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Should you form an LLC?

On Behalf of | Sep 27, 2023 | Business Formation

According to the U.S. Census Bureau, in August 2023, 466,163 businesses filed applications in Texas. The state has a lot to offer new companies, which accounts for the many applications. When you decide to take that step and open your business, before filing an application, you must first determine what your business formation will be.

Many entrepreneurs consider forming a Limited Liability Company due to its flexibility and liability protection. But is this the right choice for your situation? Looking into the characteristics of this option can help you decide.

Limited liability

One of the primary reasons entrepreneurs choose to form an LLC is the liability protection it offers. As a business owner, you generally have protection for your personal assets from business debts and lawsuits if you have an LLC.


LLCs provide flexibility in management and operations. You can choose to manage the LLC yourself, elect a manager or even have members participate in decision-making. This adaptability allows you to structure your business to fit your specific needs.

Taxation options

By default, an LLC is a pass-through entity, meaning that business profits and losses pass through to the individual members’ tax returns. However, you can also elect for taxation as a corporation if that better suits your financial goals.

Fewer formalities

While an LLC provides many of the benefits of a corporation, they have fewer formal requirements. You will need to file articles of organization with your state and pay the necessary fees. However, you do not need a board of directors, annual meetings or complex record-keeping. This simplicity can save you time and reduce administrative burdens.


An LLC can enhance your business’s credibility, as it often signals professionalism and a commitment to long-term success. This can be particularly advantageous when seeking financing or attracting customers and partners.

Forming an LLC can be an excellent choice for many businesses, but you should carefully consider your business’s unique needs and goals before making a decision.