Texas veterans who are entrepreneurs- Post 2
Since creating my business, I have acquired some knowledge regarding being a business owner as a US Military Veteran while living in Texas.
It’s been quite an awesome process to get my business started, and I just wanted to share some tidbit information if you’re a Veteran that lives in the state of Texas-interested in becoming a legal business owner. You don’t have to be a native to the state but you need to have residency established before any of this can apply to you if you decide to use this information.. I personally am from Arizona, but moved to Texas when I left the Marines.
Also the following information is for someone in the position of having a business already that isn’t legally recognized, someone who wants to make their hobby into a business, or anyone who has more than JUST the business idea. Meaning, if you’re legitimately wanting/ready to create a legally recognized business then information could be helpful. I went the route of becoming a Limited Liability Company (LLC), so this information will be more oriented toward that as opposed to Corporation or Sole Proprietor. Otherwise, you’ll probably want to move on to the next blog post.
If you’re wanting to make your company “legally recognized” (IN TEXAS) you have to go through the Secretary of State website for filing. You can also use their website to track your status once you officially filed everything and are in your waiting period.
You have to pay the SOS (Secretary of State) a fee to create your business legally, its $300. LUCKILY one of the benefits of being in Texas as a Veteran is that it’s FREEEEEEEE to create your legal business. The registration fee is waived. When I found that out, that was a huge hurdle for me that I didn’t have to jump and scramble for, and stress lifted. Now you don’t NEED to be registered with the state as a business to conduct business, but I would recommend it. It can give you a lot of benefit to creating business credit, and legal protection of your assets being that your legal entity would be separate from anything personal. Business credit is different and completely separate from personal credit/financials.
So now that you know you can register your business for free, its also good to know you can get a EID for free! When creating your business you cannot have it without a tax ID, or EID -Employer ID-, think of it as a business social. You utilize this for when you file your taxes for your business. To attain one is extremely easy and you will need one when filing a legal business entity. Simply google search “how to get an eid”, or “eid application” and the results will pop up with BUT WAIT THERE’S MORE!
As a Veteran in Texas when registering your business, your initial 5 years in business is EXEMPT from state franchise tax! How amazing is that?? Granted there are still some details you have to report in, but in general your first 5 years is not subject to franchise tax and that is something HUGE!
I see this as a big plus because if you’re someone who needs extra help with taxes and numbers, it can give you some time to make yourself super familiar. This will lead to minimal mistakes, or no mistakes on your taxes and rolling into everything with confidence. That is if you are not hiring an accountant or someone to help you file your taxes. We all know taxes can be confusing so it’s definitely nice to have that time to retain what you need know.
The SOS Website has all the directions, and everything laid out that you need in order to get your business legally acknowledged. You’ll first have to prove you’re a Veteran by providing a document that states your legal service. There are other options listed but I used the “Form 4” of my DD-214. Once that’s sent in its a couple of weeks turnaround for them to give you an official letter from the Texas Veteran Commission. The letter essentially says you are in fact a veteran and gives you a code that you have to use later. YOU CAN ONLY GET THIS CODE FROM THIS SPECIFIC LETTER. After you file your documents needed and add this code to the application/paperwork it will be 13-15 BUSINESS DAYS (or up to 3 weeks) for your LLC (or whichever you applied for) to comes back approved. If you file, it correctly and follow the instructions then you should not have any issues or for the SOS to give you back a rejected application. HOWEVER, it is important to note that if you filed incorrectly, or your application was rejected, they will state specifically why in their response letter. So -like me- if you have/had to re-file, you will know what steps to take to fix the error and resubmit.
If you decide you’re ready to take yourself to the next level when it comes to your business as a Veteran-in Texas-, you get exempt from 5 years franchise tax initially, void/waived $300 fee, and it takes less than a month. On top of that they have PDFs that list very specific directions so filing itself is really easy. AND ON TOP OF THAT, your EIN is free too.
Attached below is the link for Texas SOS website regarding everything I just mentioned. The second link is the IRS Application to get an Employer ID/Tax ID. I hope this was helpful for anyone who might have been in my shoes at one point!
Business Information for Veterans (state.tx.us)
Apply for an Employer Identification Number (EIN) Online | Internal Revenue Service (irs.gov)
~The Beatnik Vet