Choosing an entity for your business is one of the most important decisions you will make. It should align with your current and future goals. A skilled business attorney could help you identify your objectives to make the best choice. Do you plan to take the company public as your exit strategy, sell your holdings to a business partner, or engage in a business combination? Are you concerned about liability or double taxation? Do you want to expand globally or remain a small local business?
You can choose a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each has different government filing and regulatory reporting requirements. Sole proprietorships do not have formal requirements unless you need to secure county or city permits. Corporations are the most complex to navigate. To choose the right entity for your venture, contact a knowledgeable Dominion business formation lawyer at Begum Peláez-Prada PLLC.
LLCs and corporations can choose to be taxed under subchapters C or S of the Internal Revenue Code. However, LLCs can also elect to be taxed as sole proprietorships when there is only one member or when it is being jointly held by a married couple. This method allocates the business’s profits and losses to the persons who declare them when filing personal federal taxes, much like a sole proprietorship. Thus, double taxation is avoided. LLCs with at least two members can choose to be taxed as a partnership under the IRS subchapter K rules.
General LLC members can also be personally responsible for the company’s debts, while limited members are only responsible for the amount they contributed to fund the company. Shareholders are not responsible for a corporation’s debts, but a shareholder’s stock is an asset that can be seized if a personal judgment is entered against them.
Our managing attorney, Sasha Begum, has advised international companies and small businesses alike for almost 20 years. Our bilingual team in Dominion is here to support you from business formation to exit strategy.
After filing LLC organizational articles or a Certificate of Incorporation with the Texas Secretary of State, our team will help you apply for your Employer Identification Number (EIN) from the Department of Revenue for you to use in government, tax, and bank transactions. Our team also provides:
If you are ready to form your company, our Dominion legal professions could handle the legal aspects so you can concentrate on the business ones.
Dominion does not require LLCs to have operating agreements, but not having one can lead to misunderstandings about the company’s structure, finances, membership interests, new member admittance, and profit allocation. Also, if members’ initial capital contributions differ and no operating agreement allocates profits and percentage of ownership, it is likely that all members would be considered equal at dissolution, unfairly benefiting those who contributed the least.
As an entrepreneur, you have a vision that involves molding an idea into a thriving business. Our mission is to help you become successful.
The team at Begum Peláez-Prada PLLC could advise you on the entity that best serves your goals. We could charter your business and provide the necessary contracts and documents. Call us today, and let a Dominion business formation lawyer guide you throughout your journey.
