In Texas, a limited liability company may consist of a single owner, two partners or many owners. These owners are known as members. For tax purposes, an LLC operates more like a partnership than a corporation in that members in most cases report profits and losses on their personal income tax returns. There is no federal tax on the LLC itself, and tax returns must be filed on the business as a corporation, a sole proprietorship or a partnership. There may be advantages to filing returns as an S-Corp.
Texas residents interested in running their own company may wish to know about some of the potential dangers of starting an Internet business. Due to the number of fraudulent business opportunities that are present, any proposal that is received should be carefully reviewed.
Writing a business plan is a crucial step for those contemplating opening a new business in Texas. A business plan allows entrepreneurs to organize their marketing strategies, and such a document will often be required by banks or outside equity investors before financing is approved. However, writing a business plan should not be looked upon as a task that can be forgotten once completed, and there are a number of situations that may call for it to be reevaluated and updated.
There are several factors to consider when selecting a business structure in Texas such as the ease of transfer of ownership interests, continuity, management and tax liability. The most common structures are limited liability companies, corporations, general partnerships and sole proprietorships.