Form a Texas LLC and Gain Major Business Benefits

The State of Texas generates many small businesses each year. One reason is that it is a friendly state for entrepreneurs. One example is the Texas Limited Liability Company Act which allows a business to be run through an asset protection entity known as a Texas limited liability company. This vehicle offers many advantages and benefits for business which are helpful to every person operating a business in Texas.

The greatest advantage of a Texas LLC is limited liability protection. Without the use of an LLC, a business is run as a sole proprietorship and in this case, the owners are completely and wholly responsible for all the obligations of the business including any liability resulting from lawsuits in the future.

The limited liability company offers a layer of protection separating the owners from the business. This benefit alone makes it worth the few hundred dollars it takes to form a Texas LLC for a business. Thousands of lawsuits are filed a day in Texas alone with small business being a common target.

Another benefit of using a Texas LLC for your business is that customers will trust your business more. This is because having an LLC business is like qualifying for a credibility seal. Your business will be seen as more trustworthy and distinguishable from the many sole proprietor businesses out there. There are so many scams and fly by night purported businesses that do nothing other than come up with a nice name. When you form an LLC you make a filing with the state. The public knows this and it evidences a sign of serious business owners.

A third benefit relates to federal income taxation. A Texas LLC can choose whether it wants a single layer of pass through taxation or to be taxed as a corporation. There are no requirements or conditions to either choice. The ability to avoid the double taxation of a C corporation without having to worry about meeting a list of requirements is one reason the Texas LLC is the most common choice for small business in Texas.

Another benefit is that a Texas LLC is very simple to manage and operate. Unlike corporations, there are no legally mandated formalities or structures when it comes to management and operations. In fact, the law allows for the owners to decide what rules and processes will apply to their business.

These are great features for the small business owner because each business is different and has different goals, objectives and concerns. Smaller and simple businesses can focus more on their businesses without having to worry about unnecessary compliance requirements while larger and more complex businesses can add the necessary requirements to meet their business needs.

As you can see, the first thing you should do when you start a business in Texas is form a Texas LLC so you set a solid foundation for your business.

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