Practical, Step by Step Advice for Your Remote Texas Business

Recap: Attorney Elisabeth Fairbanks outlines the practical steps you should take when forming a Texas business without a physical location.

You can find plenty of attorneys who discuss business incorporation, contracts, and best practices, but practical step-by-step information about actually starting a business can be surprisingly hard to find. If you’re running a business from home or entirely online, Texas still requires you to meet certain legal and administrative requirements.

Here are six practical steps I recommend for starting a new business or legitimizing an existing one. These tips are for business owners who don’t have a permanent store or office location. Here’s how to set up a legitimate Texas business even if you work entirely online or from home.

1. Business Address

   The first practical step you should take is to obtain a mailing address in the state of Texas that is different from your home address. When you incorporate your business in Texas, you’ll be required to provide a business address, and Texas Secretary of State filings are public record. For safety and privacy purposes, you don’t want your personal address to be available to the public.

   
   

   Here are some options for getting a separate mailing address for your business:

   
   

   ·       United States Postal Service Post Office Box (P.O. Box)

   ·       Mailbox at a private business such as a UPS store

   ·       Co-working space that provides mail service

   
   

   While prices vary among these options, you’ll most likely find yourself paying anywhere from $20-$50 a month for this service.

   
   

   Pro Tip: make sure your mail service can accept delivery of things that have to be signed for, like certified mail.

   
   

2. Registered Agent

   Once you’ve obtained your new business mailing address, you need to find a registered agent. A registered agent can be an individual Texas resident or a company with a Texas address.

   
   

   A registered agent is someone who is available to be served in person if someone brings a lawsuit against your business. They must be physically present during business hours in order to accept such service. Texas law requires all incorporated entities to have a registered agent. Texas does not currently allow P.O. Boxes as a registered office address for a registered agent; it must be an actual, physical location.

   
   

   You can serve as your own registered agent, but if you don’t have a business location, you’ll have to use your home address. As discussed above, having your personal address in the public record is not ideal, so many remote business owners choose to hire a registered agent.

   
   

   Before you list someone as your registered agent, Texas law requires that they give written consent using Form 401-A; you don’t file this form with the state, but you should keep it with your business records.

   
   

   You can easily find companies with a quick Google search that provide registered agent services. Some of these companies also provide website hosting, online phone numbers, and mailbox services.

   
   

   Pro Tip: Professional registered agent services typically charge between $100 and $150 per year.

   
   

3. Operating Agreement

   Even if your business is small or solo-owned, having an Operating Agreement is an important step in creating legitimacy for your business. An Operating Agreement typically outlines ownership percentages, profit-sharing, how decisions are made, and what happens if an owner leaves or the business dissolves.

   
   

   Even if you’re the only owner, an Operating Agreement helps demonstrate the business is separate from you personally, which strengthens your liability protection. Additionally, if you seek a business loan, most lenders require an Operating Agreement to be in place.

   The Texas Secretary of State doesn’t require you to file your Operating Agreement, but you should keep it with your important business documents.

   
   

   An attorney can create a customized Operating Agreement. You can also find templates online.

   
   

4. Incorporation

   Once you’ve obtained a mailing address, secured a registered agent, and created an Operating Agreement, it’s finally time to officially incorporate your business with the state!

   There are several types of entities you can register in Texas, depending on your business and your goals:

   
   

   ·       LLC: flexible structure that protects your personal assets and is often best for small businesses

   ·       PLLC: used by licensed professionals like lawyers and doctors

   ·       Corporation (C-Corp or S-Corp): often used by larger businesses or those planning to have shareholders

   
   

   The Certificate of Formation is filed through the Texas Secretary of State’s SOSDirect portal. You’ll receive your Certificate of Filing once the Secretary of State approves your documents, usually within a few days.

   
   

   You may also need to file a Public Information Report (PIR) and annual Franchise Tax Report with the Texas Comptroller’s Office to keep your entity in good standing, even if your business doesn’t owe any tax.

   
   

   Filing incorporation paperwork with the state is also a service I provide as part of a business incorporation package.

   
   

   Filing fees for most Texas LLCs and PLLCs are currently around $300, paid directly to the Secretary of State.

   
   

   Pro Tip: Before filing, make sure your desired business name is available using the Secretary of State’s name search tool.

   
   

5. Federal EIN

   You must register your business with the federal government by obtaining an EIN. An EIN allows you to open bank accounts, file taxes, hire employees, and apply for business credit.

   
   

   You can obtain an EIN for free directly from the IRS. Be wary of third-party sites that charge unnecessary fees. I also obtain EINs for my clients as part of a business incorporation package.

   
   

6. Business Bank Account

   The final step in starting your business will be obtaining a business bank account. This is an important step to take to show that your business funds are separate from your personal funds. Creating a business account requires more than opening a simple personal account. A bank will require your Texas Certificate of Incorporation as well as proof of your federal EIN.

   
   

Final Notes

Once your business is up and running, you’ll also want to think about bookkeeping, local business permits, registering with the Texas Workforce Commission if you hire employees, and ensuring compliance with state sales tax through the Texas Comptroller’s Office.

Taking these steps helps ensure your remote business is legally compliant, financially sound, and ready to grow.