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.
Work with an Experienced Business Formation Attorney
Birdsong and Armstrong, PC can provide you with the personal attention your business needs and deserves, with exceptional legal experience and a strong familiarity with business law.
Business Formation in Texas
The first hurdle is formation. The Texas secretary of state’s office has forms that satisfy the state requirements for filing a Certificate of Formation for nearly every type of entity. The problem is, that’s just the start. What about choosing a company name that complies with the secretary of state’s requirements? What about the Bylaws, the Operating Agreement, the Organizational Consent, the Partnership Agreement, internal management agreements and stock or LLC certificates? These documents are especially critical if there is more than one owner of a company.
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 regarding growth. Some of the Texas business entities that are potential options include:
- Sole proprietorship – Sole proprietorship involves a single individual engaging in some business operation and requires 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 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.
Establishing Your Business
There are many things to review when attempting to establish a new business entity. The formation of a new business should preferably be done with the assistance and legal advice from a Tyler business law attorney. With adequate legal counsel regarding your goals for your business, the correct type of business structure can be determined. Whether you are forming a partnership between two people, are a sole proprietor, or wish to establish a corporation, our firm can assist you with the appropriate legal structure. Depending on your type of business and the product or service you are producing, there can be a variety of business entities that will be right for you.
A small business owner working out of his/her home without employees may be able to establish a sole proprietorship as the best structure for that business. A somewhat larger business with employees and an office will wish to protect some of these assets through a corporation, either an S Corporation or a C Corporation. Both have certain functions that benefit the company, depending on your specific needs. There are also Limited Liability Companies (LLC) and Non Profit corporations that can be established.
Whatever your legal needs may be, we are here to help you meet them:
- Corporate record maintenance & compliance
- Employment agreements
- Document preparation
- Employee handbooks
Contact a Tyler corporate formation lawyer today to schedule your 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 Tyler corporate formation attorney prior to making any final decisions.
Determining the best legal strategy for the establishment of your business is best done with the advice of a professional. You can save yourself a considerable amount of money when your business is established correctly. We have the experience to provide you cost effective advice on setting up your business.
Our knowledge extends to matters concerning franchises, employee handbooks, and information concerning for profit corporations. We pride ourselves in personally representing every one of our clients and providing them with the degree of legal advice they require based on their needs.
To schedule a consultation with our attorneys, please click here.