Many business owners jump into the competitive marketplace without doing enough research when it comes to covering their legal bases. Don’t start a business without first thoroughly preparing yourself.
Starting a business is exciting—but without a solid legal foundation, that excitement can quickly turn into costly mistakes. From choosing the right business structure to obtaining proper licenses, understanding your legal obligations from day one can mean the difference between long-term success and preventable setbacks.
At Burk Law Firm, P.C., we’ve been guiding Austin entrepreneurs through business formation and commercial law since 1992. Here’s what you need to know before launching your venture.
Choose the Right Business Structure
One of the most critical decisions you’ll make is selecting your business entity type. Your choice affects everything from personal liability protection to how you’ll pay taxes.
Common business structures include:
Sole Proprietorship – The simplest structure, but offers no liability protection
Partnership – Shared ownership with shared liability risks
Limited Liability Company (LLC) – Combines liability protection with flexible taxation
Corporation – Offers the strongest liability shield but involves more regulatory requirements
Each structure has distinct advantages depending on your goals, the number of owners, and your plans for raising capital. An experienced business attorney can help you evaluate which entity type best protects your interests.
Register Your Business Properly
Once you’ve chosen your structure, you’ll need to formally register your business. In Texas, sole proprietorships and partnerships typically file a DBA (doing business as) or assumed name certificate with the county clerk. LLCs and corporations must file formation documents with the Texas Secretary of State.
Key registration steps include:
Filing Articles of Organization (LLC) or Certificate of Formation (corporation)
Appointing a registered agent for service of process
Obtaining a Federal Employer Identification Number (EIN) from the IRS
Registering with the Texas Comptroller for state tax purposes
Obtain Necessary Business Licenses and Permits
While Texas doesn’t require a general state business license, many industries require specific permits, certifications, or registrations at the federal, state, and local levels. Depending on your business type and location, you may need zoning approval, health permits, professional licenses, or industry-specific certifications.
Failing to secure proper licensing can result in fines, forced closure, or legal liability—so research your requirements thoroughly before opening your doors.
Create Essential Legal Documents
Handshake deals might feel friendly, but they often lead to costly disputes down the road. Protect your business with properly drafted legal documents from the start.
Essential documents for most businesses include:
Operating Agreement (LLC) or Bylaws (Corporation) – Outlines ownership percentages, management structure, and decision-making procedures
Shareholder or Partnership Agreements – Defines rights, responsibilities, and exit strategies
Contracts – For vendors, customers, employees, and independent contractors
Non-Disclosure and Non-Compete Agreements – Protects your confidential information and competitive advantage
Understand Your Federal Compliance Obligations
Starting in 2024, the Corporate Transparency Act requires most small businesses to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). Businesses formed in 2025 or later must file within 30 days of formation. Non-compliance can result in significant civil and criminal penalties.
Additionally, if you plan to hire employees, you’ll need to comply with federal employment laws, tax withholding requirements, and workplace safety regulations.
Protect Your Intellectual Property
Your business name, logo, products, and proprietary processes may be valuable assets worth protecting. Consider:
Trademark registration for your brand name and logo
Copyright protection for original creative works
Trade secret policies to safeguard confidential business information
In Austin’s competitive tech and creative economy, intellectual property disputes are increasingly common. Protecting your IP early is far less expensive than fighting infringement later.
Why Working with a Business Lawyer Matters
Navigating legal requirements on your own is possible—but risky. An experienced business attorney helps you avoid common pitfalls, structure your business for growth, and create contracts that actually protect you.
At Burk Law Firm, P.C., we take a strategic approach to business formation and counseling. We’ve helped countless Austin entrepreneurs and Texas business owners build strong legal foundations—from startup formation to complex commercial transactions.
Start Your Business the Right Way
Don’t let legal oversights derail your entrepreneurial dreams. Taking time to address your legal requirements upfront saves money, reduces risk, and positions your business for success.
Ready to start your business on solid legal ground? Contact Burk Law Firm, P.C. today at (512) 306-9828 or visit burklaw.com to schedule a consultation.
Burk Law Firm, P.C. has been serving Austin and Texas businesses since 1992. We specialize in business law, commercial litigation, business formation, contract disputes, and startup counseling.