Q: What type of business entity should I form?
A: There are several to choose from, including LLCs, LLPs, C corps, S corps, and non-profits (501c3). You may review the information on the Texas Secretary of State’s website, or consult with a qualified business attorney, to find the one that meets your needs.
Q: Do I need to be a U.S. citizen or Texas resident to form a business in Texas?
A: Texas law does not place restrictions on who may enter business contracts, except that they must be of sound mind. Some entities may wish to place citizenship or residency requirements into their formation documents, so it may be best to consult the IRS, or your attorney.
Q: Will filing a certificate prevent others from using my business name?
A: No. Filing your formation papers with the Secretary of State only prevents the acceptance of a subsequent filing with the same name, but this does not necessarily protect your intellectual property. This is best handled by an IP attorney.
Q: Can one person be the owner, director, and shareholder of a corporation?
A: Under Texas law, for-profit corporations must have a director, president, and secretary, and one single person may perform all of these duties. A non-profit entity, however, must have at least three directors, a president, and a secretary, and one single person may not be all the above.
Have a different question? Reach out to Tim Sutherland today!