Business Formation

White & Co Attorneys and Consultants, Dallas, Texas, provide a number of options for businesses seeking entity formation such as:
 
Limited Liability Company (LLC),
Limited Partnership (LP),
Limited Liability Partnership (LLP),
Corporation,
Partnership.

Our lawyers work with business owners intending to form a LLC, form a corporation, or form a partnership for their existing business or new business. They help new and existing business owners with legal matters related to Business Formation and how to decide if they need a closely held business, limited liability company (LLC), partnership, limited partnership (LP, Ltd.), or corporation (subchapter C or subchapter S). The lawyers at White & Co Attorneys and Consultants, Dallas, Texas also help business clients in the formation of Family Limited Partnerships (FLP). Our Attorneys work closely with business owners in the formation of their business entity to determine the best solution to meet the goals and objectives of the new business. Below are the Texas business entities most often formed at the law office of White & Co Attorneys and Consultants, Dallas, Texas.

Basic Texas Business Entities

It is most cost efficient for new business owners to chose the appropriate entity for their business. Our lawyers at White & Co Attorneys and Consultants, Dallas, Texas will help the business owner quickly become familiar with the alternative entities and then coordinate with the business accountant to identify the entity choice to accommodate the long term goals and plans of the business owner. Texas business entities include:
• Limited Liability Company (“LLC”)
• Limited Partnership (“LP” or “Ltd.”)
• Limited Liability Partnership
• S Corporation
• C Corporation
• General Partnership
• Sole Proprietorship

Limited Liability Company or LLC

To obtain the benefit of limited liability company status in Texas a Certificate of Formation must be filed with the State of Texas in order to formally create a Limited Liability Company (LLC). A Limited liability company, a corporation and general or limited partnerships resemble each other in some ways. The LLC provides the benefits of corporate limited liability for all owners of the LLC while retaining partnership tax advantages. The operation of LLC’s is flexible and less formal than that required of a corporation by Texas law. Thus the LLC is a very popular business entity for entrepreneurs and new business owners who need the lower maintenance of less formality in comparison to the corporate structure enabling them to devote their time to the demands of a new or growing business. The limited liability company resembles a corporation and a general or limited partnership by giving the power to run the day to day operation of the LLC to the members themselves or for managers to run LLC like a corporation Board of Directors. Accountancy advice allows LLC business owners to choose between tax treatment options. The LLC is a single entity which provides liability protection from the operations of the LLC to all of its owners. A minor limitation of the LLC is if it operates with only a single member and undertakes certain transactions under relevant state and federal tax and property codes, the entity may be disregarded for the purposes of tax or levy calculations against the single member. Dallas Business Lawyers at White & Co Attorneys and Consultants work with businesses and accountants to form Limited Liability Corporations, LLC in Texas.

Limited Partnership or LP or Ltd.

A limited partnership entity, formally created under Texas law, provides the limited partners liability protection. The limited partners receive liability protection by filing a Certificate of Formation of Limited Partnership with the State of Texas. A limited partnership is made up of one or more general partners and one or more limited partners. The general partner or general partners control the day to day operation of the partnership and any other matters allowed the general partner as set forth in the Limited Partnership Agreement. All limited partnerships must have a limited partnership agreement. Limited partnership agreements will clearly set out the rights and responsibilities of the general partner and the matters upon which the limited partners will have control or a vote regarding the operations of the limited partnership. Limited partners do not participate in active management of the partnership as a limited partner but can be employed by the partnership. The general partner accepts liability and responsibility for the partnership in exchange for the non-participatory financial backing of limited partners. The general partner is usually a corporation, limited liability company (LLC), or another limited partnership because the general partner is ultimately liable for all debts and obligations of the limited partnership. Limited partners invest in the limited partnership without risk of liability beyond their initial contribution as set forth in the limited partnership agreement. Dallas Business Attorneys at White & Co Attorneys and Consultants can help clients in the entity formation for the General Partner, the formation of the Limited Partnership, and drafting the Limited Partnership Agreement.

S Corporation or Sub S Corp.

The S Corporation is a regular corporation for state law purposes except the S Corporation is a device used commonly by close corporations in which the shareholders have elected, under Subchapter S of the Internal Revenue Code, to be an S corporation and therefore treated as a partnership for income tax purposes. It is advisable this election be made by the shareholder’s accountant. Unless the corporation and its shareholders make the election to be a S Corporation, the corporation itself is subject to taxation on its income. S corporations are subject to very technical rules of federal income tax law regarding the qualification and maintenance of S corporation status. Shareholders of S Corporations are generally not liable for debts or claims against the corporation unless they have otherwise agreed to be obligated for such debts by personal guarantees. Dallas Business Lawyers at White & Co Attorneys and Consultants help business clients in the formation of S corporations in Texas.

C Corporation

A Texas corporation is created by filing the required formation documents with the Texas Secretary of State. It is an artificial person or legal entity, created by statute and existing separate and apart from its owners or shareholders, so that it may own property, make contracts, and sue and be sued in its own name. By incorporating a business, shareholders are shielded from any liability for debts and other obligations of the corporation. A corporation typically has a board of directors, elected by the shareholders, which oversees the strategy and dealings of the business. The board selects officers to oversee day-to-day management of the corporation. Corporations vary widely in complexity and number of shareholders. Texas corporations vary in types and can include: (1) the individual owner corporation, in which all stock is owned by one person. (2) the close corporation, in which the stock is held by a few owners and is not publicly traded; and (3) the public issue corporation, in which shares of stock are sold to the public and held in many hands. Unlike a sole proprietorship or partnership, a corporation can have continuous existence. As a general rule, the death of a shareholder or the sale of stock by one owner to another will not affect the continuity of the business operation. As a general rule, corporate shareholders are not liable for claims against the corporation beyond the amount of their individual investment. Dallas Business Attorneys at White & Co Attorneys and Consultants help business owners form corporations in Texas.

General Partnership - GP

A general partnership occurs whenever two or more persons or legal entities associate to operate a business as co-owners of the business for profit. The general partners may or not have a written partnership agreement spelling out the rights and duties of the partners relative to the partnership assets, liabilities, income and losses of the business, and control of the business operations. To the extent these matters are not addressed by a written partnership agreement, Texas has enacted statutory laws to provide an overall structure for the management and operation of the general partnership. Each partner has the implied authority to bind the partnership as to outsiders by any act within the scope of the usual activities of the business. Each partner individually, and the partnership as a separate entity, is jointly and severally liable for all debts and obligations of the partnership and for wrongful acts or breaches of trust by other individual partners. Dallas Business Lawyers at White & Co Attorneys and Consultants produce Partnership Agreements for partners who choose this type of partnership.

Sole Proprietorship

Sole proprietorship is the simplest business structure. The individual owner carries on his or her own business even though the business may be operating under an assumed name. Under Texas law, a sole proprietorship has no separate legal existence apart from the sole proprietor. The sole proprietor has all the control of and responsibility for the business operation and business decisions. The sole proprietor owns all the business property as an individual but also assumes unlimited personal liability for all debts and other claims against the business. Sole proprietorships are the simplest forms of business structure with the most risk in terms of liability from its operations. Dallas Business Lawyers at White & Co Attorneys and Consultants help sole proprietors form a new business entity such as a LLC, limited partnership, or corporation for their existing sole proprietorship business to allow for future growth and to offer additional liability protection.

For more detail, call our Lawyers at White & Co Attorneys and Consultants on (214) 722 7100 or click to contact us.