By Shirley Harris There are various types of business structures. They include sole proprietorship, general partnership, limited liability...
There are various types of business structures. They include sole proprietorship, general partnership, limited liability company (LLC), limited liability partnership, C Corporation, and Sub-chapter S corporation. An entrepreneur has to make a decision on the kind of structure to opt for. He can settle for Limited Liability Company. If he is in the US, he will need to decide on the state of incorporation. This can be Texas. Each state has its own unique rules and regulations relating to incorporation. There are steps that have to be followed in relation to Texas LLC formation Houston TX.
Finding a common vision is a vital step in LLC formation. A company needs to have mission and vision statements. Shareholders have to agree on where they want the company to be after a particular period of time. If shareholders have different visions for the company, success will be an illusion. A common vision is required even if shareholders have different personalities.
Creating a company name is another important step. If a group of like minded individuals have come together and they have agreed to start a company and they have a common mission and vision, then they will need to name their company. This is the name that will be used in the day to day business operations of the firm.
A name search process must be done. This will be done online. A small fee must be paid to do the name search. After a suitable name has been identified, it should be booked. This will prevent another person from taking that name. A business does not need to be incorporated after the name has been registered. Incorporation can even happen months later.
Finding a registered agent is a crucial step. The agent will receive correspondence on behalf of the shareholders. Actually, the shareholders can be too busy to deal with the day to day running of the company. The agent needs to have an address where all the correspondence will be forwarded to. This must be a physical address and not a P. O. Box address.
Every shareholder must be involved in the step of creating the Articles of Organization. This a core document in a firm. It will need to be drafted and filed with the Registrar of Companies in Houston. This document contains the most basic information about a Limited Liability Company. At the top of the document, the business name is indicated.
Another document to be drafted is operating agreement. This will have information on the operational aspects of the company. If an operating agreement is lacking, disagreements will be common. The shareholding of each shareholder will be clearly specified. The process of dispute resolution must be indicated. How to share profits and losses of the company must be clearly explained.
There are pros and cons associated with LLC formation. Limited liability companies enjoy the benefit of limited liability. That means that a shareholder cannot be held individually liable for the debts of the company. For the case of partnerships and sole proprietorships, there is unlimited liability because the business and the business owners are one single entity. Companies also have tax benefits.
Finding a common vision is a vital step in LLC formation. A company needs to have mission and vision statements. Shareholders have to agree on where they want the company to be after a particular period of time. If shareholders have different visions for the company, success will be an illusion. A common vision is required even if shareholders have different personalities.
Creating a company name is another important step. If a group of like minded individuals have come together and they have agreed to start a company and they have a common mission and vision, then they will need to name their company. This is the name that will be used in the day to day business operations of the firm.
A name search process must be done. This will be done online. A small fee must be paid to do the name search. After a suitable name has been identified, it should be booked. This will prevent another person from taking that name. A business does not need to be incorporated after the name has been registered. Incorporation can even happen months later.
Finding a registered agent is a crucial step. The agent will receive correspondence on behalf of the shareholders. Actually, the shareholders can be too busy to deal with the day to day running of the company. The agent needs to have an address where all the correspondence will be forwarded to. This must be a physical address and not a P. O. Box address.
Every shareholder must be involved in the step of creating the Articles of Organization. This a core document in a firm. It will need to be drafted and filed with the Registrar of Companies in Houston. This document contains the most basic information about a Limited Liability Company. At the top of the document, the business name is indicated.
Another document to be drafted is operating agreement. This will have information on the operational aspects of the company. If an operating agreement is lacking, disagreements will be common. The shareholding of each shareholder will be clearly specified. The process of dispute resolution must be indicated. How to share profits and losses of the company must be clearly explained.
There are pros and cons associated with LLC formation. Limited liability companies enjoy the benefit of limited liability. That means that a shareholder cannot be held individually liable for the debts of the company. For the case of partnerships and sole proprietorships, there is unlimited liability because the business and the business owners are one single entity. Companies also have tax benefits.
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