Business Formation Attorneys
Hiring a business formation attorney to start a new entity is a milestone that requires careful consideration. It can be immensely rewarding to see your ideas come to fruition, as we have seen with many clients over the years. However, setting up the wrong entity can leave you and your assets exposed to unnecessary risks and limit your business’ growth. Achieving prosperity for your new entity will require laying a foundation of careful and strategic decision-making.
Texas Business Formation
Choosing a business entity is a major decision that will have implications on important matters for your business, such as taxes, ownership, and liability. Texas law allows for the formation of a variety of types of businesses, each with its own set of benefits and drawbacks.
Registration with the Texas Secretary of State is available for the following entities:
- Limited Liability Company
- Limited Partnership
- Limited Liability Partnership
Our business lawyers can walk you through the details regarding the variety of business entity options available, and help you select and form the best one for your business goals. With over 40 years of experience working with companies across numerous industries in Houston, our business formation lawyers are well equipped to help form the following entities:
C corporations limit the individual liability of directors, officers, shareholders, and employees, but this type of entity also has a major drawback of potential double taxation. A C corporation is sometimes advisable for entities with foreign ownership. We do point out, however, that a corporation – whether taxed as a C corporation or an S corporation – is still a corporation, and as such LLCs also provide the option for the entity to be taxed as a corporation.
These entities are very similar to C corporations in that they limit liability and offer investment opportunities, but S corporations are not subject to the same double taxation as C corporations. Owners of an S corporation will report their share of profits and loss on their personal tax returns and income is only taxed once. But S corporations face several limitations. First, only entities wholly owned by legal U.S. citizens or permanent residents can file for S corporation status, and S corporations can have no more than 100 shareholders. S Corporations will also be subject to higher IRS scrutiny and may face ongoing expenses to maintain S corporation status.
Limited Liability Companies
An LLC is designed to limit a business owner’s personal liability should their company become exposed to risk. This type of entity keeps business assets and debts separate from each owner’s personal finances and assets, and also keeps the assets of the business exempt from creditors of the owners. LLCs also allow for ownership by nonresidents and entities (unlike subchapter S corporations) and allow creative allocation of profits and losses among the owners putting up sweat equity and those putting up cash.
Partnerships are incredibly easy to form and operate, which makes them very popular with small business owners, but they do have a few downsides. Partners remain personally liable for any company liabilities and business debts, even those incurred by another partner. Unfortunately, most partners never get around to signing a partnership agreement and when something goes wrong, the expenses involved can wind up costing the business. Before starting a partnership, contact our office for a consultation so we can discuss what your best options are to limit any negative impacts to your business in the future.
Like partnerships, sole proprietorships in Texas are also easy to form and operate and do not require state filings except though county dba filings required for an assumed name. Sole proprietorships allow the owner to be personally liable for any lawsuits or debts against the company. If you are starting a business by yourself, you might opt for a sole proprietorship because it is less expensive than other entities, but this could leave you vulnerable to more costly situations in the future. We would be happy to assist you in discussing if this is the correct path forward for you.
Houston Business Formation Lawyers
As an entrepreneur, you have likely sacrificed a great deal for your business idea. Protect your new business and idea, by hiring a highly skilled, seasoned business attorney that knows the nuances of many types of Houston businesses, their industries, and their relevant laws and regulations. With this bank of knowledge, our lawyers can not only assist you with forming and registering the proper entity, but will also further secure your business against future litigation, contract disputes, and matters involving employees.
When working with our law firm, we will provide you with the professional analysis you need to make informed decisions and provide the proper counsel on issues such as:
- Choosing the right business entity to suit your industry, goals, and governance structure
- Establishing corporate formalities such as bylaws and meeting minutes
- Obtaining financing and acquiring assets
- Pursuing franchising opportunities
- Structuring business transactions
- Determining members’ or shareholders’ rights
- Working through a business succession plan
- Addressing tax implications
We can also assist your business with drafting operating agreements, resolutions, corporate governance, and compliance. Many companies that do not have business formation attorneys review their contracts and agreements open themselves up to the risks of litigation and debts. For instance, partnerships are notoriously guilty of failing to properly develop partnership agreements. Should a dispute arise without a written agreement, you may be forced to rely on verbal agreements. Since our attorneys have litigated many business disputes and assisted many companies with entity formation, we know what risks your new business will be exposed to. With careful planning, your business formation lawyer will help prevent expensive risks from impeding your success.
Houston Business Formation Lawyers
When you are a client for Adair Myers Stevenson Yagi, we are just as invested in your success as you are. We pride ourselves on providing our clients with actionable and precise legal advice that will protect your company and your assets, and allow you to focus on the growth of your business. Contact us today for an initial consultation to learn how one of our dedicated Houston attorneys can help you start the business formation process.