Austin Business Formation & Structuring Lawyer

Serving Throughout the State of Texas

Starting a business involves several steps, and selecting the right legal structure is one of the most critical decisions to make from the start. The type of entity chosen will affect issues such as liability, taxation, governance, and long-term flexibility. At Flores, PLLC, we help business owners and entrepreneurs in Austin and Texas statewide with practical legal advice and professional assistance in business formation, ensuring they establish a legal foundation that aligns with their goals.

Whether launching a startup, expanding an existing business, or entering a joint venture, our Austin business formation & structuring lawyer provides strategic counsel to ensure compliance with Texas law while optimizing operational efficiency and risk management.

Choosing the Right Business Structure

Texas law authorizes several types of business entities, each with distinct advantages and legal implications. The right choice depends on factors such as the number of owners, liability concerns, taxation preferences, and future growth plans. Below are some of the most commonly used corporate structures in Texas.

Sole Proprietorship

A sole proprietorship is the simplest business structure, where a single individual owns and operates the business. While easy to set up, sole proprietors are personally liable for all business debts and obligations. This structure is often used by freelancers, consultants, and small-scale entrepreneurs who do not require liability protection.

General Partnership (GP)

A general partnership consists of two or more individuals who share ownership of a business. Each partner contributes capital, skills, or labor and shares in the profits and losses. However, general partners are personally liable for the debts and obligations of the business, making it a riskier structure without proper legal agreements in place.

Limited Partnership (LP)

A limited partnership includes both general partners, who manage the business and assume full liability, and limited partners, who invest in the business but have no management authority and limited liability. This structure is commonly used for investment ventures, real estate holdings, and businesses where passive investors seek to limit their exposure to financial risks.

Limited Liability Partnership (LLP)

A limited liability partnership provides protection against personal liability for business debts and the actions of other partners. This structure is ideal for professional services firms such as law practices, accounting firms, and medical groups, where partners want to shield their personal assets from business-related liabilities.

Limited Liability Company (LLC)

A limited liability company combines the liability protection of a corporation with the favorable tax treatment of a partnership. LLCs are highly popular among small to mid-sized businesses because they offer limited personal liability, pass-through taxation, and fewer compliance requirements compared to corporations. Texas law allows single-member and multi-member LLCs, making them a flexible choice for various business ventures.

Corporation (C-Corp and S-Corp)

Corporations are separate legal entities that provide strong liability protection to their owners, known as shareholders.

C-Corporation (C-Corp): A C-Corp is subject to double taxation, meaning the corporation pays taxes on its profits, and shareholders pay taxes on dividends. However, this structure allows for unlimited growth potential through stock issuance and is often preferred by larger businesses seeking investors.
S-Corporation (S-Corp): An S-Corp avoids double taxation by passing income, losses, and deductions directly to shareholders. However, it has restrictions on the number and type of shareholders, making it a better option for smaller businesses.

Professional Entities (PLLC and PC)

Texas law allows professionals such as lawyers, doctors, and accountants to form specialized business entities:

Professional Limited Liability Company (PLLC): A PLLC offers limited liability protection while allowing licensed professionals to operate under a structured business entity.
Professional Corporation (PC): A PC functions similarly to a standard corporation but is designed for licensed professionals, offering tax benefits and liability protection.

Factors to Consider When Selecting a Business Entity in Texas

Choosing the right business structure involves evaluating several key factors, including most importantly:

Liability Protection: Some entities, such as LLCs and corporations, shield owners from personal liability, while sole proprietorships and general partnerships expose owners to financial risks.
Tax Treatment: Certain structures allow for pass-through taxation, avoiding corporate-level taxes, while others, like C-Corps, face double taxation.
Operational Flexibility: Corporations require strict formalities such as shareholder meetings and board governance, while LLCs and partnerships offer more flexible management structures.
Ownership and Investment Needs: If raising capital or issuing stock is a priority, corporations provide more options than LLCs or partnerships.
Regulatory Compliance: Some businesses require licensing, annual reporting, and other regulatory obligations that may impact the choice of entity.

Business Formation Services at Flores, PLLC

At Flores, PLLC, we guide clients through every step of the business formation process, ensuring compliance with Texas law and positioning businesses for long-term success. Our services include:

Advising on entity selection based on business goals and risk tolerance
Drafting and filing formation documents, including Certificate or Articles of Organization or Incorporation
Preparing operating agreements, partnership agreements, and corporate bylaws
Obtaining federal and state tax identification numbers (EIN)
Advising on regulatory and licensing requirements specific to various industries
Structuring multi-state and cross-border business operations, particularly between Texas and Mexico

Supporting Texas Businesses Beyond Formation

Choosing the right entity is just the beginning. As businesses grow and evolve, their legal needs become more complex. Our firm provides ongoing legal counsel on corporate governance, contract negotiation, compliance matters, and strategic transactions to support long-term success.

At Flores, PLLC, our Austin business formation attorney is committed to helping businesses lay a strong foundation and navigate the complexities of corporate law with confidence. Contact us today to discuss your business formation needs in Austin, Texas, and statewide, and learn how we can help you build a structure that supports growth and minimizes risk.