Selecting the appropriate business structure – such as a LLC, limited partnership or corporation – is essential for a company to operate efficiently and provide for growth.

To be successful, owners must be skilled in their line of work and understand how federal, state and local laws will impact their business.

Types of business entities

Working with an experienced Texas business law attorney is crucial when choosing a business entity. The most common structures include:

  • Limited Partnerships:A general partner entity is needed, adding complexity to this structure.  A limited partnership agreement should specify the rights, duties and responsibilities for each partner as well as how profits and losses will be shared. Limited partnerships can offer limited liability for limited partners.
  • Corporations:This entity is a standard for businesses with foreign owners, multinational and large businesses and for small businesses which often elect subchapter S status. Owners typically enjoy limited liability from creditors and legal disputes.
  • Limited liability corporations:LLCs are can be taxed as partnerships or as corporations and are extraordinarily flexible structures. Owner liability protection is available.

Factors to consider before making a choice

Numerous factors come into play when choosing an entity, and in some cases, the best choice is a combination. Your attorney will assess your needs, such as:

  • Flexibility: Does it allow for growth and change?
  • Complexity: What organizational documents are needed?
  • Cash Flow: Does the structure allow the flexibility need to provide the return of profits that the owners have negotiated?
  • Taxes: For each owner, will the tax attributes maximize profit?
  • Governance: What will the governance structure be for your business?

Optimize your business strategy

Working with a knowledgeable lawyer proficient with Texas laws is crucial for organizing your business and obtaining the necessary licenses and permits. The goal is to allow you to focus on the day-to-day operations and the big picture while making sure your structure aligns with your strategy and allows for efficiency and growth.