Before you start drawing in customers and raking in profits for your new Houston business, you will need to select from a range of available business entities that best fit your existing and future needs. This process can be confusing to complete on your own, but it’s necessary to avoid legal issues in the future. For professional assistance with business entity planning and formation, The Chawla Law Firm in Houston can help! Here are some tips to get started with selecting the right business entity in Texas.
A Guide To Selecting the Right Business Entity in Texas
A sole proprietorship is a business owned by one person, and it can be an appealing option for some Houston business owners. In a sole proprietorship, the business is not legally distinguishable from the owner — this means fewer legal filings, but it also means you would be liable for all the debts and obligations of the business. To find out if this type of entity is right for you, schedule a consultation with our experienced lawyers in Houston!
Forming a Corporation
There are different types of corporations, which include C-Corporations and S-Corporations. While the requirements and capabilities of these corporations vary, the general condition is that they are comprised of shareholders, directors, and officers. There are several advantages to owning a corporation, but there are also notable implications that may affect your business. For example, C-Corporations are generally subject to two levels of taxation on income (entity and stockholder level), but do not have the same restrictions that another entity may have, like an S-Corporation, for IPOs. LLC’s on the other hand, may be publicly traded in certain industries such as Energy, but it is not typical and they would likely be taxed as a C-Corporation in certain circumstances. While the advantages and disadvantages of forming a corporation are extensive, our corporate attorneys at The Chawla Law Firm can help.
Establishing an LLC
An LLC is a limited liability company, which provides its owners with limited liability protection for their assets. This type of entity has a high degree of flexibility, and combines many of the bonuses of partnerships and corporations. However, statutory and case law for LLCs is less developed than its corporate counterpart, so you should consider hiring a knowledgeable corporate attorney to help you organize one.
Creating a Partnership
Partnership entities include general partnerships (GPs), limited partnerships (LPs), and limited liability limited partnerships (LLLPs). Partnerships offer impressive flexibility and are often seen in industries like real estate, but they can also subject you to personal liability concerns depending on your selected structure. To avoid such complications, our law firm in Houston can help you choose the partnership that’s best for you.
Starting a business in Houston is stressful enough without legal considerations. The Chawla Law Firm will guide you through all the formalities of entity formation, empowering you and your business to skyrocket from the start! Whether it's forming a specific entity or creating a private equity fund, we can help.