If you’re starting a business in Texas, you might want to consider operating it as a limited liability company (LLC). LLCs offer certain benefits that you won’t get when you’re a sole proprietor, and are usually much less complex than forming a corporation. When you form an LLC, you might find it easier to keep your business afloat during uncertain times.
What are the benefits of forming an LLC?
If you decide to form an LLC during the business formation process, you generally can’t be held directly responsible for business debts and liabilities, except in certain situations. As the name suggests, an LLC limits your liability to third parties for a number of legal issues. This could help you escape a bad situation that might otherwise destroy your business and even leave you personally liable for these obligations.
LLCs are also cheaper and easier to manage than other types of businesses. LLCs require less paperwork and only need a single person to qualify, although you could add more people to your LLC. Additionally, LLCs usually have more favorable tax treatment than if you were a sole proprietor if you make that election with the IRS. Unlike other types of businesses, the government doesn’t tax LLCs as separate entities.
When you launch an LLC, you can enjoy more freedom. You’ll be able to add other businesses or LLCs as members at a later time, and can choose whether you want your LLC to be managed by its members, its managing members, or a mixture of them. You’ll also enjoy lower start-up costs, making it easier to invest in a small business. A business law attorney could help you set up an LLC and educate you on what it means for your company.
How do you launch an LLC?
If you’re thinking about starting a business, it’s best to hire an attorney before you do anything else. An experienced business law attorney can educate you about applicable tax and employment laws to advise you on how to keep from doing anything illegal, even by accident. They should tell you about your options for starting a business and help you decide which choice of entity is best for you and your new business, whether that’s an LLC, a sole proprietorship, a corporation, or one of the more specialized, professional entities.
