Texas Small Business Law Guide — Formation, Contracts & Compliance
Business formation, licensing, contracts, tax obligations, and regulatory compliance for small businesses in Texas.
Starting a business means navigating a series of legal requirements — entity formation, state registrations, tax obligations, employment law, and contracts — each governed by different statutes and agencies. Getting the legal foundation right from the start protects your personal assets, keeps you in compliance, and prevents disputes that are far more expensive to fix later. Below is the general sequence from formation through ongoing operations, with the decision points that matter most.
Business Entity Types
| Filing Fee | Key Features | |
|---|---|---|
| LLC | $300[Texas SoS] | Limited liability, flexible management, pass-through taxation |
| Corporation | $300[Texas SoS] | Formal structure, stock issuance, double taxation (unless S-corp) |
| Sole Proprietorship | No state filing | Simplest, no liability protection |
| Partnership | Varies | Shared management, personal liability (unless LP/LLP) |
Key Requirements in Texas
Tax Structure
No state income tax; franchise (margin) tax on businesses with revenue over $2.47 million (Tex. Tax Code § 171.001); sales and use tax (6.25% state rate); pass-through for LLCs.
Resolving Business Disputes
Texas Business Courts — established 2024, specialized courts handling complex business disputes including derivative actions, mergers, and internal governance matters. Small claims court in Texas handles disputes up to $20,000 §27.031.
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Frequently Asked Questions
General answers to common questions. Specific outcomes depend on your facts and timing.
If you have a deadline, court notice, or upcoming hearing, mention it when requesting assistance so timing can be evaluated promptly.