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Set Up A Texas Business? Choose The Right Entity

By Business Lawyer

As I mentioned in the “Top 10 Things To Do When You Set Up A Texas Business,” the second thing you should do is pick the business entity that’s right for your venture.

Sole Proprietorship or General Partnership

If you’re broke with few assets, it may make sense to set up a sole proprietorship (one person) or a general partnership between two or more individuals (e.g. spouses).

Of course, this doesn’t provide you with a personal liability shield.

So, if there’s a lawsuit against your business, your personal assets might be taken to satisfy any judgment for the plaintiff. This is a key reason why a sole proprietorship or general partnership between individuals rarely makes sense unless you’re essentially judgment-proof because of the lack of assets.

Texas Corporation

A for-profit Texas corporation is one alternative you may want to consider when you set up a Texas business entity. If you do it right, the entity will provide a corporate shield of your personal assets against most claims. In other words, if there’s a lawsuit or a business fails, you can typically walk away with your personal assets intact.

There’s also the ability to choose to way your entity is treated for tax purposes. For example, you can have it treated as a Subchapter C corporation or a Subchapter S corporation for federal income tax purposes.

Texas Limited Liability Company

A popular choice to consider when you set up a Texas business entity is a limited liability company (LLC). Like a Texas corporation, a Texas LLC offers a shield that protects your personal assets from most claims. And an LLC requires less paperwork to run it correctly.

Related Article: Form A Texas LLC Or Corporation

A Texas LLC also provides you flexibility for tax purposes. For example, you can tell the IRS to treat it like a Subchapter S corporation, a partnership (if more than one equity owner), or even a disregarded entity (like a sole proprietorship) if there’s one owner (a single member LLC).

Which Entity Do You Pick When You Set Up A Texas Business?

Talk with an experienced Texas business lawyer in order to make an informed decision on the type of entity that’s right for you. To speak with Texas Business Attorney Mike Young, set up a phone consultation now.

Set Up A Texas Business? Have A Legal Consultation First

By Business Contracts, Business Lawyer

I recently identified the “Top 10 Things To Do When You Set Up A Texas Business.” The first thing to do is to talk with an experienced Texas business lawyer.

Why?

Because the Texas business attorney will give you advice that can save you time and money.

For example, you may learn that it makes more sense to form a Texas limited liability company instead of a Subchapter S corporation…or vice versa.

Or you’ll learn that business equity ownership should be structured differently than you originally intended because it will protect your interests, save you a fortune in taxes, etc.

Plus, you’ll discover the essential business contracts needed to protect your new venture.

In short, your legal consultation with the Texas attorney is an excellent opportunity to review and revise your business plans in a way to maximize your chances for long-term success.

On the flip side, entrepreneurs who ignore the legal aspects of a startup (in the Lone Star State or elsewhere), risk losing everything through the shortsightedness of believing messes can be cleaned up easily after the fact.

Wise business owners know that it’s easier to prevent legal problems than fix them later.

Are you’re ready to set up a Texas business? Schedule a phone consultation with Texas Business Lawyer Mike Young today.

Top 10 Things To Do When You Set Up A Business In Texas

By Business Lawyer

set up a business in texasSo you want to set up a business in Texas? Here are the top 10 things you’ll want to do to get started…

1. Talk with an experienced Texas business lawyer. Adjust your plans based on that consultation.

2. Decide on the type of business entity you want to use to shield yourself from personal liability. Many startups choose to form a Texas limited liability company (LLC).

3. File the right paperwork with the Texas Secretary of State’s office to form your new business entity.

4. Apply for a sales tax permit from the Texas Comptroller’s office.

5. Get an Employer Identification Number (EIN) from the U.S. Internal Revenue Service (IRS). Plus, tell the IRS how you want your entity treated for tax purposes.

6. And you’ll want to apply for any other permits or licenses you may need from the state, county, city, etc. Your type of business (and its location) will determine which permits and licenses to get.

7. Set up your business’ bank accounts and apply for company credit/debit cards.

8. Select an accountant for your business. Your CPA can help you with federal income taxes — and assist you with Texas franchise tax reports.

9. Get business liability insurance. If there are two or more owners, consider key person insurance too.

10. Verify you’re running everything in your business within your new Texas LLC or other entity. For example, your business’ website should registered be in the company’s name — not an individual.