Is My Business a Sole Proprietorship or an LLC?
When I was talking to my insurance agent, one of the requirements from them was that I establish my newly found business in Texas. First of all, was my business a Sole Proprietorship or an LLC (Limited Liability Corporation). In doing the research, becoming an LLC is a lot more detailed in the legal matter of things so I would pretty much need a lawyer. Plus, in the state of Texas the fee to file as an LLC is $300. This doesn’t count the legal costs of hiring the lawyer either. Becoming a Sole Proprietorship is alot simpler at this early time in my business.
After deciding on becoming a Sole Proprietorship I then had to think of a name for my business. I’ve pretty much done this already since I’ve created my website and had business cards printed. Since my company name is Danni Irene Generational Imaging (DIGI Photography) I needed to register it as a DBA (Doing Business As) in the state of Texas. This approach required a little of my time and the fee of $25. Also, since it is a Sole Proprietorship I didn’t have to register the name with the Secretary of State.
Then Do I Need An Assumed Name Certificate (DBA)?
Now, if I named my company after my legal name, I wouldn’t need to register it as a DBA. But, since I’m putting in the word photography, or imaging, I have to register it as a DBA (Doing Business As). The steps in doing this is quite simple and my county (Tarrant) pretty much walks you through it on their website and their FAQ page is very helpful. Another great place for information on forming a business in the state of Texas is the Secretary of State Website. And one more great place for information was sba.com for the state of Texas.
The first thing I needed to do was to decide on a name. But I’ve mistakenly done this already as I’ve stated earlier. I’ll find this out when I search my company name in the Texas Secretary of State (SOS) database. In order to do this you’ll need to set up an account with the SOS at SOSDirect which is a service which will become handy later on if you want to become an LLC or other incorporation. You will need to put a credit card on file with the SOS when setting up the account (according to them this is the best practice) and they will charge you $1 per name search.
While doing the search with the SOS, I found out that my first choice of DIGI Photography was too close to another business name in the state. Well, I don’t want to have my business name to be similar to any other business especially in my state. So, I did another search for Danni Irene Generational Imaging and it came up “clean”. I did one more search for my blog’s name, Danni Irene, in case I create it as a business also.
For now I’ve decided to do business in Tarrant County, and I can branch out from there. Since registering with a county is fairly simple and quick. If I want to do business in a different county, I would have to file there also. I also needed to search the Tarrant County database for my business name at no extra cost. Also, their website offers helpful information on how to go about filling out and filing an Assumed Name Certificate (or DBA).
Since my business is a Sole Proprietorship I chose the Assumed Name Certificate for an unincorporated business or profession form. If I chose to have my business as an LLC I’d still have to file an Assumed Name Certificate (or DBA) but on the incorporated form. You can find the form here, and it’s pretty self explanatory. Of course this information is for Tarrant County Texas, but I’m sure the other counties in Texas are very similar.
Since I am filing as an unincorporated entity I had to appear in person at the county courthouse downtown Ft Worth, or at one of the many Tarrant County sub-courthouse locations. By what I understand on the website, if you are filing incorporated you can mail in your application. Just follow the directions on their website. And finally pay the fee of $20. The clerk will give you in return your receipt, the form you gave to them signed, sealed and stamped as filed, and your Certificate of Assumed Name. Keep these forms in a secure location, like a fire proof safe.
My business, Danni Irene Generational Imaging is now a legal business in Tarrant County and as a Sole Proprietorship in the State of Texas. Next is to get my EIN (Employee Identification Number) from the IRS. By what I’ve read, this is fairly simple to do online and free of charge. It wouldn’t hurt to get one for business and banking needs.
Wow, this is coming along pretty good so far, and even though I’ve done a lot of reading these past few weeks. I’m feeling more confident in my business knowledge for the state I’m in. What websites have been helpful for you in forming your business? What have you chosen for your business model and why? Let us know in the comments below!
Remember to enjoy life, enjoy the day and to always take lots of photos!