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.
Step 1: BizAid Business Orientation
A great first step for you is to attend our BizAid Business Orientation in class or online. This free class serves as an introduction to resources available to small business owners as well as the various government agencies or organizations that you may need to reach out to along the way. It will get you introduced to the components of a business plan and various aspects of business development. This class would be beneficial as you begin to outline your business goals, whether you’re starting a new business or looking to expand.
- One-on-one, No-cost, and Confidential
- Business Plan Review & Development Assistance
- Marketing Plan Review & Development Assistance
- Financial Readiness Assessment
- Business Management Technical Assistance
- For-profit business located within the Austin city limits
- Non-profit or located outside Austin city limits, limited to 6 hours
Step 2: Determining Your Business Structure
This step is important because financial and legal implications vary depending on legal structure. Once you settle on a legal structure, 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.
Legal Business Structures in the State of Texas:
- Sole Proprietorship
- General Partnership
- Limited Partnership
- Registered Limited Liability Partnership
- Limited Liability Company
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. Complete the Assumed Name Records Certificate of Ownership for Unincorporated Business or Profession Form.
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.
Step 3: Federal, State, Austin and Employment Tax Responsibilities
An equally important step in the development of your business is you 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 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.
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.
Internal Revenue Service - Provides specific information regarding your federal employment tax responsibilities.
Texas Workforce Commission - Provides specific information regarding your state and local employment tax responsibilities.
Step 4: 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.
BizOpen: Commercial Property Requirements
BizOpen serves as a point of contact for small business owners seeking assistance navigating the City’s development process. 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.
Step 5: Business Employer Requirements
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. 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 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. Visit 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
Search and locate helpful resources in this comprehensive directory of non-profit agencies, local, state, and federal governments.
- Small Business Certifications (MBE/WBE/HUB) - 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.
- State of Texas Historically Underutilized Business (HUB) - 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.