Business Formation

For most small businesses in North Texas, an LLC provides the best starting point: personal liability protection, flexible management, and pass-through taxation with minimal formalities. If the business is profitable and the owner works in it full time, adding an S-Corporation tax election can reduce self-employment tax obligations. A C-Corporation is typically reserved for businesses seeking venture capital or planning to go public. The right answer depends on your specific goals, industry, and tax situation — which is why a consultation with an attorney and CPA at the formation stage is worth the investment.

The Texas Secretary of State charges a $300 filing fee to form an LLC (Certificate of Formation). Professional registered agent services typically cost $50 to $150 per year. Attorney fees for formation vary based on the complexity of the operating agreement and any additional documents needed, such as buy-sell agreements or assignment of pre-existing intellectual property. Online formation services may appear cheaper, but they produce generic documents that may not protect you in the situations that actually arise. An attorney-drafted formation package is a one-time investment that can prevent far more expensive disputes down the road.

Yes. Even for single-member LLCs, a written operating agreement reinforces the legal separation between you and the business — an important factor if a court ever considers whether to pierce the corporate veil. A single-member operating agreement also establishes what happens to the business upon your death or incapacity, which is critical for estate planning. Without it, your business's future may depend on Texas default rules that were not designed with your situation in mind.

To operate under a trade name in Texas, you must file an Assumed Name Certificate (DBA) with the county clerk in every county where you transact business. For entities (LLCs, corporations), the certificate must be signed by an authorized representative and notarized. The filing fee varies by county — typically $15 to $25 per county. You must also file a new certificate every ten years to keep the registration current. If you plan to operate in multiple counties across the DFW metroplex, you will need a separate filing in each one.

Yes. You can form a new Texas LLC and transfer your business assets and contracts into it. The conversion is not automatic — you need to formally organize the LLC, obtain a new EIN from the IRS, update business licenses and permits, notify clients, and reassign contracts (which may require the other party's consent). Any intellectual property, domain names, and real estate should be formally transferred into the entity. Our attorneys guide North Texas business owners through this transition to ensure the new entity is properly established and the liability protection is real.

An S-Corporation is a federal tax election, not a separate entity type. An LLC or corporation can elect S-Corporation treatment by filing IRS Form 2553 within 75 days of the beginning of the tax year in which the election is to take effect (or within 75 days of formation for a new entity). The election allows business income to pass through to shareholders' individual returns, but more importantly, it permits owners who work in the business to pay themselves a reasonable salary and take additional profit as distributions not subject to self-employment tax. For profitable businesses, this can reduce the owner's annual tax burden by several thousand dollars or more.

The Texas franchise tax (also called the margin tax) applies to most business entities that do business in Texas, including LLCs. Entities with total annualized revenue at or below the no-tax-due threshold (currently $2.47 million) owe no franchise tax but must still file a Public Information Report annually. For entities above the threshold, the tax rate is 0.75% of taxable margin for most businesses and 0.375% for retail and wholesale businesses. Sole proprietorships and certain general partnerships are exempt. Even if your LLC owes no tax, failure to file the annual report can result in forfeiture of the entity's right to do business in Texas.

Yes. WG Law forms and advises businesses throughout North Texas, including McKinney, Frisco, Plano, Allen, Prosper, Celina, Anna, Princeton, and the greater Dallas-Fort Worth metroplex. We handle entity selection, LLC and corporation formation, operating agreements, DBA registrations, registered agent arrangements, S-Corporation elections, and coordination with your CPA for tax planning. We also help existing businesses update or correct their formation documents when gaps or errors are discovered.