If you’re thinking about starting a business in Texas, it’s an exciting time in your life. So much goes on in the startup phase. It can be rewarding to accomplish your goals, yet stressful, as well. Building a strong network of support from the start is the best way to minimize stress and to have assistance on hand if a problem arises. Acquiring an LLC entity may be an issue of concern for you at this time.
There are several things to keep in mind when setting up an LLC. The initials stand for Limited Liability Company. Its main purpose is to protect you as a business owner, more specifically, to protect your personal assets from lawsuits.
What are the characteristics of an LLC?
An LLC has characteristics that are similar to various ownership styles. Its properties are the same as a corporation in some ways, but it’s also similar to a partnership or a sole proprietorship in other ways. To complete the set-up process, the steps included in the following list are typically a requirement:
- You must choose a name for your business.
- Decide who will act as the registered agent for your LLC.
- Obtain the Texas LLC Article of Organization form.
- Fill out the Article of Organization form.
- File the articles of organization.
- Execute an operating agreement.
- Maintain active function of your LLC.
There are important issues to remember regarding each of these steps. For instance, when choosing a name for your business, due diligence is necessary to make sure you are not infringing on someone else’s copyright. There are also fees involved in some aspects of an LLC, such as an annual fee that the registered agent must pay.
Main benefits of using an LLC as a business entity
If your Texas business runs into financial trouble or faces legal problems, the fact that you’re operating under an LLC entity can help protect your personal assets. An LLC also provides you with more tax options as a Texas business owner.
In some cases, you might determine that you’d rather operate under a sole proprietorship than an LLC entity as a business owner. If you’re a freelancer, for instance, or do not have any employees or partners, then sole proprietorship might be a better way to go.
Carefully explore all options before choosing a business entity
Paying attention to detail is a key factor to business success in Texas or elsewhere. The more you understand business laws and regulations ahead of time, the more thoroughly you can explore your entity options and determine which is a best fit for your immediate and long-term needs and ultimate business-related goals.
It’s helpful to speak with someone who is well-versed in Texas business laws before taking any formal action to acquire a business entity.