Choices For The Business Owner In Houston, Texas

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Choices For The Business Owner In Houston, Texas

Houston


Choices for the Business Owner

Whether you are just starting a business, or you have been in business for a while, there are important things to consider about your business. Sometimes a business owner realizes that what started out as a dream or a hobby has turned into a real business.

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Because it happened so slowly and unexpectedly, the business owner just used his personal checking account to handle the business of the new company. Often there is no “company,” but simply someone who is doing business in their own name.

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If you find yourself in this position, or if you want to get started in business the right way, you should seriously consider speaking with an experienced business attorney.

The decision may seem simple, but there are many reasons to think carefully and make deliberate choices when structuring a business entity. You may have heard of the possible choices for how you can engage in business, but do you understand the risks, advantages, and disadvantages of each of them?

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Sole Proprietorship –

• Money earned by the business is deposited into the personal checking account of the owner as well. This business owner is commingling the funds of the business with his personal funds.

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• Many businesses start this way. The person who starts the business pays the expenses of the business from his personal checking account and uses his own savings to fund the business.

• He is creating a mess, to be blunt about it. He is putting all of his assets at risk if something goes wrong in his business. Does this sound like you and your business?


Partnership –

• There is no requirement that they prepare or sign any papers that show what their agreement is, how profits or losses will be shared, or who has what rights. People who engage in business in this manner are also creating a mess. Does this sound like you and your business?

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• A partnership is usually defined as being two or more persons who carry on as co-owners a business for profit. There is no requirement that these partners file any formal papers to form their partnership.


General Partnership –

• Is this where you want to be with your business? Did you know that there a safer way to do business while still keeping the flexibility and benefits of a partnership?

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• Whoever is a general partner in a business is liable for all the debts of the business.


Limited Partnership –

• All the limited partner has at risk is his investment in the business – if the limited partner doesn’t do the kinds of things that will subject him to liability for all the debts of the business.

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• Now we are getting into the kinds of business structures that require the filing of formal papers in order to start the business. A limited partner is usually not liable for the debts of a partnership.

• Do you know how to protect yourself if you are a limited partner? Even a limited partnership must have a general partner. Did you know there is a way to create a general partner for a limited partnership without it being you?


Limited Liability Partnership – 55

This is another statutory invention that should not be created or used unless the business owners understand exactly how it should operate.

Limited Liability Partnership ( LLP )Limited Liability Partnership ( LLP )


Limited Liability Company –

• The advice of an experienced business attorney can save a business owner from regretting a hasty decision when forming a company for their business.

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• Many people have read about LLC’s and they just assume that this will be a good form of business for them. In fact, the LLC has many advantages, but it also has disadvantages and limitations.

Limited Liability Company ( LLC )Limited Liability Company ( LLC )


Corporation –

• What are your short term and long term plans for your business? How many owners or investors do you expect to have? Where should it be incorporated and why? These questions should be a topic of discussion with an experienced business attorney by any business owner who is serious about his business.

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• A corporation can take many forms. There are many advantages to structuring a business as a corporation, but there are also reasons that it would not be a good idea to use the corporate form of business.


• C Corp – the default version of a corporation.• S Corp – an option that must be exercised by the owner of a new C Corp within a limited period of time.• LLC – the popular name used for limited liability companies.• LP – the name often used for limited partnerships• LLP – the name often used for limited liability partnerships• GP – the name often used for general partnerships.


d/b/a – the abbreviation for a form of business known as “doing business as”. Did you know that you have more than one decision to make about how and where to file the papers for your d/b/a? Did you know that you don’t have to be the owner of your d/b/a, and that you can use a d/b/a in conjunction with another type of business entity to allow more flexibility in your business?


• Where do you file the papers to start a particular kind of company?• What papers do you need to file? • Where should your business be located? • Does it matter? • Are you safe just reading about this on the Internet, or do you need some real legal advice? Too often it seems that we are contacted by a business owner who has serious problems that could have been avoided if they had sought and received the advice of an experienced business attorney when they started their business.


Call Houston business attorney Lee Solomon at The Solomon Law Firm, P.C. today to schedule a time to meet and discuss your business needs.

Houston


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