Chase & Walls PLLCFindLaw IM Template2026-06-07T02:25:10Zhttps://www.chasewallslaw.com/feed/atom/WordPress/wp-content/uploads/sites/1600755/2020/09/cropped-site-icon3-32x32.jpgOn Behalf of Chase & Walls PLLC<![CDATA[What documents do you need to form a business in Texas?]]>https://www.chasewallslaw.com/?p=486502026-06-07T02:25:10Z2026-06-07T02:25:10ZStarting a business in Texas requires more than a great idea. The documents you file and maintain can determine your legal protections from day one.
The foundational filing: certificate of formation
Every formal business entity in Texas begins with one document. LLCs file Form 205 and corporations file Form 201 with the Texas Secretary of State. This filing officially establishes your business as a legal entity under state law. Without it, your business does not exist in the eyes of the state.
Your EIN from the IRS
Once your entity is formed, you need an Employer Identification Number. The IRS issues this number at no cost through its online application. Your EIN functions as a federal tax ID for your business. You will need it to open a business bank account and to hire employees.
Internal governance documents
Texas does not require you to file an operating agreement or corporate bylaws with the state. However, these documents matter more than many new business owners realize. Under Texas Business Organizations Code § 101.052, an LLC without a written company agreement is automatically governed by the state's default rules. Those defaults control how profits are split and how management decisions are made. Corporations follow a similar framework under TBOC § 22.102. The key internal documents vary by structure:
Operating agreement: Governs an LLC's ownership shares, profit distribution and management roles.
Corporate bylaws: Sets board meeting rules, officer duties and voting procedures for corporations.
Partnership agreement: Defines each partner's responsibilities and share of profits.
Each document should reflect the specific terms your business needs, not the state's generic defaults.
Local and tax registration
Depending on how you operate, you may need additional registrations. If your business sells taxable goods or services, you must obtain a sales tax permit through the Texas Comptroller of Public Accounts. If you use a trade name different from your legal entity name, Texas law requires you to file an Assumed Name Certificate with your county clerk.
Ready to move forward?
The documents above form the foundation of a legally compliant Texas business. An attorney can help you understand which filings apply to your specific structure and industry. Speaking with an attorney may also clarify how state default rules could affect your business if your internal documents are missing or incomplete.]]>On Behalf of Chase & Walls PLLC<![CDATA[Common contract mistakes Texas businesses make]]>https://www.chasewallslaw.com/?p=486492026-03-11T23:55:29Z2026-03-11T23:55:29ZYour contracts shape how your business operates and how disputes unfold. Small drafting errors can create expensive problems under Texas law.
Vague scope and unclear payment terms
You may assume both sides understand the deal. Texas courts enforce contracts based on their plain language. If terms lack detail, a judge may rely only on what is written. Common drafting gaps include:
Vague scope of work: No clear deliverables deadlines or milestones.
Unclear payment terms: Missing due dates late fees or calculation methods.
No Texas venue clause: Failure to require Texas governing law and venue.
Each of these issues can increase dispute risk. Clear definitions reduce room for conflicting interpretations.
Relying on verbal agreements
Texas law requires certain contracts to be in writing. Under the Texas Business and Commerce Code § 26.01, some agreements are unenforceable unless signed in writing. Agreements that must be in writing include:
Contracts exceeding one year: Agreements that cannot be performed within 12 months.
Real estate transactions: Sales of land or leases longer than one year.
Large loans: Loan agreements over $50,000.
Sale of goods: Goods priced at $500 or more.
If you rely on a handshake for these deals, you may lose the ability to enforce the contract.
Auto-renewals and weak termination clauses
Automatic renewal clauses can lock you into long commitments. Many contracts require 60 to 90 days notice to cancel. If you miss that window, the agreement may renew for another term.You should also define breach procedures. A strong contract outlines notice requirements, cure periods and termination rights. Without these steps, disputes escalate faster and cost more to resolve.
Business structure and IP oversights
Texas businesses sometimes form Series LLCs without the required statutory language in the Certificate of Formation. They also fail to maintain separate books and operational distinctions for each series. These errors can compromise liability segregation.Intellectual property creates similar risk. If your contract does not clearly assign ownership of work product inventions or branding, you may not secure the rights you intended to obtain.
Why involving a business attorney is recommended
Contract mistakes often happen at the drafting stage. Once a dispute arises, your options may narrow and costs may increase.A business attorney can review your agreements for compliance with Texas law. Early legal review may help you clarify obligations, strengthen enforceability and reduce long term exposure.]]>On Behalf of Chase & Walls PLLC<![CDATA[3 types of insurance to protect those starting new companies]]>https://www.chasewallslaw.com/?p=486482025-12-08T15:12:44Z2025-12-08T15:12:44Z1. Liability coverage
There are several types of liability coverage that can diminish the risk involved in running a business. Those starting professional practices as educated professionals may want to carry error and omissions coverage in case they commit significant mistakes while assisting their clients.
Companies that manufacture products may need to carry product liability insurance and even recall insurance. Retail establishments and restaurants, as well as other companies that are open to the public, may need to carry premises liability coverage. These policies help protect against claims that an organization caused injuries or financial harm to others.
2. Business interruption insurance
Operating a company generates certain recurring expenses. Business leaders pay for rent or cover loan payments if they purchased real property for the company. They must pay worker salaries and cover the cost of employment benefits, such as health insurance contributions.
Business interruption insurance coverage can help companies cover routine costs when the business must cease operating temporarily. Business interruption insurance can help new and growing companies survive temporary hardship without accruing a huge amount of debt.
3. Employer insurance policies
Texas does not force private employers to carry workers’ compensation insurance, but doing so can be a wise decision. These mandatory policies help indemnify a company if a worker gets hurt on the job. Employers may also need to pay into unemployment in case they must lay off workers with little notice.
Appropriate insurance coverage can protect entrepreneurs from unexpected financial hardship. Working with an attorney during the business formation process can help entrepreneurs make the right choices, including the selection of the right type of policies and adequate coverage amounts.]]>On Behalf of Chase & Walls PLLC<![CDATA[Limiting risks during the business formation process]]>https://www.chasewallslaw.com/?p=486472025-09-12T12:58:08Z2025-09-12T12:58:08ZCreating a comprehensive business plan
Simply having an excellent idea isn’t enough to create a profitable company. Entrepreneurs need to have a thorough business plan in place. They need to look into the market to determine how much it might cost to offer the goods or services they intend to provide. They also need to explore what competition exists and how they can differentiate themselves from those existing businesses.
The business planning process can sometimes help people recognize that their concepts are unlikely to generate enough revenue to support a company. Entrepreneurs often need help developing a plan that takes a concept and turns it into a money-generating enterprise.
Forming the right type of business
There are many different business entities that entrepreneurs can form based on their plans for the company. Many entrepreneurs choose limited liability companies (LLCs). Others might form partnerships or might establish corporations.
Details, including the five-year plan for the business and the potential degree of liability involved in operations, may influence the right structure to establish for a new company. Entrepreneurs may need support as they analyze their options and follow the appropriate procedures to establish their selected entity type.
Obtaining insurance and licenses
Many professions require state licenses. Entrepreneurs need to ensure that they personally comply with state law and that their business also meets all of the necessary requirements to operate in a specific sector.
Additionally, those starting new businesses typically need to evaluate options for insurance coverage. There are many different types of business policies available, from product liability insurance to business interruption coverage. Appropriate insurance can help to limit the risk of an entrepreneur facing personal liability in the future and can also potentially help them cover business expenses under certain circumstances.
Entrepreneurs often need assistance minimizing their exposure during the business formation process. Obtaining guidance as early as possible can help entrepreneurs limit their exposure.]]>On Behalf of Chase & Walls PLLC<![CDATA[What are the basics of business contracts?]]>https://www.chasewallslaw.com/?p=486462025-06-12T13:39:17Z2025-06-12T13:39:17ZWhen it comes to running a business, contracts are a fundamental part of your operations. They set expectations, define obligations, and protect your interests. Understanding the basics of business contracts can help you avoid legal disputes and ensure smoother business transactions.
Understanding a business contract
A business contract is a legally binding agreement between two or more parties. These parties could be individuals, companies, or organizations. The contract outlines each party’s responsibilities, the terms of the agreement, and the consequences if those terms are not met. Contracts can cover everything from employment agreements to vendor services, intellectual property agreements, and sales transactions.
Key elements of a business contract
For a contract to be legally enforceable, it must contain several essential elements. First, there must be an offer and acceptance – one party proposes the terms, and the other accepts them. Second, both parties need to provide something of value, known as "consideration." Third, all parties must have the legal capacity to enter into the agreement. Finally, the contract must have a legal purpose. If the contract violates the law, it is not valid.
Common types of business contracts
There are many types of contracts that businesses use, depending on their operations. Some common types include:
Sales agreements: These outline the terms of selling goods or services.
Employment contracts: These set the terms for hiring employees.
Partnership agreements are also a type of business contract. These define the relationship between business partners.
Why business contracts matter
Business contracts offer protection by setting clear expectations and providing a legal framework in case of disputes. A well-drafted contract can prevent misunderstandings, offer clarity on financial terms, and help manage risks.Understanding business contracts and knowing how to create them is an important part of running a business. With the right agreements in place, you can protect your interests and avoid costly legal issues.]]>On Behalf of Chase & Walls PLLC<![CDATA[The role of due diligence in business purchases]]>https://www.chasewallslaw.com/?p=486442025-03-20T16:41:53Z2025-03-20T16:41:53ZDue diligence plays a key role when buying a business in Texas. It's the process where you thoroughly investigate the company you're interested in to ensure you make an informed decision. Without this, you might end up inheriting hidden problems that could affect the future success of the business. Here's what you need to know about due diligence in business purchases.
Understanding due diligence
Due diligence is more than just reviewing financial statements. It involves examining all aspects of the business, from its legal structure to its operational practices. You'll look at the company’s financial health, legal issues, and any potential liabilities. This process ensures you're aware of what you're buying, preventing any surprises after the deal is done.
Key areas to investigate
Several important areas must be addressed during due diligence. Financial records, including balance sheets and profit-and-loss statements, give insight into the company's stability. You should also review contracts, leases, and intellectual property to understand any obligations or restrictions tied to the business. Don’t forget to assess the business's reputation, employee relations, and any ongoing legal matters that could affect the purchase.
Why due diligence is important
Without thorough due diligence, you could end up purchasing a business that’s not as profitable as it seems. It helps you avoid overpaying or acquiring a company with significant hidden debts or legal issues. This process also gives you a clearer idea of the business’s future potential and whether it's worth the investment.Due diligence protects you by ensuring the business you’re buying is what it appears to be. If you uncover issues, you can either adjust the terms of the deal or walk away. This process helps you make a confident, informed decision rather than taking unnecessary risks. Ensure you fully understand the business you’re purchasing before finalizing the transaction.]]>On Behalf of Chase & Walls PLLC<![CDATA[5 Tips for merging company cultures effectively]]>https://www.chasewallslaw.com/?p=486432024-12-27T16:49:17Z2024-12-27T16:49:17ZMerging two companies is about more than just combining money and operations. One of the hardest parts is bringing together different company cultures.
Businesses face unique problems when merging cultures, and solving these issues can make the process easier.
1. Recognize cultural differences
When companies merge, employees often have different values, work habits, and expectations. These differences can cause misunderstandings, lower morale, and conflicts. To fix this, companies should acknowledge these differences early and encourage open communication to set common goals and values.
2. Manage employee worries and morale
Mergers can make employees feel uncertain about their jobs and how things will change. Texas employment law requires employers to communicate clearly about changes, which helps ease fears and build trust. Offering rewards or support during the transition can also help you keep key employees.
3. Align workplace policies
Companies usually have different rules about work hours, benefits, and procedures. During a merger, these differences can confuse or upset employees. To fix this, businesses should review and combine policies to follow Texas employment laws. Explaining these changes clearly can make the transition smoother.
4. Handle conflicts fairly
Disagreements are common when combining cultures. They might happen because of perceived unfairness. Setting up a clear process to solve conflicts can help address these problems. Giving employees a way to share concerns ensures fairness and avoids bigger issues.
5. Build a unified culture
The main goal of merging company cultures is to create a new, unified workplace that matches the goals of the combined organization. Hosting activities like team-building events or workshops can help employees work together and close gaps.
Starting strong
Successfully merging company cultures takes good planning. By addressing differences early and listening to employee concerns, companies can create a happy and productive workplace for the future.]]>On Behalf of Chase & Walls PLLC<![CDATA[How can a startup protect trade secrets during formation?]]>https://www.chasewallslaw.com/?p=486422024-09-16T14:37:34Z2024-09-17T14:36:37ZWhen starting a business, protecting intellectual property (IP) is essential to ensuring success. IP includes logos, inventions, trade secrets, and more. Taking steps to secure these assets early can help prevent competitors from stealing ideas or using proprietary materials without permission.
Register trademarks and copyrights
One of the first steps is to register trademarks for the business name, logo, and slogan. Trademarks protect the brand’s identity, preventing others from using the same or similar names and logos. Business owners should also consider copyrighting any original content, such as written material, images, and designs. Copyright protection allows the owner to take legal action if anyone uses their work without permission.
File for patents
If the business is developing new inventions or products, applying for patents is crucial. A patent gives the business owner exclusive rights to their invention, stopping others from making, selling, or using the product. Patents also add value to the company by protecting its most innovative ideas.
Use non-disclosure agreements
During the formation process, business owners often work with employees, contractors, or partners. To protect trade secrets and other confidential information, owners should have these parties sign non-disclosure agreements (NDAs). NDAs legally bind individuals to keep certain information private, reducing the risk of leaks or misuse.
Monitor intellectual property rights
Even after registering IP, business owners need to keep an eye out for potential infringements. Regularly checking for unauthorized use of trademarks, copyrights, or patents is important. Taking swift legal action when someone violates these rights helps prevent more serious issues down the road.Taking these steps early in business formation can prevent costly legal battles and protect the company’s most valuable assets, ensuring long-term success.]]>On Behalf of Chase & Walls PLLC<![CDATA[Can you get out of a bad business contract?]]>https://www.chasewallslaw.com/?p=486402024-06-27T21:03:38Z2024-06-27T21:03:38ZWhen business deals sour, it's natural to seek an exit strategy. In Texas, navigating the legal landscape of contract disputes requires careful consideration of state laws and contractual obligations.
Understanding contractual obligations
Before charting your course out of a problematic contract, it’s essential to grasp the intricacies of the agreement at hand. First, review the contract thoroughly to understand each party's rights and responsibilities. It’s also important to determine if the other party has violated the contract terms. Finally, evaluate the impact of the breach on your business.
Legal grounds for contract termination
Knowing when you can end a contract is extremely important if you are stuck in one you don't like. For example, if one party fails to meet its responsibilities as stipulated in the contract, it constitutes a breach and provides grounds for termination.Additionally, both parties can agree to terminate the contract if circumstances change or if it no longer aligns with their interests. If one party signs a contract because the other person lied to them, the contract might not count because of the lie. That's called fraud or misrepresentation.
Steps to terminate a contract
If you want out of a contract, you need to follow some steps and talk openly to solve the problem. Carefully examine the terms and conditions outlined in the contract to understand the grounds for termination and any associated penalties.You may also find it helpful to open a dialogue with the other party to discuss the possibility of terminating the contract mutually. Document all communications for future reference.In the complex world of business contracts, finding a way out of a bad deal means thinking carefully about the law and talking openly with the other person. Understanding your rights and seeking professional guidance can pave the path to contract termination. Don't let a contract stop you; it is important to understand what steps you can take and take action to protect your business.]]>On Behalf of Chase & Walls PLLC<![CDATA[Arranging the sale of a business]]>https://www.chasewallslaw.com/?p=486342024-03-28T21:22:40Z2024-03-28T21:22:40ZPreparation and valuation
Before listing your business for sale, it is important to thoroughly prepare and understand the value of the business. This involves gathering all necessary financial documents, such as balance sheets, profit and loss statements and tax returns. Valuing the business accurately ensures both parties have realistic expectations and can negotiate from a position of knowledge.
Finding the right buyer
Finding the right buyer can make or break the deal. Sellers should seek buyers who are financially capable and have a genuine interest in the business. Networking, industry connections and business brokers can help facilitate this process.
Negotiation and due diligence
Negotiation plays a large role in determining the terms of the sale or purchase. Both parties must agree on price, payment structure, assets included and any contingencies. During this phase, thorough due diligence is necessary. Furthermore, sellers should be transparent and provide all necessary information.
Drafting the agreement
Once the parties involved agree upon the terms, it is time to draft a comprehensive agreement outlining the terms and conditions of the sale. This includes the purchase price, payment schedule, transition plan, non-compete clauses and any warranties or representations. The agreement should be clear, precise and legally binding to protect both parties' interests.
Closing the deal
Closing the deal involves finalizing all paperwork, transferring ownership and completing any remaining tasks outlined in the agreement. This may include transferring licenses, leases, permits and notifying employees, customers and suppliers of the change in ownership. Clear communication and coordination are helpful in ensuring a seamless transition.
When sellers understand the process, they can confidently navigate the sale of a business effectively, maximizing their chances of a successful transaction and achieving their desired objectives.]]>