Dallas Business Formation Lawyers

Davis Business Law can assist with business formation and associated issues. We work with all kinds and sizes of businesses and can help you get your legal matters in order, setting your business up for long-term success.

Types of Business Structures

Deciding between the different types of business structures is arguably one of the biggest decisions you’ll make when founding a company. Each structure comes with different legal responsibilities, filing requirements, and levels of liability protection. A business formation lawyer can help you understand the benefits and downsides of each option.

Some of the options available to business owners in Dallas include:

Sole Proprietorship

A small business owner with no employees or partners often begins as a sole proprietor. This type of business is easy to form and tax filings are simple, since the business is not a distinct taxable entity. However, since there is no distinction made between the business and its owner, the owner is responsible for any debts or liabilities of the business. There is no liability protection in a sole proprietorship. Sole proprietorships are an easy way to start your business, especially in its early and experimental stages of turning a hobby into a business. But it’s a good idea to seek legal guidance to ensure you’re protected against any potential professional liabilities.

Partnerships (General, Limited and Limited Liability)

Partnerships are like sole proprietorships, but with two or more co-owners. The business ownership can be split in any way the partners see fit as long as the total equates to 100%. A partner can be a person, another partnership, or a business entity. In most partnerships, each partner is responsible for all the business’s debts and liabilities. Some types of business may be able to form partnerships that have liability protection.

Partnerships can take several forms:

• General Partnership: This is a business owned by one or more partners who all have personal liability business debts.
• Limited Partnerships: With this structure, at least one partner is a general partner with unlimited liability, but other partners can have limited liability.
• Limited Liability Partnerships: With this structure, all partners can have limited liability, although the details of how protection works vary depending on the state where the business is formed.

Before starting a company in Dallas, it’s vital to talk to a business formation attorney to get legal guidance on the rights and responsibilities of partners, depending on the company structure. It is also essential to draft and sign a clear partnership agreement that defines the roles and responsibilities of each partner. Investing in this document can prevent expensive and destructive legal issues later.

Corporation (C Corp)

Corporations can be private or publicly traded, either of which can make raising money simple. Investors are often more comfortable investing in corporations than LLCs. Publicly traded corporations have many more reporting requirements, though.

A corporation is also a separate entity and provides liability protection. But they have more reporting requirements and formalities than other entities and are taxed both at the corporate income level and the wage/distributions level.

Limited Liability Company

Limited Liability Companies are separate legal entities from owners or members and an LLC can have only one owner. This helps protect the owners’ assets, ensuring that if the company goes bankrupt, the owner does not. You must take important steps to maintain the distinction between the owners and the company, in order to keep the liability protection. Our attorneys can help you make sure you don’t blur the lines and lose protection.

Limited Liability Companies must file annual tax reports, and the paperwork is therefore more complex than a sole proprietorship. But, unlike a corporation, income is not taxed twice and flows through directly to the members, much like a partnership.

How Davis Business Law Can Assist With Company Formation

The above is just a short overview of some potential benefits and downsides of the different types of business structures. Each structure suits a specific purpose, and every new business is different. Before deciding which business structure to choose, it’s essential to seek legal advice.

The legal professionals at Davis Business Law can walk you through the issues you should consider when forming a business, such as:

• Who are your suppliers?
• Who are your target customers?
• What products or services are you offering?
• What sort of contracts will you be working with?

The answers to those questions, and others, will help determine the best business structure for your needs.

If you’re considering launching a business in Dallas, call Davis Business Law today for all your company formation needs.