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Considerations in choosing a business structure

On Behalf of | Jun 11, 2019 | Business Formation |

When you create a small business in Texas, you have choices as to what structure it will have. At Palmer & Manuel, we know that there are so many different ways of forming a new business that it may be difficult to decide which structure is best. 

Both your situation and your long-term goals can assist you in deciding on a business structure. According to FindLaw, the following criteria may be helpful considerations in reaching a decision in that regard. 

Procedures and expenses

Starting a corporation or a limited liability company involves a lot of paperwork and special fees, meaning that they are both complicated and expensive to set up. On the other hand, sole proprietorships and partnerships are easier to set up. Often, there are no fees involved, and little to no paperwork.


However, the ease of setting up a partnership or sole proprietorship comes with a price. If your company incurs business debts, you are personally responsible for paying them, meaning that even assets not related to your business could be at risk. Though corporations and LLCs are more difficult and expensive to set up, they afford you protection from personal liability.

Investment needs

A corporation is the only type of business structure that allows you to sell stocks in your business that provide others with a share in its ownership. Providing others with a stake in your company reduces the amount of control you have over it, but it can also offer advantages. For example, offering employees a stake in the business can aid retention. 

The best structure for your company depends a great deal upon your unique situation. More information about business formation is available on our website.