When you start a new business, the business entity you choose can have an impact whether your venture fails or succeeds and your own personal liability for business debts. In addition, if choosing an inappropriate entity does not result in failure, it can certainly cause significant problems that could have been avoidable. Because so much is on the line, it is important for anyone who is considering starting a business to speak with an experienced attorney as soon as they can.

What are my Options?

Texas law provides entrepreneurs from a variety of business entity options from which to choose, some of which are described below.

  • Sole Proprietorships You may have a sole proprietorship and not even know it. Requiring no formal filings, a sole proprietorship exists when a person goes into business as an individual – think of a private music teacher or a handyman, for example. While easy to create, this business entity provides no protection from personal liability for business debts.
  • Partnerships – Partnerships exists when two or more people decide to go into business together to make a profit. Similar to sole proprietorships, there are no formal filing requirements associated with forming a partnership – and a court may even find that one existed even if you did not mean to form one. Partnerships also do not protect members from personal liability for business debts.
  • Limited Liability Companies – Limited Liability Companies, or LLCs, combine the flexibility of partnerships with the liability protection of a corporation. The filing requirements are significantly less strenuous than a corporation’s, however, and you can elect pass-through taxation if it is right for you.
  • Corporations If you want to sell stock and have investors, you should likely incorporate your business. This requires significant filings with the state – both initially and on an annual basis. You will also need to have a Board of Directors, executives, and other designated roles to operate the corporation and comply with many laws and rules.1 While this may seem like a lot to manage, incorporation can breed success in many situations.

These are very general descriptions and an experienced business attorney can help you carefully weigh your options.

Call a Houston Business Lawyer Today to Discuss Your Legal Questions

If you are an entrepreneur who is considering starting a business by yourself or with others, you should discuss your situation with an attorney as soon as you can. Choosing the right business entity can protect you from personal liability and help ensure that your business is structured in a way that will allow meeting your goals. To schedule a consultation with one of our lawyers, call Weisblatt Law today at 713-666-1981 or send us an email through our online contact form.


Houston Business Contracts Attorney

Attorney Andrew Weisblatt

Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio