to participate in business opportunities with the City of Austin; to afford MBEs and WBEs an equal opportunity to compete for work on City contracts; and to encourage contractors to provide subcontracting opportunities to certified MBEs and WBEs by soliciting such firms for subcontracting opportunities.
Contingent on MBE and/or WBE certification approval, you may also be eligible for State of Texas Historically Underutilized Business (HUB) certification if proof of citizenship or naturalization and a Federal Tax Identification number are provided. Please note: HUB certificate is issued directly by the State of Texas HUB-Link.
The U.S. Small Business Administration provides statewide assistance for new and existing businesses needing assistance with federal programs. The centers provide counseling, training and financial assistance for businesses in Texas. Small Business Development Centers are located throughout the state. Click the heading above to find a center nearest you.