Limited Liability Companies

When deciding on a business entity, there are many options to choose from in Texas. The Limited Liability Company (LLC) is a relatively new entity that combines the advantages of a corporation and a limited partnership. If you are considering forming a business and want a flexible option, the LLC may be the ideal choice for you.

What is an LLC?

As its name suggests, the LLC is a business entity that protects its owners from liability. By having “limited liability”, the owners of the company do not have to put their personal assets at risk for any business losses that the LLC may incur. This is the main characteristic that the LLC and the corporation have in common.

Unlike a corporation, however, an LLC is not subject to double taxation. Typically the profits of a corporation are taxed once, then the dividends that are passed on to shareholders are also taxed. An LLC is subject to pass-through income taxation, meaning that the profits of the business are not taxed until they have been passed on as income to the members of the LLC.

Choosing an LLC

An LLC is an ideal business type for small businesses that want increased flexibility in their business decisions. An owner or small group of owners can form an LLC and have all of the benefits of a partnership without putting themselves at personal financial risk. If you are considering forming a business in Texas, you should consult with an experienced business formation professional to determine which type of entity is right for your needs.

Contact Us

To learn more about Limited Liability Companies and other types of business entities in Texas, contact the Austin business lawyers of Slater, Kennon & Pugh Ltd.LLP today at 512-472-2431.