Starting a business involves more than filing paperwork, and the order you do things in matters. Choose a name before checking trademarks, or sign a lease before your company exists, and you may spend months undoing it.Here is the sequence we walk our clients through, with the legal decisions that come up at each step.

Step 1: Test the idea and write a simple plan

Before spending money on formation and branding, make sure the business can work. A plan doesn't need to be a 40-page document. It should answer who your customers are, what you'll charge, what it will cost to get started, and how long you can operate before turning a profit.From a legal standpoint, this is also the time to ask whether your industry is regulated. Health care, food service, alcohol, child care, financial services, and construction, among others, often require licenses or approvals that affect your timeline and startup costs.

Step 2: Choose a business structure

Your structure affects your personal liability, your taxes, and how easily you can bring in partners or investors. The most common options are:

• Sole proprietorship or general partnership. Simple to start, but the owners are personally responsible for the business's debts.
• Limited liability company (LLC). Flexible and popular with small businesses. It offers liability protection and several tax options.
• Corporation. Often preferred by businesses planning to raise outside investment or issue stock to employees.

Licensed professionals such as lawyers, physicians, and accountants may face extra rules about which entity types they can use. Tax treatment is a separate choice from legal structure. An LLC, for example, can elect to be taxed as an S corporation, so involve your accountant in this decision too.

Step 3: Choose a name, and make sure you can use it

A name being available at the Secretary of State only means no other entity in that state is registered under it. It doesn't mean you can use it as a brand. Another business may already hold trademark rights to the same or a confusingly similar name.Before committing, run a trademark clearance search, check domain names and social media handles, and consider registering the trademark if the brand will be valuable. If you plan to operate under a name different from your entity's legal name, you'll generally need to file an assumed name ("DBA") certificate.

Step 4: Form the entity

In Texas, LLCs and corporations are created by filing a certificate of formation with the Secretary of State. You'll need to name a registered agent, a person or company with a Texas address who agrees to receive legal papers on the business's behalf.Form the entity before you sign a lease, open accounts, or take on customers. Contracts signed in your own name before the company exists can leave you personally responsible for them.

Step 5: Put the owners' agreement in writing

The state filing creates the company. The operating agreement (for an LLC) or bylaws and shareholder agreement (for a corporation) set the rules for how it runs. This is true even for a single-owner business, where the agreement helps show the company is separate from you.With more than one owner, the agreement should cover ownership percentages, who contributes what, how decisions are made, how deadlocks get resolved, and what happens when an owner leaves, becomes disabled, or dies. It's also the right moment to have each founder assign to the company any intellectual property they created for the business.

Step 6: Get an EIN and open a separate bank account

An Employer Identification Number (EIN) from the IRS is your business's federal tax ID. Most banks require one to open a business account, and you'll need it to hire employees. The IRS issues EINs free of charge.Once you have it, open a business bank account and run every business dollar through it. Keeping personal and business funds separate is one of the simplest ways to protect the liability shield your entity provides, and it makes bookkeeping and tax time far easier.

Step 7: Register for taxes and get your licenses and permits

Requirements depend on what you sell and where you operate. Common ones include:

• Sales and use tax permit from the Texas Comptroller, if you sell taxable goods or services
• Texas franchise tax registration and reporting, which applies to most LLCs and corporations
• Professional or occupational licenses for regulated fields
• City and county permits, such as certificates of occupancy, health permits, signage permits, and zoning approval for your location

Check zoning before you sign a lease. A space that isn't zoned for your use can stall your opening indefinitely.

Step 8: Get your contracts and insurance in place

Before you open, have the core documents ready:

• Commercial lease, reviewed for personal guarantees, pass-through costs, and assignment limits
• Customer agreements or terms of service that set out payment terms, scope of work, and limits on your liability
• Contractor and vendor agreements, including IP assignment and confidentiality terms
• Website privacy policy and terms of use, if you collect customer information online

Insurance is your second layer of protection. Depending on your business, consider general liability, professional liability, property, cyber, and commercial auto coverage. An entity protects your personal assets; insurance protects the business's.

Step 9: Prepare to hire, and stay compliant

Before bringing on your first team member, decide whether they'll be an employee or an independent contractor. That decision turns on how the work is actually done, not on the title you choose. Employees also bring payroll tax withholding, new-hire reporting, and Texas unemployment tax registration. Texas lets most private employers decide whether to carry workers' compensation coverage, but opting out has real legal consequences, so make that choice deliberately.Starting the business is a one-time event; staying in good standing is ongoing. Keep a calendar for franchise tax reports, license renewals, permit renewals, and registered agent updates. Missing state filings can result in your entity losing its good standing or being forfeited.

Build it right from the start

Every business is different, and the right order and details depend on your industry, your partners, and your plans for growth. Langer Law Group helps new business owners work through each of these steps so they can focus on running the business. 

This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Laws, fees, and filing requirements change over time, so consult an attorney about your specific situation.

Great products and hard work get a business off the ground. What keeps it growing is often less glamorous: clear agreements, clean finances, and problems handled before they become crises.These ten rules come from what we see in our practice, both in the businesses that thrive and in the ones that come to us after something has gone wrong.

Rule 1: Keep the business separate from you

Your company should have its own bank accounts, its own contracts, and its own records. Paying personal bills from the business account, or business bills from your personal card, blurs the line that protects your personal assets. It also makes your books harder for lenders, investors, and buyers to trust.Successful owners treat the business as a separate entity from the start, even when they own 100% of it.

Rule 2: If it matters, put it in writing

Handshake deals feel efficient until two people remember them differently. Partnerships, key customer relationships, vendor arrangements, and promises to employees all deserve written terms.A written agreement doesn't signal distrust. It makes sure everyone agrees on the same deal, and it gives you something to rely on when memories fade or people change.

Rule 3: Protect your brand and ideas early

As a business grows, its name, reputation, and know-how often become its most valuable assets. Clear your brand name before you invest in it, register trademarks worth protecting, and make sure everyone who creates work for you, including founders and contractors, signs it over to the company in writing.Protect confidential information too. Customer lists, pricing, and processes are easier to safeguard with confidentiality agreements than to recover after they walk out the door.

Rule 4: Never sign what you don't understand

Leases, loan documents, franchise agreements, and vendor contracts are usually written by the other side to protect the other side. Personal guarantees, automatic renewals, exclusivity clauses, and one-sided termination rights can follow a business for years.Read every contract before you sign it, ask about anything unclear, and remember that most terms are more negotiable than they look.

Rule 5: Know your numbers, and make sure you get paid

A business can be profitable on paper and still run out of cash. Track your cash flow, not just your revenue, and work with an accountant who understands your industry.Getting paid starts before the work does. Clear payment terms, deposits or retainers where appropriate, late-payment provisions, and a consistent collections process all reduce the chance of chasing unpaid invoices later.

Rule 6: Hire carefully, and document everything

Your people can be your greatest asset or your biggest source of risk. Classify workers correctly as employees or contractors, put expectations in writing, and keep consistent policies through an employee handbook.When problems come up, document them promptly and factually. A clear record of performance issues and how they were addressed is one of the best defenses if an employment decision is challenged later.

Rule 7: Make compliance a routine, not an emergency

Annual state reports, tax filings, license renewals, and permit deadlines are easy to forget when you're busy running the business. Missing them can cost you penalties, your good standing, or even the right to operate.Keep a compliance calendar, assign someone to own it, and review it every quarter. It's one of the least exciting habits on this list and one of the most valuable.

Rule 8: Plan for disputes before they happen

Every business eventually faces a disagreement with a customer, vendor, partner, or employee. The businesses that handle them best have already decided how disputes will be resolved: which state's law applies, where claims are heard, and whether mediation or arbitration comes first.When a dispute does arise, keep communications professional and in writing, preserve relevant records, and never ignore a demand letter or lawsuit. Early, measured responses usually cost far less than late ones.

Rule 9: Build a team of trusted advisors

No owner can be an expert in everything. The most successful businesses we work with lean on a small group of advisors: an attorney, an accountant, a banker, and an insurance professional who know the business and talk to each other.Bring them in early and keep them informed. An advisor who already understands your business can spot problems sooner and help you move faster when opportunities come up.

Rule 10: Plan your exit from day one

Whether you hope to sell the business, pass it to family, or bring in new partners, the time to plan is long before you're ready to leave. Buy-sell provisions, succession plans, and clean, well-organized records all make a business easier to value and transfer.A business that could be sold tomorrow, with clear contracts, documented processes, and no hidden liabilities, is usually also a business that runs better today.

Success is built on a strong foundation

No set of rules guarantees success, but a strong legal and financial foundation gives a good business room to grow. Langer Law Group works with business owners at every stage, from formation through growth and transition. This article is for general informational purposes only and is not legal advice. 

Reading it does not create an attorney-client relationship. Every business's situation is different, so consult an attorney about yours.