|
Texas LLC - Why Form a Texas LLC -
Limited Liability Company
|
|
Personal
Asset Protection. First and foremost the
reason one would want to operate ones business
as a Texas LLC is for personal asset protection.
A Texas LLC is a legal entity that exists independently
of its owners or its shareholders. This means
that should the company be sued the owners and
shareholders are protected. Someone can not
go after your personal assets should the company
assets not be sufficient to cover the claim.
Contrast this with a company that is a sole
proprietorship or partnership - in both cases
creditors can go after personal assets.
|
Liability
for Debt:
The Texas LLC cannot pass liability or the reponsibility
for debt onto its owners or shareholders should it
find itself in debt or unable to fullfil a claim or
lawsuit. This is not the case with for a sole-proprietorship,
a limited-partnership, or a general partnership, where
the owners and shareholders are ultimately responsibile
to meet the companies obligations should there be
a shortfall.
Texas
LLC Distinctions: One must be careful if the Texas
LLC has only one owner in that it will be considered
a sole proprieratorship ( with no tax benefits ) if
one does not elect it to treat it as a corportation.
Similarily if two or more owners are involved it automatically
will be determined to be a partnership unless one
elects to trea is as a corportation. Elect to use
Form 8832 (PDF), Entity Classification Election otherwise
the default classification will apply.
Check
with your LLC specialist for more particulars.
|
