Houston has very specific laws for business activities in the city. Every company and business has to abide by those laws in order to operate. Any violation of the laws will have very serious consequences. So, if you are planning to start a business in this city, make sure you follow the business laws given below to avoid any charges against the activities of your company:
1. Registration of the business name
Your first course of action will be to register the name of the business. It can be a sole proprietorship business or general partnership or you may be in a general partnership doing business under another name that is different from the owner. Whatever you decide to do, you need to register the name first before going into any further paperwork. If you will be running a sole proprietorship or partnership under a different name, you need to get a DBA Certificate or Doing Business As Certificate.
2. Sales Tax Permit
The Texas Sales & Use Tax permit is a must for any business operating in Houston. It has to be obtained from the Texas State Comptroller Office. The good thing about this permit is that you don’t have to pay any fees to get it. However, you may have to post a security bond, depending on the business that you will be conducting. Additionally, there might also be a Franchise Tax if you have taken the franchise of any brand. This is a privilege tax on companies that are conducting business activities for a bigger company outside Texas.
3. Federal Tax Identification Number
This is an Employer Identification Number that is equally important as the business registration name. The EIN is used to check the tax accounts of all the business owners and also businesses that don’t have any employees but operating in Houston. You will not have to pay any fees to get the EIN but it is important that you start your business activities after obtaining this number so that all your purchases and sales can be identified and the tax calculated accordingly.
4. State Sales Tax Permit
This will be valid if you are starting a real estate business in Houston, Texas. There will be 6.25% tax levied on the sale of any personal property. You will have to get a Sales Tax Permit if you are involved in the buying, selling, or renting any property or any products or services that come under this tax bracket. Companies that are registered as a corporation will have to pay an additional Franchise Tax. There are hefty fines if you are found guilty of operating without a Sales Tax Permit. You may have to pay up to $500 per day for the number of days you have operated without the required permit for the business activities.
Now that you know the business laws in Houston, make sure you consult with a business lawyer so that he/she can guide you with all the necessary paperwork and documentation to start the business.