Houston Business Formation & Corporate Attorneys

At Vethan Law Firm, our business and corporate attorneys serving Houston and the surrounding Texas areas are here to serve the needs of a wide variety of business entrepreneurs and owners, from growing family-owned businesses to corporations with franchises and divisions all over the world. Our Texas-based firm provides the counsel you need to design an effective corporate organizational structure and create company agreements, including shareholder agreements, partnership agreements, and operating agreements, as well as the ancillary buy-sell agreements, to define the roles and responsibilities of the governing persons, managers, and other key individuals in the company hierarchy.

As corporate counsel, VLF often helps new and reorganizing companies determine which business form is appropriate for the venture. Most frequently, this turns out to be a limited partnership (LP), a limited liability company (LLC), a series LLC, a corporation, or, for certain professionals, a professional association, a professional corporation, or a professional LLC.

Our goal is to provide you with sound and steady legal guidance, in even the most tenuous circumstances, and build a foundation for a long-time strategic alliance.

Email us or call (888) 650-5011 to book a free introductory consultation with a Houston business formation lawyer today. Hablamos español. 

Business Formation & Corporate Organization in Texas

Business formation involves selecting the most appropriate structure for your business, registering it with the state, and completing the necessary legal and regulatory requirements. The chosen structure determines how your business will be taxed, its liability protection, and its management structure, among other things. 

Each business structure has advantages and disadvantages that you should understand before selecting what is right for your startup or reorganization. 

Examples of business structures and their pros and cons include:

Sole Proprietorship: This is the simplest form of business structure, where the owners operate the business as an extension of themselves.

Advantages: Easy and inexpensive to set up, the owner has full control over the business, no separate tax filing is required; income and losses are reported on the owner's personal tax return.

Disadvantages: No liability protection (the owner is personally responsible for all business debts and legal obligations), and limited growth potential due to difficulties in raising capital.

Partnership: A partnership is a business owned by two or more individuals who share profits and losses. Two common types of partnerships are available: General Partnership (GP) and Limited Partnership (LP).

Advantages: Relatively easy to establish, shared responsibility and resources, profits and losses flow through to partners' personal tax returns.

Disadvantages: General partners have unlimited personal liability for business debts and obligations and potential conflicts between partners. Limited partners have limited control over the business.

Corporation: A corporation is a separate legal entity owned by shareholders. Two main types of corporations exist, C-corporations and S-corporations.

Advantages: Limited liability for shareholders, easier to raise capital through the issuance of stock, and perpetual existence, as the business continues even if the owner dies or leaves.

Disadvantages: More complex and expensive to set up and maintain, double taxation for C-corporations (profits taxed at the corporate level and dividends taxed at the shareholder level), more regulations, and reporting requirements.

Limited Liability Company (LLC): An LLC is a hybrid structure that combines elements of both partnerships and corporations.

Advantages: Limited liability protection for owners (called "members"), pass-through taxation, with profits and losses reported on members' personal tax returns only (avoiding double taxation), and flexible management structure. 

Disadvantages: More complex and expensive to set up than sole proprietorships or partnerships. Currently in Texas, LLC members face self-employment taxes for Social Security and Medicare, at a rate  of approximately 15.3 percent.