Dallas Business Law Topics

If you don't already know who your partner will be in your new business venture, you will need to choose one. This can be a challenging process, especially if you don't know where to start. Today, we will provide you with a handful of tips for choosing a partner to help start your business in Dallas, Texas.

First and foremost, you will want to find a partner who has some sort of experience in the business world, especially if you don't. You will want to look to partner with someone who has helped work with startups in the past. These skills can go a long way in helping your business succeed.

Incorporating your business adds legitimacy to it while also formally spreading out the responsibilities associated with it to your corporate partners. Yet with it also comes added liabilities, among which are new tax regulations. Many business owners and executives who (like you) have considered incorporating have come to us here at Palmer & Manuel PLLC questioning how they might enjoy the benefits of being a corporation yet still enjoy some of the special treatment afforded to small businesses. One way to accomplish this can be incorporating as an S corporation.

An S corporation (also referred to as a subchapter S) is a type of corporation that allows your business to avoid the issue of double taxation (having income taxed at both the corporate and personal levels). If you file as a standard corporation (a "C corporation"), your business is considered to be a separate entity from your shareholders. Thus, you pay taxes on your annual earnings and your shareholders pay income tax on their dividend payments. With an S corporation, you are allowed to pass corporate income, losses, deductions, and credits directly through to your shareholders. This allows them to pay taxes on such income at ordinary tax rates and reduces your corporation's tax liability to built-in gains and passive income.

According to the Internal Revenue Service, your business must meet the following requirements to qualify for S corporation status:

When considering new opportunities in Texas, pay close attention to non-compete agreements. Non-compete agreements have traditionally been enforceable in Texas that fairly restrict the ability to work in a specific industry, in a specific location, for a specific period of time. However, the key word here is "fairly," so non-compete agreements that are too broad in their definition of the nature of the work, are too far-reaching in their geographical coverage, or are restrictive for too long a time period will not be enforceable.

Whether you are looking to start a new role or you are looking to bring someone else into a new role, you want to be sure you understand the terms so you will know exactly how enforceable the non-compete is.

When you start a business in Texas, you have many options as to its structure. Even once you decide on a partnership between you and one or more other individuals, you still have a variety of options available. The most common options are a general partnership and a limited partnership, each of which has its own advantages and disadvantages. According to FindLaw, however, you also have a third option, the limited liability partnership, which combines some of the advantages of each of the two other types of partnerships. 

One of the major advantages of an LLP is that if you already have an existing partnership, you do not need to modify the partnership agreement already in place. Once you have identified the appropriate state agency, all you have to do is to register as an LLP by submitting your application. The application requirements vary somewhat by state, but at the very least, you will have to disclose your place of business and each of the partners' names.