Which Type of Texas Business Entity Is Right for You?
As we steamroll our way through the holidays toward the end of the year, many Texans are spending time reflecting on the past year, weighing options and making plans for 2014. Some of those to-do lists and resolutions will include taking making their dreams a reality by starting their own businesses. Regardless where your passion lies, if you choose to step into the world of business ownership, one of the first decisions you should consider is what type of legal business entity is right for you.
Texas business entity options
In the state of Texas there are six common business entity categories:
- Sole Proprietorship — When one person conducts business without first establishing a formal business organization. This is the simplest and most common type of business structure.
- General Partnership — When two or more people undertake a common goal for profit.
- Corporation — A legally-formed business or organization which has the rights and duties of an individual under the law and was formed for a specific purpose.
- Limited Liability Company — A limited liability company (LLC) is not a partnership or a corporation but rather is a distinct type of entity which has the powers of both a corporation and a partnership. Owners are referred to as members, and members enjoy certain limited personal liability for business debts.
- Limited Partnership – A Texas limited partnership is a partnership formed by two or more persons and having one or more general partners and one or more limited partners.
- Limited Liability Partnership – The type of entity is similar to a Limited Partnership, but general partners enjoy limited personal liability with certain restrictions.
Each type of business comes with a set of rules and regulations for operation. Before deciding which type of business you wish to form, contact an experienced Bryan-College Station, Texas business law attorney. Our attorneys provide assistance and answer your start-up and business formation questions, as well as ongoing compliance and management concerns. Call the Peterson Law Group to make an appointment at 979-703-7014 or fill out our online contact form.