These are the 2 most common business entities in Texas. Both are formed by filing a certificate with Secretary of State of Texas. They can also be formed in other states.

The corporation is considered a new legal “person” or entity. As a result it can enter into contracts, sue and be sued, and pay its own taxes.

The corporation has 4 aspects that make it unique:

Free transferability of interest – the shares of stock can generally be bought and sold without the advance consent of other shareholders
Limited liability – when a shareholder makes an investment in a corporation, that investment is the total liability that can exist. The shareholder can lose his investment, but cannot be liable for more. Compare that to a general partnership, where partners do have unlimited liability for debts of the partnership.

Centralized Management – The shareholders elect a board of directors which board is responsible for the general business operations. The Board of Directors will then elect officers to handle the day-to-day business and the officers will hire employees and agents.

Unlimited Life – the corporation will continue to exist until its termination by the shareholders by filing a certificate of termination with the Secretary of State.

The LLC [Limited Liability Company] is considered a combination of a corporation and a partnership, having many similaries to a corporation such as:

Members – analogous to shareholders

Managers – analogous to directors

LLCs have the main benefit of tax treatment: it allows for pass-through tax treatment for the members for Federal income taxes without certain restrictions of classes and number of shareholders.

Other business entities that the Law Office of Gregory E. Turley handles are:

Limited Partnerships. This partnership has certain characteristics of both a corporation and an LLC. To be a limited partnership, there must be at least one general partner, which is often a corporation or an LLC. The limited partnership is commonly used in a family setting (a Family Limited Partnership).