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Business Formation

Start Your Business the Right Way

Choosing the right business structure in Texas is a big decision and our knowledgeable attorneys can guide you with careful planning.

Bussiness Formation Attorneys When choosing the right business structure it is important to consider all the implications of each business entity option such as liability, tax consequences, formality of operation, and management preferences.

The different types of businesses have different levels of risk against them in terms of their owners’ personal assets being at stake if there’s a lawsuit or bankruptcy, so selecting the right legal structure for your business can make all the difference in how successful it will be. At The Parra Law Firm, we can help guide you through the process for a secure foundation for your business journey.

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Which Type of Business Entity in Texas Is Right for You?

We understand what makes each type of entity unique so we can find with you which option best suits your situation. It’s not all about how you’re going to pay taxes or what type of corporate structure will be easiest for you; it also depends on who owns the business in question, as well as which form would give more advantages when dealing with employees.

Generally, businesses are created and operated in one of the following structures: Sole Proprietorship, General Partnership, Limited Partnership, Limited Liability Partnership, Corporation, and Limited Liability Company (LLC). These business entities can be broken down into two basic categories: Filing Entities and Non-filing Entities.

Filing Business Entities in Texas The Limited Partnership

As filing entities, the Limited Partnership structures are formed by filing a Certificate of Formation for a Limited Partnership with the Texas Secretary of State. It is the first stage above the General Partnership in terms of liability protection, meaning that limited partners are legally protected from the debts or obligations of the business.


Corporations are probably the most well-known business structure in Texas and the United States. These types of businesses are viewed as separate entities from the owners and allow them to sue and be sued, to hold property, and are required to pay taxes separately from the owners. To form a Corporation it is necessary to file a Certificate of Formation for a For-Profit Corporation or a Certificate of Formation for a Nonprofit Corporation depending on its purpose.

Limited Liability Company

This Business entity allows owner(s) to limit personal liability in the finances of the company, as well as some tax advantages as the business’s net income is passed through to the owner(s) who report it on their personal income forms. To run your business as an LLC it is required to file a Certificate of Formation with the Secretary of State.

Non-filing Business Entities in Texas The Sole Proprietorship

If you are looking to start a small business and want something that requires little paperwork or planning, forming a sole proprietorship may be for you! In order to establish this type of company there’s no need for state filing; as long as your legal name isn’t already taken by another person who has previously established their own single ownership enterprise within Texas. If it does happen that someone else also claims themselves under this category before they form theirs, they’ll have to file what’s known as Doing Business As (DBA).

The General Partnership

At its core, the general partnership structure has the most similarities with the sole proprietorship. In order to form this business entity, you only need to start working with your partner or partners. In addition, unlike LLCs or corporations, there are no formation fees or ongoing maintenance fees related to filings like annual reports. However, the lack of personal asset protection allows your creditor to pursue your personal assets if your business is sued.

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