Texas Limited Liability Companies (LLC)
A Texas corporation is created by filing a Certificate of Formation with the Texas Secretary of State.
A limited liability company (LLC) is a type of organization that combines some of the benefits of a corporation and some of the benefits of a partnership--although it is neither a corporation nor a partnership.
An LLC can be structed in a few different ways, all of which provide limited liability (like a corporation) if the rules are strictly followed. It can be structed to operate similar to a general partnership, a limited partnership, or an S Corp, but without the special ownership and federal tax restrictions applied to a corporation.
Instead of owners being "shareholders" (as in a corporation), owners of a limited liability company are called "members."
Under Texas law, a member can be an individual person, partnership, corporation, trust, or any other type of legal or commercial entity. In most cases, each member's liability for the company is limited to his or her own investment in the company. Members may also get the benefit of pass-through tax treatment under United States law similar to the partners of a partnership. Under United States tax classification rules, an LLC enjoys structural flexibility and beneficial tax treatment.
The management structure of a limited liability company must be declared in the certificate of formation filed with the Texas Secretary of State. That management structure is determined by the LLC and its members. A limited liability company may either designate managers to mange the company, or it may be managed by the members generally.
The Texas limited liability company (LLC) lawyers at the Law Office of Derek R. Van Gilder can recommend the LLC structure and management structure that is best for your specific business. We can also prepare all legal forms and documents required by the Texas Secretary of State, and file them on your behalf.