Business Law Dallas TX: Should Your Startup be a Partnership or LLC?

Business Law Dallas TXBusiness law Dallas TX helps startups and existing businesses protect their ideas and finances. An experienced law firm helps you determine what type of business you should form. For many startups, a corporation may be too complicated, and going it alone as a sole proprietorship is too time-consuming. Forging a limited liability corporation (LLC) or general partnership can be the answer for many new businesses.

Business Law Dallas TX: The Difference between an LLC and a Partnership

Forming your business as a corporation or LLC protects your personal finances. A limited liability corporation (LLC) requires fewer initial filings to start business, and has more flexibility. LLC owners fill out a profit and loss statement on their personal income taxes. The LLC is not a separate entity, like a corporation. However, LLC owners are shielded from liability for claims and debts incurred by the business–this is known as “limited liability.” If the business faces a lawsuit, only the business assets can be used to pay off the claim, not the owner’s personal assets. The plaintiff can’t receive profits from the sale of the owner’s car, house or other possessions, unless it’s proven that the owner acted illegally or unethically.

A general partnership is the most easily structured co-owned business. A partnership consists of two or more owners without corporation or LLC status. The members of a business partnership are personally liable for debts or claims unless they are given limited partner status in the business filing. This means a creditor can receive a partner’s house, car or other possessions to fulfill the payment of a debt. A partnership is a “pass-through” entity, which means the business itself doesn’t pay taxes. Instead, the business owners pay taxes for the business on their personal income tax forms. The partners must make quarterly estimated tax payments each year. Partners don’t legally need a written agreement to go into business, but it is in the best interests of both parties to contact a business lawyer Dallas TX and create a document clearly stating partnership contributions and responsibilities. This protects both partners should problems arise. 

Business Law Dallas TX: Why You Need Professional Legal Advice for Your Startup

A business law firm writes and files documents to cover all the aspects of your new business. Taxation, business structure, partner responsibilities, debt payments and other concerns are addressed in the agreement written by a lawyer. This saves businesses time, money, and possible legal problems down the road due to mistakes or omissions in business set-up.

Contact Simon | Paschal for help with business law Dallas TX. Our firm offers legal advice and agreements for both startups and existing businesses. Call us today at 972-893-9340 or fill out the contact form  on our website.

[osky-citation keyword=”Business Law Dallas TX”]Photo Credit: Gajus-Images

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