From the Desk of Your Virtual CFO
Topic: Creating Your Business Entity – Texas
After you have created your Business Plan, and you confidently know that your vision for your business will be successful, how do you start on the path to true Entrepreneurship? It’s time to create your business entity.
How To Start a Business in Texas – Creating Your Business Entity – Part 2
Create your Business Entity
- Get your business financing arranged. Talk to several bankers and check the feasibility of any needed business loans based on your Business Plan (see previous Topic). Obtain the needed financing as you complete the following steps. (Start this process first, because without the necessary financing as outlined by your Business Plan you are going nowhere.)
- Consult attorney – Have him/her help you decide on the business entity type and set up your business. TIPS: An LLC entity-type works for most small businesses. For you DIY’ers who are already arguing about whether or not you need an attorney, and for you green entrepreneurs who haven’t yet had a litigation experience, you can ‘Pay now or pay later.’ Yes, you can DIY, but you have a lot of other things to do, and this allows you to establish a relationship with your business attorney. Don’t get the cheapest hot shot attorney who secretly doesn’t care if the company agreement is well written because he makes a lot more and it is a lot more interesting defending you, rather than crafting well written corporate documents to begin with. Ask your CPA for a referral if you don’t already know of a good business attorney.
- Get your EIN from the IRS: www.irs.gov. TIPS: Say ‘no’ to as many questions as possible. ‘No,’ I don’t have employees. ‘No,’ I won’t be starting my business anytime soon. ‘No,’ I am not subject to excise tax, etc. Once you go into business and have employees or these activities, you can always start these tax filings. The problem arises when you say ‘yes’ to these questions and the IRS starts looking for filings before you have even opened for business. Saying ‘no’ allows for contingencies and uncertainties. You will still need to file everything required, and file on time.
- Your Business now exists. Congratulations!!
Next: Isn’t there more paperwork that I have to do?