Is it time for you to set up a Texas business?
The Lone Star State has created one of the most pro-business climates in the world. For example, there’s no state personal income tax. To the extent there are other costs, they’re typically lower than most other states.
In fact, Texas is one of the few states where the Governor spends a lot of time poaching businesses from other states, convincing them to relocate because of the many economic opportunities available here.
How does Texas’ economic climate compare to other states?
And, of course, there are significant advantages for your company when half of the national economic growth is in Texas and the remaining half is split between the other 49 states.
For example, over 130,000 Californians have fled to Texas in the past two years seeking a place they can live and prosper, that rewards work rather than punishes it.
Did you know that Texas now exports more technology than California does?
Now, whether you live in the Lone Star State or elsewhere, maybe it’s time for you to take advantage of Texas business opportunities like so many other entrepreneurs.
So how do you set up a Texas business?
Typically you’ll want to speak with a qualified lawyer who understands Texas business law (e.g. business contracts) as well as Internet law.
By the way, this can take place via a telephone appointment rather than face-to-face. During your consultation, you’ll be able to determine the type of business structure and tax structure that makes the most sense for your unique needs.
Filing the Certificate of Formation with the Texas Secretary of State
Whether you’ve chosen a Texas limited liability company (LLC) or a Texas corporation, your Texas business lawyer can file the Certificate of Formation for your entity. If everything is okay, the Texas Secretary of State will issue a Certificate of Filing for your approved new entity in just a couple of days.
What about U.S. federal and Texas state business taxes?
For the federal government, you’ll want to apply for a Taxpayer Identification Number (TIN), which is usually an Employer Identification Number (EIN). This can be done online at the IRS’s website. You may also elect in some instances to have your entity taxed by the federal government as a Subchapter S corporation.
You can also apply online for a Texas sales tax permit at the State Comptroller’s website. After formation of your Texas corporation or limited liability company, the Comptroller’s office will also mail you information about state franchise taxes. Many small business owners pay little or no franchise taxes.
Should you set up a Wyoming, Nevada, Delaware, or other business entity instead?
It depends.
Did you know that many times this is mistakenly done by entrepreneurs who have been sold on false tax or privacy advantages of forming an business entity in one of these other states?
As a practical matter, unless you’re actually running your business in that state, there’s a big risk that the so-called advantage is in reality a legal danger when you fail to observe the required formalities.
Now, naturally, this can include getting hit with back taxes and penalties from the state where the entity should have been formed or at least registered to do business, and the potential that a court will disregard the entity’s shield and hold you personally liable in a lawsuit.
Whether you’re tired of being penalized for doing business from one of the lesser 49 states, or are in another country but looking to own a business in the United States, there’s never been a better time for forming a Texas business entity.
So, if you’re ready to set up a Texas company, it’s time to schedule a telephone consultation with Texas Internet Business Lawyer Mike Young.
