Legal Requirment for Starting a Business in Austin, TX?


I am starting a business from my home, and will operate it as a sole proprietor. What do I need before I can begin?

The business itself is a computer consulting firm meant to help small-medium businesses use (or move to) Open Source software. This includes things like email servers, firewalls/routers, etc...

So far I have:

  • PO Box
  • DBA

  • FEIN
  • Sales Tax Permit
  • Separate Bank Account

Is there anything I am missing, or that I erroneously included?

Edit: I will not have any employees, at least not for the foreseeable future...

Legal Tax

asked Sep 3 '11 at 11:19
Kevin Soviero
180 points
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2 Answers


You should draw up some contracts to be used between you and your clients. It's not technically a legal requirement, but you'll learn pretty quickly that working without a contract isn't something that you want to do.

answered Sep 3 '11 at 15:41
Virtuosi Media
1,232 points
  • I do plan to use contracts... – Kevin Soviero 13 years ago


I would question the choice of a sole proprietorship--the exposure that comes with it just makes me nervous! Even though the LLC is a little more hassle, it has the double bonus of limiting liability and appearing more professional to potential clients.

If you haven't already, you should look into small business expenses and tax deductions before you start. You can save a surprising amount of money if you know what's out there. Plus being aware of everything has the added value of helping you maintain discipline when it comes to separating business and personal expenses.

Not a legal thing, but still worthwhile: you should also take some time to research grants for small/home businesses that may be available in your state. Most of the opportunities here in NC revolve around 'green' businesses or generating jobs in rural areas, but you may find something you can take advantage of.

answered Sep 4 '11 at 05:53
1,156 points
  • How hard is it to operate as an LLC vs a DBA? Specifically I heard that you set an income for yourself, but I have no way of knowing what my income will be... – Kevin Soviero 13 years ago
  • By default, it shouldn't really be much: Taxes still pass through to be reported on your personal income statement, unless you elect otherwise. It gives you flexibility and protection, without all the paperwork hassle of a corporation. My last endeavor was an S Corp, but I plan to go LLC for my next. – Alex 13 years ago
  • My understanding is you can either pay yourself a salary or distribute dividends to shareholders (this case, just you). I'm not sure if they bring about different tax consequences though. – Alex 13 years ago

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