Dallas, Texas Business Law Attorneys
Options for Forming a New Business in Texas
- A sole proprietorship (i.e., doing business in your individual name)
- A general partnership or limited partnership
- A limited liability partnership (LLP)
- A limited liability company (LLC)
- A C-corporation or S-corporation
What are the Differences Between a Partnership, Corporation, and a Limited Liability Company?
There are entire books devoted to the differences between partnerships, corporations, limited liability companies, and other legal entity structures. However, for most businesses and individuals, the primary differences include:
- Liability Risk – General partners are exposed to personal liability, while limited partners, corporate shareholders, and LLC members enjoy limited liability. This means that – assuming the partnership, corporation, or LLC has been formed and managed properly – its owners will generally not be exposed to personal liability for the business’s debts.
- Income Tax – By default, partnerships, LLCs, and S-corporations are pass-through entities, meaning that the business’s income gets reported on its owners’ tax returns. In contrast, C-corporations are subject to corporate income tax (in addition to the personal income tax at the shareholder level). Which option is the most advantageous will depend upon a number of different factors that are unique to each individual business.
- Formalities and Flexibility – Generally speaking, partnerships and LLCs are subject to fewer formalities than corporations. LLCs also generally offer a greater level of flexibility when it comes to structuring ownership and control. However, corporations can offer greater flexibility with regard to shareholders’ rights.
- Transferability of Shares – If one of your goals is to build a business you can sell, this should factor into your choice of entity, as well.
What Types of Clients Do We Serve?
Our clients range from individual entrepreneurs to Fortune 500 companies. Our experience includes working with a variety of different businesses and industries including:
- Construction companies
- Franchise opportunities
- Law firms, financial services firms, and other professional services entities
- Manufacturing companies
- Personal investment companies
- Tire companies
- Real estate investors and brokerages
Why Should I Hire a Business Law Attorney to Form My New Business Entity?
While there are a number of self-help options available online, it is strongly advisable to hire a business attorney to form your new business entity. There is much more involved in the process than simply filing out a form, paying a filing fee, and you will need an experienced attorney who can help you prepare all of the necessary documentation (including a partnership, shareholder, or operating agreement).
Are you thinking about or in the process of starting a new business in Texas? When starting a new business, the first step is to establish and properly organize a new business entity. Each type of entity has its own unique benefits and limitations. Parvin Law Group’s experienced business attorneys will advise you on the tax, liability, funding, transferability, and other considerations involved to set your business up for success from the start.