Limited Liability Company

 

Texas created more than 69,000 limited liability companies in 2007 alone. This is a staggering number compared with other states. While the growth of LLCs has been increasing in all states, the increase in Texas has been much greater.

Consider that Texas is a big state, popular for entrepreneurs. Texas lawmakers have been careful to concentrate on steadily improving the laws for business organizations every year. They do this to be certain the limited liability company continues to be simple and flexible enough to assist all small businesses.

TEXAS STATUTES ADDRESS FINANCIAL LIABILITY PROTECTION

The biggest reason to use an LLC in Texas is for personal asset protection. Section 101.114 of the Texas BOC laws state that unless otherwise provided in the company agreement of an LLC, a member or manager is not liable for the debts, obligations or liabilities of an LLC merely because such person is a member or manager.

A sole proprietorship offers none of this protection. A sole proprietor places the personal assets of an owner at risk for any legal action that could require payment or restoration of funds to the customer or business partner.

By using a State of Texas LLC, you manage that risk effectively and protect yourself from financial liability risks.

A SINGLE OWNER (VS. MULTIPLE OWNERS) CAN FORM A TEXAS LLC

According to Section 101 of the Texas Business Organizations Code only one member is required to start an LLC. On the other end of the spectrum, a relatively large corporation with many owners can form a State of Texas LLC. Texas law is very accommodating in this area.

LLC VARIATIONS IN TEXAS

Texas laws, specifically Sections 1-5 of the Texas statutes are unique in that they recognize several types of businesses specifically. One of these is the basic, traditional domestic LLC, the most common form of business incorporation for standard small business.

A Professional LLC is the type used for incorporating legal, medical, or other professional services. Non-profit LLC statutes apply to charitable or other not for profit organizations.

IN SUMMARY

Texas businesses and the entrepreneur seeking an ideal location will find it in Texas, a state that has provided excellent business conditions for an LLC type corporation. Texas provides a very progressive and accommodating business environment, especially for small businesses.

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