Posted by: Sep 17, 2022

Starting your ain concern is an exciting venture.

Only before yous go too far along, you'll want to figure out what type of business organization entity is right for you.

There are a number of business entities to choose from.

For case, you lot might consider forming a limited liability company (LLC), corporation, or partnership, amid others. Each has diverse advantages and disadvantages.

1 popular pick for entrepreneurs and new businesses is the sole proprietorship. If you lot've decided that a sole proprietorship is a expert fit for your concern and are wondering how to fix upward a sole proprietorship in Texas, you're in the correct place.

Founding attorney Adam Curley has all-encompassing experience helping concern clients through a variety of legal matters, including concern entity formation.

Use our guide below to learn more well-nigh how to start a sole proprietorship in Texas. If you lot have questions or are set to move forrard with the formation procedure, requite The Curley Police force Firm a call today.

Starting a Sole Proprietorship in Texas: An Overview

Then, what exactly is a sole proprietorship?

Sole proprietorships are a very popular entity choice for many new business organization owners. In fact, sole proprietorships are the most common business organisation entity in Texas.

A primary reason for their popularity is that they are relatively simple to form in comparison to other entity types such every bit LLCs and corporations.

Ready to larn more about how to start a sole proprietorship in Texas? Here's what you need to know.

Steps to First a Sole Proprietorship in Texas

To create certain entity types, you must formally register the business organisation with the State of Texas. Withal, registering a sole proprietorship in Texas is not necessary to legally operate your business.

Rather, a single individual can engage in business organization activities without whatever formal arrangement. In doing then, a sole proprietorship is created.

Nevertheless, there are still certain steps you lot should take to ensure that your business is able to operate legally and effectively:

  1. Select a business organization name, if something other than your private legal name;
  2. Check with the Texas Secretarial assistant of Land to verify whether your desired business organization name is available;
  3. If available, reserve your preferred name through the Texas SOSDirect website to ensure that nobody takes it while yous get everything else squared abroad;
  4. File an causeless name document in the appropriate county or counties inside the state;
  5. Depending on the goods or services yous intend to provide in the course of your business organization, brand sure you get whatsoever necessary licenses or permits that you need to operate;
  6. While not ever necessary, consider obtaining an employer identification number (EIN) from the IRS;
  7. Open business bank accounts; and
  8. Obtain business concern liability insurance to amend protect yourself from potential lawsuits and debts in the time to come.

Of course, no two sole proprietorships are exactly the same. Thus, how to get-go a sole proprietorship in Texas may wait a little unlike from business to business organisation.

If you lot have questions about your sole proprietorship and the steps you lot need to take, contact The Curley Law Business firm to discuss your business organisation with an experienced business law attorney.

Pros and Cons of a Texas Sole Proprietorship

As with whatever business conclusion, there are certain pros and cons of setting your business up as a sole proprietorship.

Some advantages include:

  • Ease of formation,
  • No initial filing fees,
  • Ability to file one single revenue enhancement return for both business and personal income, and
  • Sole ownership and command over the business.

While these can exist great advantages, it'due south important to recall that there are potential disadvantages as well.

One of the biggest cons of forming a sole proprietorship is the lack of personal liability protection.

A sole proprietorship is not considered to be a split legal entity from the individual owner. Unlike other entity types that offer personal liability protection for business owners, as a sole proprietor you will be personally liable for any debts and liabilities of the business concern.

This means that in the consequence that your sole proprietorship is unable to pay its bills or is sued, creditors will be able to come up after y'all and your personal assets directly.

Nevertheless, a sole proprietorship may notwithstanding be a great pick for your new and growing business. But if you do proceed as a sole proprietorship, make sure to obtain concern liability insurance to aid protect yourself.

Important Information to Know When Setting up a Sole Proprietorship in Texas

Every bit discussed above, in that location is no formal document that you need to file with the State of Texas to create your sole proprietorship. However, y'all may still need to file some paperwork depending on your circumstances.

For example, if the business is conducted under an causeless name, besides chosen a DBA or "doing business as," you must file an assumed proper noun certificate. For a sole proprietorship, an assumed name is whatever name other than your ain.

Your causeless name certificate must be filed with the office of the county clerk in the canton in which your concern premise is located.

If you don't take any business premise, you must file an assumed proper noun document in all counties within the state in which you conduct business organization under that assumed name.

For more than helpful information on what you need to know in starting a sole proprietorship in Texas, give our team a call.

Yet Have Questions Almost How to Form a Sole Proprietorship in Texas?

Setting upwards a sole proprietorship in Texas may be i of the simplest ways to beginning a business. But that doesn't necessarily mean that it's like shooting fish in a barrel.

At The Curley Law Firm, we've been helping business clients for over a decade. From entity formation to business litigation, nosotros've seen merely about everything.

Ready to get started on setting up your Texas sole proprietorship? Contact us today to see what we can practise for you.