Frisco & Plano Corporate Law Attorneys: Corporate Formation
There are a number of legal structures you can use when setting up a business. Incorporation is a popular choice and you’ll find DIY incorporation forms on the internet that purport to be all you need to get the job done.
But the whole purpose of creating a business entity through incorporation is to protect business owners from liability. If these documents are done incorrectly, you could lose that benefit. Spend a little time and money up front to protect your business and financial interests and gain the protection you wanted.
The Frisco and Plano corporate law attorneys at Albin Roach urge you to involve a lawyer early in the process of incorporating your business. With legal help you can avoid costly mistakes down the road and get the personal liability protection you desire. Call our office at 214-430-4440 to schedule an appointment.
Corporate Tax Structures
Different types of corporations, and entities such as LLCs, are taxed in different ways. When our corporate lawyers meet with you, we will gain an understanding of your goals for your business. We can then explain the advantages and disadvantages of each type of corporation and its tax implications so you can select the right entity for your business needs.
Here are a few examples:
- C Corporation (C Corp) — IRS recognizes a C Corporation as a separate taxpaying entity and taxes its profits when earned, and also taxes shareholders who receive dividend distribution. The industry sometimes refers to this as “double taxation.” There are steps you can take place from the outset to avoid this consequence.
- S Corporation (S Corp) — A special S Corp tax status avoids double taxation. Profits and losses pass directly to you as the owner, so you are responsible for taxes on the income. The company itself does not pay taxes because it does not earn a profit.
- B Corporation (B Corp) — A new type of corporation that seeks not only to make a profit but also to produce other significant benefits to its stakeholders and the community.
- 501(c)(3) Corporation — Nonprofit organizations receive crucial tax breaks. However, your charity must abide by IRS rules to receive and maintain nonprofit status. Our lawyers help your charity comply with tax codes so you can apply donations as intended.
Steps to Forming a Texas Corporation
We can guide you through each step of incorporating a business in Texas, as well as explain in layman’s terms the purpose and effect of each step, including:
- Choosing the appropriate entity
- Organizing the management structure
- Drafting bylaws and incorporation documents
- Filing a corporate certificate with the Texas Secretary of State
- Applying to the IRS for a federal employment ID number (EIN)
- Obtaining licenses and permits
- Purchasing workers’ compensation insurance
- Ensuring compliance with government regulations, including labor, immigration and environmental
- Creating Buy-Sell options and formulas in the entity formation documents
- Creating and implementing a business succession plan
- Crafting employment contract for key employees that include non-compete clauses
We can assist with other functions vital to the success of start-up company: drafting contracts, protecting intellectual property, negotiating a commercial lease or buying liability insurance. In short, we give you our experience and advice so that you can avoid problems, and understand what and why you are doing certain things.