Helping businesses with every aspect of entity formation
The choice of business entity is among the most important decisions facing a new business and can have significant implications, ranging from tax issues to exposure to personal liability. There a number of business entities from which to choose in Texas, all of which have different benefits and drawbacks. Additionally, while some business entities require significant legal formalities to create and manage, others may exist without filing documentation with the state and may even be created unintentionally. As a result, it is important for anyone who is considering creating a business entity to discuss their options with an attorney who is familiar with the various options available under state law.
Texas businesses have various options
The type of business entity that best suits your situation depends on a variety of factors, including the type of business you wish to open, the number of people involved, whether or not you plan on issuing securities, and long-term plans in terms of growth. Some of the Texas business entities that are potential options include:
- Sole proprietorships – Sole proprietorships involve a single individual engaging in some type of business operation and require no formal organization. A sole proprietor who is doing business under a name other than his or her own must file an assumed name certificate with the office of the county clerk, however. Generally, sole proprietors are personally liable for all of their business debts.
- Partnerships – A partnership involves two or more people engaging in business for profit, and also does have any formal filing requirements. Like sole proprietorships, partnerships do not provide their members with any protection from personal liability for business debts.
- Corporations – A corporation is a legal entity that is distinct from its owners and is created by filing a certificate of formation with the Texas Secretary of State. Corporations are managed by its directors and owned by their shareholders. One of the main benefits of conducting business through a corporation is that the corporation will generally shield its owners from personal liability for business debts.
- Limited Liability Companies – Often referred to as LLCs, Limited Liability Companies are a relatively new type of business entity that combines the flexibility of a partnership with the liability protections afforded by a corporation. Like a corporation, an LLC is created by filing a certificate of formation with the state.
Contact a Houston corporate formation lawyer today to schedule a free consultation
The choice of business entity is an extremely important decision that can have a significant impact on the day-to-day operations and success of a business venture. As a result, it is important that anyone who is in the process of making this important decision discuss their options with an experienced Houston corporate formation attorney prior to making any final decisions. To schedule a free consultation with attorney Andrew Weisblatt, call The Weisblatt Law Firm, LLC today at 713-666-1981 or send us an email through our online contact form available here.