This article is part one of a two-part series focusing on selling your business.
A record number of small businesses continue to be sold in the United States. Fifty percent of all small business owners are over 50 years old, and it is estimated that over 70% of baby-boomer entrepreneurs will either close or sell their businesses in the next 10 years. Since millennials are looking for business opportunities, and interest rates are still relatively low, now is a good time to start strategizing about how to sell.
Many businesses choose to operate under an assumed name or a DBA, which is short for “doing business as.” This happens whenever a business operates under a name which is not identical to the official name of the entity filed with the Texas Secretary of State’s Office.
In some cases, buying a franchise can be a great alternative to starting your own business, particularly if you have limited experience running a business. The franchisor provides you with a developed way of doing business, trains you to run the business and provides ongoing guidance and assistance with operations, management and marketing matters.
However, buying a franchise does not guarantee success. You will still need to work hard, apply good management skills and serve your customers well.
The general perception is that it is expensive to work with an attorney. In an effort to save money, entrepreneurs try to handle legal matters and draft documents themselves. Often times, business owners wait until they are faced with a serious legal problem before hiring an attorney.
But legal services are a cost of doing business that may save your company money and help your business in the long run. Experienced counsel can help a small business spot and avoid legal issues before they develop into expensive problems.
Here are some examples of issues that could have been prevented by consulting a business attorney.
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Demand for commercial lease space in Texas continues to be strong. According to Commercial Loan Solutions:
On March 1, 2018, Bisnow Houston reported that Texas leads the nation in commercial real estate development for warehouse/flex, including e-commerce distribution, fulfillment facilities and retail real estate. It ranks second only to California in office development.
The requirements for each state are different, but businesses that operate in another state are generally required to register as a foreign entity in that state. The term “foreign entity” refers to any company that is formed in a different state than the state where the company is conducting business.
Your company is required to register in another state if the activities it conducts in that state are considered “transacting business” in that state. Generally, businesses are considered to be transacting business in the state if they hire employees or maintain an office, store, warehouse or facility in the state.
Changing your company’s business name is a difficult task. Some common reasons why you may want to change your business name include:
If you find yourself in this situation, here’s what you need to do:
The Texas franchise tax is a tax imposed on taxable entities organized in Texas or doing business in Texas. Even if your business does not owe taxes, it is required to file a Franchise Tax Report each year. The no-tax-due threshold for 2017 is $1,110,000 and increases in 2018 to $1,130,000.
You will be required to show that your business franchise taxes are current when you borrow money for your business, sell your business or terminate your business. If your company does not file its Franchise Tax Report and pay any applicable taxes it will no longer be in good standing, which means you could be held personally responsible for your business’s obligations. Be sure to discuss this matter with your CPA.
Here are few things to know about business taxes in the state of Texas:
In most cases, when people go into business together, they’re optimistic about their ability to work together and for the business to be successful. Unfortunately, it can be very difficult, time consuming and expensive to dissolve a business relationship.
It may be time to protect yourself from the risks faced by your business. Consider the following scenarios: