When starting a business, choosing the right entity is one of the first and most important decisions to make. A partnership is one of the most popular companies and, according to the Internal Revenue Service, there are more than 3.7 million business partnerships in the United States. However, partnership is not a single entity, but rather a generic term that refers to a number of different business structures. Below, you`ll find an overview of three of the most popular types of partnerships in Texas and the differences between them. A corporation is a legal entity with the characteristics of limited liability, centralization of management, indeterminate duration and ease of ownership portability. The owners of a company are called "shareholders." The people who manage a company`s business and business are called "administrators." However, Crown corporation law requires shareholders to enter into shareholder agreements to eliminate directors and provide for shareholder management. Choosing the best management structure for your business is a decision you make with the advice of a lawyer. The secretary of state can`t help you. Limited liability company: To limit the liability of its partners, a general or order company may choose a limited partnership. The Secretary of State provides a registration form as a limited partnership. Online registration is filed through SOSDirect. The limited liability company (LLC) is not a corporation or a corporation, but a type of stand-alone business that has the powers of both a corporation and a corporation. Depending on how the LLC is structured, it can be compared to a general limited liability partnership or limited partnership, in which all owners can freely participate in management and all have limited liability, or an "S" corporation without the ownership and tax restrictions imposed by the internal income code.
Unlike partnership, where the key element is the individual, the essence of the limited liability society is the unit that requires more formal requirements for its creation. 1 William D. Bagley - Phillip P. Whynott, The Limited Liability Company, No. 2.10, (2d ed. 2d Rev. James Publishing, 1995). Ending the partnership. Under Texas law, the following events lead to the "liquidation" of a partnership: 1) the expiry of a term or the conclusion of the commitment covered in the partnership agreement; (2) voluntary decision on the implementation of the partnership; (3) the events described in the partnership agreement as a liquidation obligation; (3) an event that makes it illegal to continue the partnership; or (4) a court decision requiring the liquidation of the partnership.
See Texas Business Organizations Code Section 11.051; 11.057. If the partnership was for fixed purposes or for a fixed term, voluntary liquidation must be subject to the agreement of all parties. See Texas Business Organizations Code 11.057. On the other hand, if the partnership was not for a specified duration or obligation, only a majority decision is required to terminate voluntarily. See Texas Business Organizations Code 11.057. Without the parties` contrary agreement, the death or resignation of a partner does not end the partnership. A general partnership is essentially the most fundamental and easy type of partnership to form. A company that has two or more people working in a profit association can be considered a partnership, each person being called a compleoder. Although Texas law does not require the development of a partnership agreement for a general partnership, it is generally a good idea to have a partnership.