Determining the type of business structure a company decides to employ can be the next big question after a person or people decide what their business entails. In Texas, there are a number of categories that businesses fall into under state law.
The Limited Liability Company, as the Texas Secretary of State website details, is a distinct type of entity with the powers of both a corporation and a partnership.
The facts of an LLC
The company agreement sets the tone of how the business presents itself. Members of the company file with the secretary of state. A member, or owner, of an LLC can be an individual but also refers to any partnership, corporation or other entity that takes ownership of the entity. The liability of the members, in regards to responsibilities and lawsuits, extends up to their investment.
The flexibility of an LLC
As the site for Austin, Texas discusses, LLCs are “designer” entities since members can custom-build them to whatever specifics they need. An LLC operates with a governing board only if it arranges to do so. The entity can instead represent a one-man or one-woman show with most if not all decisions falling to a single member. Depending on the agreement details, LLCs have the ability to choose how the IRS considers them for tax purposes.
LLCs avoid many of the rigid requirements of corporations including the initial owner meeting or annual meetings. These entities provide a business with the structure needed to fill whatever niche it needs to. As a result, LLC requires more filing and legal navigating than a sole proprietorship or general partnership.