Why Freelancers Should Consider Formation of a LLC in Texas
Are you a freelancer in Texas? In today’s “gig economy” a lot of people work full-time as a freelancer or moonlight for extra cash. The fact is that there are many reasons that compel people to work as a contractor. Despite that, many fail to really consider some potential legal exposure that may come from working in this capacity.
By not forming a LLC, you could be missing out on the benefits of a simple legal structure for your business. Forbes has recommended that freelancers use a limited liability company to protect themselves and fortunately formation of a LLC in Texas can be accomplished both quickly and economically.
Aside from the fact that forming a business is a simple process, there are many other good reasons why entrepreneurs or freelancers should choose to with a LLC in Texas. A limited liability company aligns with many business ventures so if you’re interested, keep reading to find out why you should consider formation of a LLC for your new business.
Why Form a LLC in Texas
One of the benefits of formation of a LLC in Texas is right in the name — Limited Liability Company. It can help to limit your personal liability by in effect setting up a “wall” in between your business and you. Think of this as your “liability wall.” Provided that you maintain the corporate formalities of existence during the conduct of your business this may shield you from personally being liable for things that may be asserted or threatened against your business. Other business entities can also provide this “wall” of protection but a LLC in Texas is an efficient business structure that is relatively easy to maintain from an administrative view. As a good business owner, the LLC protects your personal assets while you conduct daily business operations in pursuit of growth and profit.
If you’re freelancing right now without a business structure the bad news is that the law sees your business as an extension of you. This basically means that if your business gets into trouble, your car, home, investment portfolio and all other personal assets could be at risk. Maybe you’re a software engineer, an artist, or a craftsmen… in performing your daily work, assuming you don’t operate as a formal business under something like a LLC, then you’re exposed to potentially avoidable legal risk.
A LLC in Texas can help provide some peace of mind. Limited liability companies effectively protect your personal assets from the reach of business creditors and others that might seek to extract value from your business through litigation or other threats.
Setting up and Maintaining your LLC in Texas
Setting up a LLC can be less onerous than forming a corporation or other business structure. And administratively it can be less burdensome to maintain. Once your certificate of formation is filed with the Texas Secretary of State you should also have figured out the Operating Agreement for your LLC in Texas as well as produce your organizational minutes. Your Operating Agreement will address any special agreements among the Members and your Organizational Minutes will among other things establish your authority to open a bank account and obtain an EIN from the IRS. You will also receive additional correspondence from the Texas State Comptroller’s Office that will assign your Texas taxpayer ID and provide some direction with respect to your filing obligations in Texas
An experienced Texas corporate attorney can advise and assist you in your effort to get a clean launch for your Texas LLC. They’ll give you expert advice on the right tax structure for your business.
Note: I am not licensed to provide tax advice. That’s a different specialty.. However, I can probably point you in the right direction!
Looking to Form an LLC in Texas?
Now that you have a little information on the benefits of forming your LLC in Texas for your new business, you’re ready to start the process.
If you’re ready to get started on forming your business, get in touch with an experienced business lawyer in Texas and form your LLC in Texas today.