For some business owners, a limited liability company, also known as an LLC, is the optimum business structure because it limits the owner’s legal responsibility and has features similar to both corporations and partnerships.
- LLC means that the member cannot be held personally responsible for business debts and obligations.
- In an LLC, the member’s personal assets are shielded from the LLC liabilities as long as personal and business funds are never commingled.
- LLCs allow for pass-through taxation where the business partners pay taxes on all business profits on their individual tax returns. Essentially the business income “passes through” the business to the owners’ tax returns, assuring the member will avoid double taxation.
4 Steps to Forming an LLC
Forming an LLC occurs with four basic steps:
- Determining a business name that is available and that conforms to Texas’ rules.
- Filing all the appropriate paperwork, normally called the “Articles of Organization,” and pay all associated fees.
- Creating the operating agreement that dictates how the LLC will be run. A qualified LLC attorney is a valuable asset in this area.
- Obtaining all the required licenses and permits.
The LLCs operating agreement is perhaps the most important document associated with starting a business. It outlines the way in which the business will be organized and establishes the rights and responsibilities of the members towards each other and the organization itself. The insight of an experienced LLC attorney will help you establish a comprehensive operating agreement to set parameters for your company.
Do It Right the First Time
Limited liabilities companies have become increasingly popular in San Antonio, especially for entrepreneurs across a wide range of industries. They offer many of the protections of a traditional corporation with the flexibility of a partnership.
For the business to limit the liability of the owners, you’ll need to be sure that you are complying with all the relevant laws and regulations. To learn more about LLCs or forming a corporation, contact us today to schedule a free consultation at (210) 651-3851 and put our over 35 years of experience to work for you.
