Dallas-Fort Worth Business Formation Attorneys

Helping You Get Your Business off the Ground in Texas & the U.S.

When beginning a business, you must decide what form of business entity to establish. Your form of business entity determines which income tax return form you will file and provides specific legal protections.

The most common forms of business entities are:

• Sole proprietorship
• Partnership
• Corporation
• S corporation
• LLC corporation

Because we are helping clients with new inventions, trademarks, and patents, our firm sees many new businesses. Some are second or third businesses who now have fewer problems after having learned lessons the hard way. Many people seek our guidance to develop an invention by applying for a patent or because they have just been sued.

There are a few major business formation mistakes we see over and over. We strive to ensure that our clients can avoid the predictable and disastrous results that come with them. If you are ready to get your business up and running, seek legal representation and advice from the Dallas Fort Worth business attorneys at Norred Law, PLLC.

Business entities protect the owners of a company from personal liability. A person may begin the patent process without a business entity, but as soon as you have protectable intellectual property, you have something of value that makes you a target of lawsuits. Whether it is a simple new baby bottle or the name of a new business that someone else might be using, this property is at risk if you do not have a business entity.

By using a business entity, you provide a layer of protection against these lawsuits. That protection comes in handy if someone else decides that you are using a name that is too close to theirs or if a major customer decides that your product caused an expensive problem.

Business Entities for New Small Businesses

The business entity of choice for new small businesses tends to be a limited liability company, usually referred to as an “LLC”. But this is not always true; in some situations, based on the company’s ownership, a limited partnership or a corporation may be better. Our experienced Dallas-Fort Worth business formation attorneys can help you determine which entity is right for your new small business.

Helping You Develop a Written Operating Plan

While business entities protect business owners from outside suits, business owners use operating plans to control internal relationships.

Operating plans are contractual documents that establish:

• Lines of management
• The responsibilities of each owner
• Methods of ownership change
• Financial practices

Entities that do not have a written operating plan experience a much higher rate of internal strife and business failure.

We often see businesses that are failing because they were created by family members with no written contract between the owners. This might be two brothers, an aunt and a niece, or even forty-year friendships established between high school locker mates. In all these cases, Norred Law, PLLC has had to represent individuals in lawsuits that were the direct result of a missing document that would have eliminated the dispute by putting the understanding between them on paper.

Allow our team to help you develop a written operating plan so that you can avoid future problems.

What Is A PLLC?

PLLC stands for Professional Limited Liability Company. It is a type of business that is specifically for licensed professionals such as lawyers, doctors, architects, and accountants who wish to form a limited liability company (LLC) but they are subject to licensing requirements and professional regulations.

Owners (or members) of a PLLC are personally liable for their own professional negligence or malpractice. However, if there is more than one member of a PLLC, one member cannot create liability for the rest of the members. There is a layer of protection for each member.

What Is The Difference Between An LLC And PLLC?

Within an LLC (limited liability company), anyone can be an owner or member of the business, whereas a PLLC must only have professionals or at the very least have a certain number of members that must be licensed professionals. Otherwise, in regard to flexibility in management and taxation, LLCs and PLLs are the same.

There are no restrictions when it comes to the number and type of members an LLC or PLLC may have and both do not have their own federal tax classification. They may adopt the tax status of sole proprietorships, partnerships, S corporations, or C corporations. They may also take advantage of “pass-through” taxation, which means they do not pay corporate taxes. Instead, income and expenses pass through members’ personal tax returns and they pay personal income tax on profits.