The entity structure you choose today may shape your liability protection, tax obligations, and growth potential for years to come. Get it right from the start.

Strategic Entity Formation for Austin Entrepreneurs

You have the idea, the drive, and the vision. Now you need the legal foundation to make it real. The decisions you make when forming your business—what type of entity, how it will be structured, who has authority—will follow you for years. In choosing what type of entity to form, business owners should consider liability protection, tax flexibility, and expectations that potential investors and partners may have. Giving little thought to these considerations may result in personal exposure of business owners, operational headaches, or costly restructuring down the road.

The Kumar Law Firm PLLC helps entrepreneurs and business owners form limited liability companies, for-profit and nonprofit corporations, partnerships, and other entities. We guide you through the formation process and ensure your business starts on solid legal footing. An Austin business formation attorney at the Kumar Law Firm PLLC may help provide personalized guidance based on your specific situation.

Why Choose The Kumar Law Firm PLLC

A the Kumar Law Firm PLLC, we do not believe in a “one size fits all” approach. Rather, we provide personalized business formation services to Austin entrepreneurs and business owners. We offer a unique approach to advising business clients based on our prior experience and legal expertise, including:

Tailored counsel that meets your needs and protects your best interests
Evaluation of your company and goals to determine the best business structure to meet your needs
Real-world experience from attorney Sanjeev Kumar, who took his own company public on NASDAQ, and attorney Kirsten Kumar, who was involved in the Austin startup scene, prior to their legal careers
Attorneys with firsthand insight into the practical needs and priorities of early-stage businesses
A focus on long-term relationships to provide you with ongoing legal advice for your growing business

We take time to understand your goals and guide you to the entity structure that best supports them. Our formation packages include both the necessary and recommended documents and filings to get your business started properly.

Choosing the Right Entity Structure

The entity structure you choose may affect personal liability protection, management flexibility, ability to raise capital, and long-term exit options. Most Texas businesses form as limited liability companies (LLCs) or corporations. Each structure has distinct characteristics that make it better suited for different situations.

For example, LLCs combine liability protection with operational flexibility. These entities often work well for small businesses and companies that want pass-through tax treatment without the corporate formalities. Corporations, on the other hand, may offer more structured governance and may be better suited for venture-backed startups planning significant outside investment. The Kumar Law Firm PLLC can help clients understand the practical implications of each option.

Limited Liability Company Formation

Forming a Texas LLC requires filing a Certificate of Formation with the Texas Secretary of State. The Texas Secretary of State business filings page provides official forms, but proper formation involves more than simply filing paperwork.

While Texas does not legally require a written operating agreement, it is generally prudent for an LLC to have an operating agreement to reduce ambiguity in the event a dispute arises and govern internal affairs according to the members’ specific intentions rather than statutory defaults. This document may address ownership percentages, profit and loss allocation, management authority, voting procedures, and what happens when owners want to leave or new owners join, among other corporate matters. The Kumar Law Firm PLLC drafts company agreements tailored to your specific needs.

Corporation Formation

Texas corporations are also created by filing a Certificate of Formation with the Texas Secretary of State. A newly formed corporation also generally creates bylaws that govern corporate operations. Corporations generally have a more formal structure than LLCs with shareholders, directors, and officers. This clear hierarchy generally works well for businesses planning to raise investment capital or eventually go public.

Generally, corporations must hold annual meetings, maintain minutes, and observe corporate formalities to preserve liability protection. The Kumar Law Firm PLLC may help corporations establish proper governance procedures and maintain ongoing compliance.

Partnership Structures

Although less rare than LLCs or corporations, partnerships come in several forms, including general partnerships, limited partnerships, and limited liability partnerships. Each has different implications for liability and management and different filing and compliance requirements.

Partnership agreements define the rights and obligations of each partner. Without a written agreement, Texas default rules apply, which may not match your intentions. The Kumar Law Firm PLLC prepares partnership agreements that reflect the actual understanding between partners.

Initial Setup Requirements

Beyond entity formation, new businesses often need to complete several additional steps, including but not limited to:

Obtain an Employer Identification Number from the IRS.
Open a business bank account to keep personal and business finances separate.
Register with state and local authorities for permits or licenses that may be required for particular business activities.
Create initial resolutions documenting organizational decisions.

Proper documentation from the beginning helps to protect your liability shield and prevent problems later. The Kumar Law Firm PLLC provides comprehensive formation packages to assist with this endeavor.

Ongoing Compliance

Texas entities must maintain their status through ongoing compliance. This includes filing annual reports when required, maintaining a registered agent in the state of Texas, keeping business records organized, and observing entity formalities. Failure to maintain compliance can result in administrative dissolution, loss of liability protection, or other undesired results.

The Kumar Law Firm PLLC helps businesses stay compliant with ongoing requirements. We provide guidance on what records to maintain and what formalities to observe based on your entity type and business activities.

We Are Here to Help You with Your Startup and Business Formation in Texas

Your business idea deserves more than a DIY or “one size fits all” formation kit. The structure you choose, the documents you create, and the compliance habits you establish from day one will shape everything that follows—from how you protect your personal assets to how you attract investors and eventually exit.

At the Kumar Law Firm PLLC, we bring decades of business and legal experience—including firsthand entrepreneurial knowledge—to help Austin startups and growing companies build the right foundation. Contact the Kumar Law Firm PLLC to discuss forming your Texas business.

Frequently Asked Questions

How long does it take to form a Texas LLC or corporation?

The Texas Secretary of State typically processes filings within a few business days. Additional time may be needed to prepare governing documents and complete other formation steps.

Do I need a lawyer to form a business?

While the Texas Secretary of State permits individuals to file formation documents themselves, working with an attorney ensures your entity is properly structured with governing documents that protect your interests and support your goals.

What is the difference between an LLC and a corporation?

LLCs offer more flexibility in management and profit allocation with fewer formalities. Corporations have a more structured governance model with shareholders, directors, and officers. The right choice depends on your specific situation and goals.