business formation lawyers

Are you looking to start a business in Texas? Congratulations! With a thriving business community, favorable business climate, and a large consumer base, Texas is one of the best states in the country to launch a new venture.

But before you can start doing business, you’ll first need to choose your business structure and undertake some basic business set-up procedures that will be much easier with the help of a trusted business formation attorney. 

You can read more about business formation below. If you have any questions, please contact our Waco business formation lawyers online or call (254) 252-3590.

Business Formation Overview 

As you prepare to start your Texas business, consider all the tasks you will need to complete to get your business formed.

A business formation lawyer can help you handle all those tasks. Some main items you will need to handle include:

  • Selecting a name for your business;
  • Choosing a business entity type;
  • Preparing and filing formation documents with the Texas Secretary of State;
  • Drafting company bylaws, an operating agreement, or a partnership agreement, depending on which type of business entity you decide to operate;
  • Securing licenses and insurance for your business; and
  • Obtaining state and federal tax identification numbers.

While this may sound like a lot to consider, working with trusted business formation lawyers can make your business formation to-do list seem like a breeze.

Types of Business Entities Available in Texas

There are several types of business structures available in Texas, each with its own advantages and disadvantages. Our business law attorneys will walk you through all the pros and cons of each type of entity.

We will also help you choose the one that is right for you so that you are confident that you have set yourself up for success.

Sole Proprietorship

A sole proprietorship is the simplest type of business structure. In a sole proprietorship, there is no legal distinction between the individual and the business, and the owner is personally liable for all debts and obligations of the business.


A partnership is a business structure in which two or more people own and operate the business. There are two types of partnerships, general partnerships and limited partnerships.

In a general partnership, all partners share equally in the profits and losses of the business and are personally liable for all debts and obligations.

In a limited partnership, there are both general partners who manage the business and limited partners who contribute capital but have limited liability for the debts and obligations of the business.

Limited Liability Company (LLC)

An LLC is a flexible business structure that combines the liability protection of a corporation with the tax benefits of a partnership.

Owners are called members, and they have limited liability for the debts and obligations of the business. The profits and losses of the business are passed through to the members’ personal tax returns.


A corporation is a separate legal entity that is owned by shareholders. The corporation is responsible for its own debts and obligations, and the shareholders have limited liability for the debts and obligations of the business.

The profits of a corporation are generally taxed separately from the shareholders’ personal income.

Professional Corporation

A professional corporation is a type of organization that is formed for professionals such as doctors, lawyers, and accountants. It provides liability protection for its owners while allowing them to maintain their professional licenses.

Nonprofit Corporation

A nonprofit corporation is a type of organization that is formed for charitable, religious, educational, or scientific purposes. It is exempt from paying federal income tax and may also be exempt from state sales and property taxes.

Next Steps for Entrepreneurs

Once you have selected your business entity type, there are only a few more steps to undertake before you can get your business fully up and running.

Registering Your Business with the State

Once you’ve decided on a business entity type, you will need to register your business with the state.

To do so, you will need to file a Certificate of Formation containing information about your business, including a name that is unique and distinguishable from other businesses registered in Texas, with the Texas Secretary of State.

Permits and Licensing Issues

Depending on the type of business you’re starting, you may need to obtain permits and licenses from the state or local government.

For example, if you’re starting a restaurant, you’ll need to obtain a food service permit from the Texas Department of State Health Services.

If you’re unsure about what permits and licenses you need, you can contact the Texas Department of Licensing and Regulation or the Small Business Development Center for guidance.

Business Succession Planning

At The Zimmerman Law Firm, we can also help you when you are ready to enter the next stage of your business. When you have taken your company as far as you want to go, we can help you sell your business or transfer it to the next generation.

We recommend you start this process early and develop an effective business succession plan early in your business lifecycle. 

New Beneficial Ownership Rules for Texas Businesses (2024)

Owning a business in Texas just got more complex. The Corporate Transparency Act (CTA), enacted by Congress in 2021, requires many companies to disclose who ultimately controls them. Here’s what you need to know to stay compliant.

What Is the Corporate Transparency Act?

The CTA is a federal law combating money laundering, terrorist financing, and other financial crimes. A key component is requiring certain businesses to report information about their beneficial owners.

Who’s a Beneficial Owner?

According to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), a beneficial owner is anyone who:

  • Owns or controls at least 25% of the voting rights;
  • Holds more than 25% of the financial interest; or
  • Has the power to make crucial decisions regarding the company’s management or finances.

Identifying beneficial owners helps increase transparency and accountability within businesses. By requiring firms to report this information, authorities can more effectively monitor and investigate suspicious activities involving hidden ownership or control.

Does My Texas Business Need to Report?

Not all Texas businesses fall under the CTA’s reporting umbrella.

Reporting Company

For businesses that are considered reporting companies, the following deadlines apply:

  • Formed After January 1, 2024—new companies generally have 90 days from their formation date to file a report with FinCEN; and
  • Existing Before January 1, 2024—existing companies must file their initial report by January 1, 2025.

Failure to report when required can result in civil and criminal penalties, including fines up to two years imprisonment.

Keeping Your Information Up-to-Date

It’s crucial to maintain accurate records. Businesses must update this information within 30 days of any changes to a beneficial owner’s reported information to avoid potential penalties for non-compliance.

Filing Made Easy

Reporting is conveniently conducted electronically through FinCEN’s Beneficial Ownership Information filing system.

Get in Touch with a Business Formation Lawyer in Waco Today

Starting a new business can be a complex process, but with the right guidance, it can be a rewarding venture.

The Zimmerman Law Firm boasts a deep bench of business lawyers and litigators, and we have offices throughout Texas.

We love being able to support people as they start their businesses to enrich their local communities, whether it be in McLennan and surrounding counties, or throughout the state.

If you’re ready to start your own business, contact The Zimmerman Law Firm online today or call (254) 252-3590.

Where You Can Find Our Waco, TX Office

Business Formation FAQ

How Do I Register My Business in Texas, and What Documents Do I Need to File?

To register your business in Texas, you will typically need to file a Certificate of Formation with the Texas Secretary of State.

What Are the Ongoing Compliance Requirements for Businesses in Texas?

Texas businesses must comply with various ongoing requirements, such as filing annual reports, maintaining registered agent information, and paying taxes and fees.

How Do I Choose a Business Name That Is Available and Complies with Texas Laws?

To choose a business name in Texas, you should check the availability of the name with the Secretary of State and make sure it complies with Texas laws regarding business names, such as avoiding prohibited words and being distinguishable from other business names.

What Are the Liability Risks Associated with Different Types of Business Entities in Texas?

Different types of business entities offer varying levels of liability protection for their owners. For example, corporations and LLCs generally offer limited liability protection, while sole proprietorship and general partnerships do not.

Can I Form a Texas Business if I Am Not a Resident of the State?

You do not need to be a Texas resident to form a business in Texas, but you may need to appoint a registered agent who is located in Texas to receive legal notices and documents on behalf of the business.

What Resources Are Available to Help Me Start and Grow My Texas Business?

Texas offers various resources and support services for entrepreneurs and small business owners, such as the Texas Small Business Development Center, the Texas Economic Development Corporation, and the Texas Workforce Commission.