The formation and selection of a business entity is far more complex than meets the eye. Your personal liability protection and specific tax advantages are the two primary drivers in selecting the type of business entity to file with the State.
As seen, selecting the best business entity involves quite a bit more than simply clicking a few buttons on a website. Narrowing down the best business entity for your company requires a detailed analysis of your business, your internal relationships, your tax objectives, your personal liability objectives, and your long-term strategy.
Partners or No Partners
Having partners creates a multiplicity of wrinkles in selecting the best business entity for your environment. Choosing the incorrect entity may result in you losing control of the management of your business. Every business having multiple partners must anticipate that sooner or later one or more of the partners may exit the business. Creating additional documents such as employment agreements, covenants not to compete, and buy sell agreements represent the best protection to smoothly transition a partner/executive who voluntarily or involuntarily leaves the business. Avoiding significant business interruption and worse, partner litigation is minimized by preparing and executing these additional documents contemporaneously with formation of your new business entity.
Not all business entities are created equal. The Texas Legislature has created legislation providing additional protections for one entity while not providing the same liability protection for other entities. Performing a legal analysis of your business and long-term goals is important in the selection process to maximize shielding of your personal liability. Our firm provides expert legal advice to tailor the best legal entity for your personal risk assessment.
There are a number of unforeseen legal consequences that may be affected by your choice of business entity. Incorrectly selecting your business entity may result in the loss of hundreds of thousands of dollars. In addition, your right to control and manage your business determined by the type of entity selected. Therefore, expert legal advice is vital to minimizing the risks associated with your new company.
Certified Public Accountants
Many CPAs assist and advise their clients in the selection and formation of their new business entity. While many CPAs do a wonderful job for their clients, they oftentimes fail to appreciate the liability and litigation consequences involved in that selection process. Moreover, following the proper corporate formalities in forming their business entity is a critical step that should not be overlooked. While the tax consequences are important, just as equally important is how the type of business entity may shield you from personal liability while maximizing your rights under the law.
- Corporations, S Corp
- Limited Liability Companies (LLC)
- Series LLC
- Limited Partnerships
- Limited Partnerships
- Real Estate Investment Trust (REIT)
- Nonprofit Corporations
- Close Corporation
- Professional Association (PA)
- Professional Corporation (PC)
- Professional Limited Liability Company (PLLC)