1. Sole Proprietorship

-How it works: One person owns and runs the business.

-Liability: The owner is personally responsible for all debts and taxes.

-Best for: Small, low-risk businesses or freelancers.

2. Partnership

-How it works: Two or more people share ownership and profits.

-Liability: Partners are personally responsible for business debts (unless it’s a limited partnership).

-Best for: Businesses started by two or more co-owners.

3. Limited Liability Company (LLC)

-How it works: Combines the flexibility of a sole proprietorship with the legal protection of a corporation.

-Liability: Owners (“members”) aren’t personally responsible for most debts.

-Best for: Small to medium businesses wanting legal protection without corporate complexity.

4. Corporation (C-Corp)

-How it works: A separate legal entity owned by shareholders.

-Liability: Owners are protected from personal liability.

-Taxes: Pays corporate taxes separately from owners.

-Best for: Larger companies or those seeking investors.

5. S Corporation (S-Corp)

-How it works: A corporation that allows profits and losses to pass through to owners’ personal tax returns.

-Liability: Same limited liability as a C-Corp.

-Best for: Small to medium businesses wanting tax benefits and liability protection.

6. Nonprofit Organization

-How it works: Operates for charitable, educational, or religious purposes rather than profit.

-Liability: Protected like a corporation.

-Taxes: Can qualify for tax-exempt status (e.g., 501(c)(3)).

-Best for: Charities, ministries, and community organizations.

7. Cooperative (Co-op)

-How it works: Owned and operated by the people who use its services.

-Liability: Shared among members.

-Best for: Groups pooling resources for mutual benefit (e.g., farmers, credit unions).

A DBA stands for “Doing Business As.”

It’s a name a business uses that’s different from its legal name.

In simple terms:
👉 A DBA lets you operate under a trade name without creating a new legal entity.

For example:
If “John Smith Media LLC” wants to run a training program called “JS Content Camp,” it can register “JS Content Camp” as a DBA.

A Registered Agent is a person or company officially designated to receive legal documents, tax notices, and government correspondence on behalf of a business.

In simple terms:
👉 They make sure your business doesn’t miss important paperwork from the state or IRS.

Most states require every LLC or corporation to have one, and the agent must have a physical address in the state where the business is registered.

An EIN stands for Employer Identification Number.

It’s a nine-digit number issued by the IRS to identify your business for tax and banking purposes—like a Social Security Number, but for your company.

In simple terms:
👉 You need an EIN to open a business bank account, hire employees, and file business taxes.

In Texas, starting a business as an LLC costs a minimum of $300—that’s the filing fee for the Certificate of Formation with the Texas Secretary of State.

Other possible costs include:

Registered Agent: Free if you serve as your own, or typically $50–$300 per year for a professional service.

DBA (Doing Business As): Around $25 if you want to use a trade name.

Optional add-ons: You may also pay for expedited processing, name reservation, or legal and formation help if you prefer to have professionals handle the paperwork.

Most entrepreneurs in Texas spend between $325 and $650 to officially get their business started, depending on which services they choose.

🔥 Spark Tip: The Spark Room offers Business Booster Bundles to save you money so you can start making money right away! We can also walk you through every step from checking name availability to filing your LLC and getting your EIN all in one streamlined process.