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Houston LLC Attorney

When starting a new business, one of the most important decisions is to decide on the right type of business entity with the help of our skilled Houston LLC lawyer at Vestige Law. With each business venture in Texas, various federal, state, and local legal concerns must be addressed.

Your business assets must be protected, and your personal assets must be guarded against the liabilities that arise in common business transactions. Contact our law office now and schedule an initial consultation with our trusted Houston business law attorneys.

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Why Do I Need an LLC Lawyer in Texas?

business owner can choose among various structures to operate a Texas business. These structures range from a simple sole proprietorship – to the more complex, such as a C corporation. One extremely popular entity type is the limited liability company (LLC). Whichever entity is right for your business plan, our qualified Houston LLC lawyers can get you off to the right start.

At Vestige Law, we can help:

  • Assist all types of business owners in deciding whether forming an LLC is right for them, as well as assist them in navigating every step of the business formation process.
  • Provide you with the legal counsel necessary to operate your business effectively, efficiently, and in compliance with Texas business laws.
  • Provide legal advice to individuals, small to midsize businesses, and large business entities.
  • Strategize your case with your goals in mind so you can run your business and live in peace
  • Provide the highest degree of transparency and integrity in our work.
  • Help startups, real estate investors, and businesses in the construction, oil & gas, software, and education industries.
  • Guide our clients through all manner of business transactions from start to finish, including all supporting legal documentation and compliance measures.

We proudly serve the Houston area and look forward to helping your Texas business. Contact our law office now and schedule an initial consultation with our top-ranking Houston business attorney.

What is a Limited Liability Company (LLC)?

A limited liability company (LLC) is becoming an increasingly used business entity for entrepreneurs across various industries. It is a popular business structure combining the characteristics of both a corporation and a partnership. A Texas LLC provides its owners with liability protection similar to that of a corporation while retaining the beneficial tax characteristics of a partnership.

An LLC can have one or more owners, commonly known as “members.” This business structure allows you to separate your business affairs from your personal matters. A credible Houston LLC lawyer can help you understand the nature of this business structure.

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What Are the Benefits of an LLC?

There are many benefits to structuring your business entity as an LLC rather than a sole proprietorship, partnership, or corporation. The advantages of LLC are best suited for businesses seeking a corporation’s formality with a partnership’s flexibility. A knowledgeable Houston LLC lawyer can help determine whether establishing an LLC is the most appropriate option.

Limited Owner Liability

There is no legal distinction between you and your business when you have a general partnership or a sole proprietorship. Since LLCs exist as independent entities, their owners are not liable for the company’s obligations and debts. It can protect your personal assets from being taken into pay debts or claims against your business.

Pass-Through Taxation

One of the key benefits of forming an LLC is pass-through taxation. With pass-through taxation, business partners pay taxes on all business profits on their individual tax returns. LLCs allow owners to avoid this so-called “double taxation” by choosing pass-through status with the Internal Revenue Service (IRS). With double taxation, income gets taxed both at the corporate level and when distributed as dividends to owners. With an LLC, income is only taxed at an individual member level rather than at the company level.

Organizational Flexibility

LLCs don’t have to use a formal structure. There are no minimum or maximum limits on the number of owners, also called members, that an LLC can have. The LLC’s members have more choices about how they run the business and make decisions.

Easy Startup and Upkeep

In terms of paperwork, the requirements and fees for an LLC are relatively light, though there is wide variation in what states charge in fees and taxes. LLCs don’t have to hold annual meetings and usually are not required to keep extensive records.

What Are the Disadvantages of an LLC?

Aside from knowing the benefits, understanding the disadvantages of an LLC is also important in determining the right legal entity for your company. A qualified Houston LLC lawyer can help you weigh the pros and cons of building an LLC.

Costs

Unlike a sole proprietorship or a partnership, it generally costs more to form and operate an LLC. Some states charge initial formation fees, annual report fees, and/or franchise tax fees. Depending on how much your business earns, your profits, and how you take your money, the tax benefits of operating an LLC might not be worth the initial investment, set up of the business, and continuing paperwork.

Investment Disadvantages

Sometimes, an LLC may not be ideal for business owners seeking outside investors. This is specifically true if you’re looking for funding from venture capitalists, who usually fund corporations. Big investors typically prefer to invest in corporations over LLCs.

How to Form an LLC?

Once you decide to file an LLC in Texas, knowing the process and the applicable state rules is crucial. A trusted Houston, TX, LLC attorney can help walk you through the process of forming an LLC and ensure its compliance with Texas business laws. Here are the steps you need to take to create a limited liability company (LLC).

Choose a Name for Your LLC

The name of your LLC must be unique and different from the names of other business entities filed with the Texas Secretary of State. The LLC name must contain one of the following:

  • Limited Liability Company or Limited Company
  • Ltd. Company or Ltd. Co.
  • L.L.C. or LLC
  • LC or L.C.

Appoint a Registered Agent

In Texas, every LLC must appoint an agent to service the process in the state. A registered agent is an individual or business entity that accepts legal papers on behalf of the LLC.

File a Certificate of Formation

You can establish an LLC by filing a Certificate of Formation for a Limited Liability Company (Form 205) with the Texas Secretary of State.

Prepare an Operating Agreement

Although an LLC operating agreement is not required in Texas, it is highly recommended to have one. This document establishes how you will run your LLC and sets out the rights and responsibilities of the members and managers.

Obtain an EIN

If your LLC has more than one member, you must get an IRS Employer Identification Number (EIN), even if your LLC has no employees.

Annual Reports

Texas does not require LLCs to file annual reports with the Secretary of State. However, LLCs must file annual franchise tax reports.

Frequently Asked Questions

What is an LLC?

Limited Liability Company (LLC) is a type of business entity that combines the liability protection of a corporation with the tax benefits of a partnership. An LLC can have one or more owners, referred to as “members.” It can be managed by the members or a designated manager. The management structure of an LLC can be customized to fit the needs of the business.

LLCs are a popular choice for small and medium-sized businesses because they offer flexibility in management structure and ownership, as well as limited personal liability for the owners. This means that the owner of the LLC, if properly operated, should not be personally liable for the debts and obligations of the business. Our knowledgeable Houston LLC attorney can help you decide whether forming an LLC is right for your particular situation.

What are the Benefits of Forming an LLC?

Forming a Limited Liability Company can provide your business with many benefits, most notably limited liability for debts and judgments while allowing for flexibility in how you operate the business. When established properly, it can protect you and your business from disastrous financial consequences. Here are some of the main advantages:

  • Limited Liability Protection. It provides personal liability protection to the owners, also known as members. This means that the individual assets of LLC members cannot be used to satisfy the LLC’s debts and obligations. A member’s risk of loss is limited to the amount that the member invested in the business. If the company is sued or goes bankrupt, the owner’s personal assets, such as their homes and cars, are generally protected from seizure.
  • Pass-Through Taxation. A limited liability company is a “pass-through” tax entity. This means that the LLC’s gains, losses, income, deductions, credits, and other tax items flow through to the member or members.
  • Flexibility in Taxation. LLCs can also choose how they want to be taxed. LLC owners can choose whether to use pass-through taxation or pay taxes as a corporation, depending on the business circumstances. This is easily accomplished by filing a document called an election with the IRS. 
  • Ease of Formation and Maintenance. An LLC is the simplest business entity to form and operate. LLCs have fewer formalities to follow and are not required to hold regular shareholder meetings or keep detailed records.
  • Flexible Management Structure. LLCs offer flexibility in the management structure. There are no minimum or maximum limits on the number of owners or members that an LLC can have. Members can manage an LLC, which allows all owners to share in the business’s day-to-day decision-making.
  • Credibility. Forming an LLC can give your business credibility and legitimacy, which can be important when dealing with customers, suppliers, and other stakeholders. It reassures customers that yours is a real business.

How Do I Form an LLC in Texas?

While there are several options for business structures, the limited liability company (LLC) is a popular choice for new businesses. The steps to start an LLC depend on state law. By following these steps, you can ensure that your LLC is legally compliant and ready to operate in Texas. Our trusted Houston LLC attorney can walk you through the process. Here are the steps you need to take to form an LLC in Texas:

  1. Choose a Business Name. The name must be unique and not already in use by another business in Texas. Find an available business name that conforms to your state’s rules regarding LLC names. Usually, owners include the words “Limited Company” or “LLC” at the end of the name.
  2. File a Certificate of Formation. File a Certificate of Formation with the Texas Secretary of State’s office. You’ll need to provide basic information like your company’s physical location and mailing address as well as details on the governing individuals (members) within the LLC. 
  3. Operating Agreement. An LLC operating agreement is an essential internal document that outlines how your LLC will be governed. This document outlines the ownership and management structure of your LLC. Without an operating agreement, Texas state laws could apply in the event of a dispute or conflict within the organization.
  4. Obtain an EIN. An EIN (Employer Identification Number) or Tax ID number is a number assigned to business entities by the IRS (Internal Revenue Service). This unique identification number is used for tax purposes and is required if you have employees or plan to open a bank account for your LLC.
  5. Publish a Notice. Some states require that LLC members publish a notice to the public in a local newspaper of their intent to form an LLC. In Texas, you are required to publish a notice of formation in a local newspaper within 120 days of filing your Certificate of Formation. This notice must include your LLC’s name and address, the name and address of your registered agent, and a statement that your LLC has been formed.

Can an LLC have one member?

Yes, an LLC can have one member, also known as a single-member LLC (SMLLC). SMLLCs are allowed in all states. A single-member LLC operates in much the same way as a multi-member LLC, with the main difference being that there is only one owner.

Who are LLCs best for?

Organizing your business as a corporation or an LLC is most helpful in two situations:

  • The business owners have large amounts of personal assets that they want to shield from any potential liability associated with the business.
  • The business is engaged in a dangerous activity that makes it more likely to be sued or has the potential of racking up large amounts of debt.

What’s the Difference Between a Corporation and an LLC?

The main difference between an LLC and a corporation is that an LLC is owned by one or more individuals, and a corporation is owned by its shareholders. Both LLCs and corporations provide limited liability protection to the owners. But LLCs are ordinarily taxed like sole proprietorships or partnerships. In addition, LLC owners do not work as employees of the LLC—they are self-employed business owners.

Call Our Seasoned Houston LLC Lawyer Now!

Understanding the benefits and disadvantages of an LLC and knowing how to form your LLC is essential for business success. To determine whether an LLC is the best structure for your company, it is in your best interest to work with our experienced Houston LLC lawyer at Vestige Law.

Our business law firm is committed to helping our clients achieve their business formation goals in Texas and throughout the United States. We have extensive experience in helping large and small companies get off the ground with comprehensive legal advice on the advantages and disadvantages of business entities such as sole proprietorships, partnerships, LLCs, or corporations. If necessary, we can help build dispute resolution strategies and provide effective legal representation during litigation. Schedule an initial consultation with our Houston business lawyer today to find out how we can help you and your business.

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