If you’re looking to start a business here in Texas, then there are a lot of incorporation options that are available to you. There are many different management, liability, tax and operational benefits associated with each of the different business formations.
There are three primary types of partnerships that you may form here in Texas. There’s a general, limited or simply a limited liability partnership.
A general partnership is a corporate entity that is formed by two or more individuals who are looking to go into business together to turn a profit. The parties that form this corporation have an agreement in place that guides their operations. Texas law doesn’t require such a partnership agreement to be put in writing though.
Partnerships that operate under assumed names are required to file doing business as (DBA) certificates in each of the respective Texas counties where they operate unless the partners have a central office that they work out of. If they have a joint office, then the partners only have to file a DBA certificate only in the county in which they have their headquarters.
A limited partnership (LP) can be formed by two or more individuals. Any partners wishing to work together must also operate according to their partnership agreement. That document generally specifies how the partners intend to collaborate on matters that are limited in scope.
The state of Texas doesn’t have any particular requirements in place specifying that such an agreement has to be written though. It doesn’t have to be placed on public record or with the Texas Secretary of State either. Partners must file a certificate of formation with the state though.
A limited liability partnership (LLP) is much like an LP in that it can be formed by two or more individuals with each partner having their responsibilities outlined in the partnership agreement. The primary difference between an LP and an LLP is that LLPs afford certain liability protections to the general partners. LPs don’t inherently provide this legal benefit.
Many Temple and other Texas residents set up LLPs because this type of entity shields the partners’ personal assets from creditors if they sue the partnership.
If you’re thinking about incorporating in Texas, then you may find it helpful to speak with a business law attorney first. Your lawyer can recommend the best corporate structure that may allow you to reach your business goals.
