When starting a for-profit business or charitable organization, the first legal decision you will make, whether you know it or not, will be your Choice of Entity Formation. The Entity you create will fall under certain laws and regulations at the State and Federal levels that will impact nearly every decision your Organization makes going forward. A new business could be a sole proprietorship, partnership, corporation or company.
That’s why the proper Choice of Entity is essential for a Business or Charitable Organization. The Attorneys at Hayes, Berry, White, and Vanzant, L.L.P. can help their clients make the right decision for their Business’ future. We can advise you on how to establish and structure your business in such a way as to Minimize Lawsuits, Reduce Tax Liability, Protect Personal Assets, Manage Corporate Property and prepare your organization to handle future legal matters.
General partnerships are not filed with the Secretary of State of Texas, but likewise do not enjoy the same liability protections of entities which are filed. To file and become a Limited Partnership, Limited Liability Partnership, Corporation, Professional Corporation, or Limited Liability Company, your entity must follow the requirements of the Texas Business Organizations Code and elect the appropriate Form of Entity. Also, its important to know the difference between a Charitable Organization and a For-Profit one; a non-profit may earn money and may pay salaries and expenses, but it must follow specific reporting, and end-of-year distribution requirements to maintain its non-profit status. In general, being a non-profit corporation means you are not taxed by the State.
Sole Proprietors and New Business Owners who are considering Incorporation should consult with an attorney on which type of Formation is right for their business. Limited Liability Partnerships, and Corporations have certain requirements for the Personal Protections they offer, and failure to comply with these requirements may result in the loss of that Personal Asset Protection. Perhaps the worst situation for a Business Owner who does not Incorporate would be to find themselves at the mercy of a court, deciding what type of Entity they are, and should have been operating as.
A Business or Charitable Organization cannot operate within the bounds of the law, unless it knows what its obligations to the law are. Besides Incorporating, choosing the right Entity for your company’s needs is the most important decision you will make for your company. The Attorneys at Hayes, Berry, White, and Vanzant, L.L.P. have the experience to help you make the right decision for your Business formation.
Incorporation itself can be a difficult process; failure to under take all the proper steps during Incorporation can have wide ranging effects on your Business and the Personal Protections your choice of Entity was intended to offer. If your new Entity is Under-Capitalized, or lacks the correct Liability Insurance for example, your Personal Assets could be left unprotected. That’s why having a competent Attorney draft and oversee your Incorporation is vital and is why you should call Hayes, Berry, White, and Vanzant, L.L.P.