Choosing between a corporation and an LLC for your Texas start-up

Choosing between a corporation and an LLC for your Texas start-up

| May 27, 2021 | Business Law

One of the top concerns for new start-ups in Austin, Texas, is deciding which business entity will best meet your needs. As with any business-related legal matter, choosing your entity requires careful consideration.

Unfortunately, many new entrepreneurs have not taken much time to learn about business law in the state. This post will discuss the benefits of both a Limited Liability Company (LLC) and a corporation to help you make the best decision.

What are the benefits of a corporation?

Many entrepreneurs choose a corporation entity for their start-ups because they offer several valuable benefits. Four examples of these benefits include:

  1. Corporations may attract more investors and customers or clients.
  2. In most cases, it is not hard to transfer ownership of a corporation.
  3. You can issue or sell stocks with a traditional corporation.
  4. Corporations allow you to offer your employees incentives that keep them on the job.

If you want more information about corporations, consider asking a business law attorney for additional guidance before making your choice.

What are the benefits of an LLC?

Start-up owners often select an LLC as their business entity, especially if they are new business owners. Four benefits associated with an LLC include:

  1. They are easy to create and require little ongoing maintenance.
  2. LLCs protect your personal assets from liability if legal problems arise.
  3. You can avoid some of the costly tax issues that accompany corporations.
  4. LLCs provide owners with flexibility in choosing how to structure management.

Selecting a business entity is only one of many critical considerations for start-ups. Partnering with a firm experienced in Texas business law can play a valuable role in ensuring the success of your new start-up. Such a partnership also helps you avoid any legal obstacles that may arise to block your way forward.