Houston Corporate Formation Attorney
Helping Businesses with Every Aspect of Entity Formation
According to reports, Texas is in the top five states for startup activity and entrepreneurs in recent years. The choice of business entity is among the most important decisions facing a new business, and it 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 they may even create the business unintentionally. As a result, anyone who is considering creating a business entity must discuss their options with an attorney who knows the various options available under Texas law.
Houston business lawyer Andrew Weisblatt helps many business owners start from scratch or change the type of business they are already running. The Weisblatt Law Firm, PLLC works with companies of all types and sizes, from one-man operations to large corporations. Choosing and implementing the right corporate structure for your business is critical to its success. Call today to discuss your options regarding corporate formation and learn how we can assist you.
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, financing options, 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 their own must file an assumed name certificate with the office of the county clerk, however. Sole proprietors enjoy pass-through taxation and file as self-employed on their personal returns. Generally, sole proprietors are personally liable for all of their business debts and liabilities, as they are not separate legal entities from their business. This means that creditors or injured parties can come after a sole proprietor’s home or personal savings to satisfy a company debt. - Partnerships – A partnership involves two or more people engaging in business for profit, and also does not have any formal filing requirements. Like sole proprietorships, partnerships use pass-through taxation and 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. Management of corporations comes from boards of directors, and they are 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. However, corporate owners are often double-taxed.
- Limited Liability Companies – Limited Liability Companies (LLCs) are a popular type of business entity that owners are increasing selecting in recent years. An LLC combines the flexibility and taxation of a sole proprietorship or 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.
Some business entities require no formal steps for formation. Some require filing paperwork, and others require ongoing commitments to reporting, holding meetings, and abiding by corporate rules. In some cases, it the right decision to incorporate even though there are greater obligations to the state. For other owners, they can benefit more from the structure of an LLC and enjoy the less stringent filing requirements.
The Weisblatt Firm, PLLC will carefully review all of your available options for your corporate structure, including the possible benefits and drawbacks of each. We want your business to start off on the right foot, so we want to ensure your corporate structure provides all the necessary protections with no unnecessary burdens. Once you select the right entity type, we will ensure that you complete every step of the formation process. Whether you already have an entity in mind or have no idea which one is right for you, call today so we can start the conversation and begin the process of making your business dreams a reality.
The Formation Process
Selecting a business entity and filing the initial paperwork with the state are only the first steps in forming your business. While a business may exist on paper, it takes many additional steps to begin your operations in the best legal position. Some people simply begin operating, only to soon experience roadblocks or learn they face liability for noncompliance with all legal requirements. Business lawyer Andrew Weisblatt can ensure you cover all your bases so you are heading toward success from the very start.
Some legal services that are part of business formation for startups can include:
- Drafting operating agreements – Even though the SOS does not require every type of business entity to have an operating agreement on file (such as partnerships or LLCs), it is essential for any multi-owner enterprise to have a well negotiated and professionally drafted operating agreement. These contracts can eliminate disputes regarding management and finances, as well as serve as a road map for resolving any future disputes that may arise.
- Drafting buy-sell agreements – This is another important contract for multi-owner companies. This contract specifically addresses what will happen in the event that one business owner must give up their interests, such as in a divorce, bankruptcy, retirement, or death. This agreement helps protect the integrity of the business ownership while minimizing operational interruptions.
- Obtaining permits and licenses – Many businesses need certain permits and licenses before they can begin operations. This is especially true if you have a bricks-and-mortar location, as you will likely need zoning and land use permits. Food service companies will need health permits, and many professionals require special licenses before they can work in a particular field. We can help you identify any necessary permits and licenses you need.
- Purchasing insurance policies – Companies should have the necessary insurance coverage for their specific operations. This may include policies for professional liability, property insurance, home-based businesses, product liability, company vehicles, workers’ compensation, business interruptions, and general liability insurance. When you have the right insurance, a mishap or hiccup will not mean putting your company on the line.
- Capital and financing – The business entity you choose should take your financing goals into consideration. If you want to sell ownership shares for funding, you will need to form a corporation. Angel investors typically focus on C corporations, as well. Other financing methods may be suitable for LLCs or partnerships, including business loans, informal loans, grants, peer-to-peer lending, and more.
- Intellectual property protections – Many owners build businesses around a particular product or software. In these situations, you want to ensure that you obtain patents (or at least provisional patents) to protect your ideas and inventions. Furthermore, as you build your brand, you want your business to be identifiable by its name, logo, slogan, or other branding tools. While you can have minimal trademark protections automatically, you can obtain greater ownership rights by registering your trademark. You also want to consider whether your company has any trade secrets or whether you should have certain parties sign non-disclosure agreements (NDAs).
- Developing company policies – If you plan to have employees or even have multiple owners, it is a good idea to develop and implement company policies. Policies can address many, many different issues, including hours of work, conduct codes, anti-discrimination and harassment, disciplinary action, benefits, compensation, and more.
Each business will have its own path to begin operations, and corporate formation is a vital part of this process. Many people fail to start their business because they do not know where to begin, despite having a brilliant idea. Allow The Weisblatt firm to help guide your startup to success.
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 the overall 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 business attorney before making any final decisions.
It is also important to form your business with the guidance of a knowledgeable business lawyer. Each entity has its own requirements and you do not want to risk difficulties with the Secretary of State in the first weeks or months of operations. Our law firm regularly walks clients through the entire process of corporate formation, ensuring compliance each step of the way.
To schedule a free consultation with attorney Andrew Weisblatt, call The Weisblatt Law Firm, PLLC, today at (713) 666-1981 or send us an email through our online contact form available
Client Testimonial
”I’m so glad that I found Mr. Weisblatt and his team! He was knowledgeable and helpful and he took the time to answer all my concerns in detailed and informative manner.! They helped me when I was lost and really didn’t know what to do. He is honest, compassionate, and a caring attorney. He has an amazing staff you can tell love working for him. It’s great to find a lawyer that really cares about his clients and his employees. I highly recommend them to my friends and family.” – Zeze Ander (Google Review)
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