Formation & Organization
Starting a business is an incredibly exciting prospect. To give your business a solid foundation, you will need to understand the different types of business entities and decide which one is right for your business. At Mejias Lindsay PLLC, we work with clients to help them understand their business needs so we can set them up for success when forming a new business. Our business formation lawyers can help you understand each step of the business formation process, providing the professional analysis you need to make informed decisions. Some of the business entities we have helped form include:
Limited Liability Companies (LLCs)
Limited liability companies do just that – they limit your liability. In an LLC, business assets and debts are completely separate from the personal finances and assets of the business owners. For example, if an LLC becomes the subject of a costly lawsuit, the business owner’s personal assets are protected from damage awards. However, LLCs are also limited in their ability to grow. LLCs cannot issue shares of stock and are often subject to self-employment taxes.
Just like LLCs, C Corporations also limit the personal liability of the directors, officers, shareholders and employees of the company. Unlike LLCs, C corporations are allowed to issue stock to an unlimited number of shareholders. However, because C corporations can sell stock, all revenue is taxed twice – once at the company level and again at the shareholder level. In addition to costly taxes, C corporations can be expensive to set up and maintain because the government regulates them.
Like C corporations, S corporations limit the personal liability of business owners and offer investment opportunities through the sale of stock. C corporations are not subject to the same tax requirements as C corporations, and are only taxed once. However, only legal U.S. citizens or permanent residents can file for S corporation status and S corporations can have no more than 100 shareholders.
Partnerships are popular with small businesses because they are very easy to form and operate, but they also have some risks. Partners will be personally liable for any lawsuits or debts of the company. Because of the potential for personal liability, the decision to form partnerships should not be taken lightly.
Like partnerships, sole proprietorships are easy to form and operate and the owner will be liable for any lawsuits or debts against the company. Many small businesses chose sole proprietorship because it is the cheapest entity formation option, but this could be a costly mistake. Forming a sole proprietorship should be carefully considered.
Trying to pick which entity is right for you on your own is challenging, and the wrong choice could end up costing you your business. That’s why the attorneys at Mejias Lindsay PLLC offer free consultations. We can help you get your business up and running and continue to provide you with high quality legal representation if other issues arise.
Business Formation Attorneys in Houston
The business formation attorneys at Mejias Lindsay PLLC are just as invested in your success as you are. When you partner with us, you get the peace of mind of knowing an aggressive and knowledgeable legal team is looking out for your best interests. Contact us today to schedule a consultation to see how we can help.