Multiple Sole Proprietorships in Texas
A sole proprietorship offers advantages over other types of business formations, because it requires less paperwork than a limited liability company or corporation. Starting a sole proprietorship in Texas is a straightforward process -- the limited requirements allow you to start transacting business in days instead of weeks or months. If you plan to start more than one business venture, you can establish multiple sole proprietorships in Texas.
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Obtaining an Employer Identification Number
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Before you start a sole proprietorship in Texas, you will need to apply for an Employer Identification Number with the Internal Revenue Service. The one exception to this is if you won't be hiring any employees. There is no cost involved with obtaining an EIN. You can apply for an EIN directly through the IRS website -- in most cases, you can obtain an EIN immediately after you complete your application. You do not need to have a separate EIN for each sole proprietorship you plan to operate in Texas.
Business Names
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If you plan to operate multiple sole proprietorship businesses, you will need to establish a name for each business. These names are known as assumed business names or "doing business as" names. You will need to register each business name with the county clerk in the county where you will conduct your business operations. Name registration requirements and fees vary by county.
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Taxes
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Regardless of how many sole proprietorships you operate in Texas, you will pay taxes on business income as personal taxes -- you will not have to file both personal and company taxes, so you can avoid the risk of double taxation associated with corporations and limited liability companies.
Considerations
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Although starting sole proprietorships in Texas allows you to avoid the cumbersome paperwork and tax-reporting requirements associated with other types of business formations, sole proprietorships also can pose disadvantages. You will be personally liable for the debts of your business. If one of your businesses fails, your creditors can seek recovery of your debt from your personal assets. In some cases, this may involve lawsuits, bank levies and liens against your real estate and personal property. However, Texas prohibits wage garnishment for most private debts, so if you have to get a job after your businesses fail, your wages are typically protected.
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