The State of Texas formed over 69,000 new limited liability companies in 2007 alone. This number is staggering. While every state has generally been experiencing LLC formation growth, the Texas increase is much more significant than others.
Now, Texas is a large state and a popular one for entrepreneurship. But, the TX lawmakers have focused on consistently improving the Texas LLC laws every year (called the TX LLC Act) to ensure that the limited liability company remain simple enough yet flexible enough for any small business in the state.
LIABILITY PROTECTION IS EXPLICITLY ADDRESSED IN THE TEXAS STATUTES
The biggest reason to use an LLC in Texas is for personal asset protection. Section 101.114 of the Texas LLC Act state that unless otherwise provided in the company agreement, a member or manager is not liable for the debts, obligations or liabilities of an LLC merely because such person is a member or manager.
This is not the case with a sole proprietor business. Without this protection, you are placing yourself and your assets at risk for business. Entrepreneurship can bring you financial freedom but it is not without risks. You can manage most of that risk through the use of a State of Texas LLC.
Because of this protective TX LLC Law, it is musch easier for a business owner to get this protection when operating in this state.
ONLY ONE MEMBER IS REQUIRED TO START A STATE OF TEXAS LLC
Section 101 of the Texas LLC Act confirms that only one member is required to start one of these. There are no limits or caps on the number of members under the TX Act so this entity can handle everything from the solo owned business to the large complex business with hundreds of owners.
Solo owned businesses represent that largest number of businesses in Texas. Once the Texas LLC Act confirmed that a limited liability company may be owned by only one member, many sole proprietors organized one to get legal protection and the other benefits.
TYPES OF LIMITED LIABILITY COMPANIES ALLOWED IN TEXAS
Unlike other states, the Texas LLC Act specifically address different types of possible limited liability company vehicles available in the state (Sections 1-5). These include the traditional domestic company which is the primary choice for a standard small business. But there is also the Professional company that is often used to render licensed professional services such as law or medicine. Then there is the non-profit choice for charitable, benevolent and other nonprofit activities.
Because this kind of legal entity can handle many different types of organizations, it has become even more popular than other entities.
The business community has clearly seen the benefits of this unique legal entity as evidenced by the number of new ones formed every year. Given the massive benefits and the low costs to form one, the State of Texas LLC will continue to be chosen over other alternatives when it comes to starting a Texas business.
And, every Texas business owner who uses one of these can rest assured that TX LLC laws will only become better for them each year.
For a FREE Guide about the State of Texas LLC [http://www.texasbusinessformation.com/state_of_texas_llc.htm] or a Free Texas Name Search, visit Texas Business Formation, provider of the 3 Business Day LLC Formation Service: [http://www.texasbusinessformation.com]
Article Source: http://EzineArticles.com/expert/Amy_McDaniel/226345
Article Source: http://EzineArticles.com/2040682