Forming an entity can have many benefits for a small business owner. Separating and Protecting personal assets is the one most commonly mentioned. However there are other benefits as well.
Having a business entity can make it easier to take in other owners. It can also be beneficial to separate different aspects of a service or product provided by the business into separate companies. This can make marketing more focused, and make bookkeeping and accounting more accurate and easier.
Business entities are regulated by state law. In Texas the most common choices are corporations limited partnerships and limited liability companies. Each type of entity has specific advantages and requirements.
The cost of includes fees to the state and also may include legal fees if an attorney is involved.
A business attorney can help you decide which into the formation is best for your company now and for the long term, prepare and file the paperwork, give you instructions about the requirements that you will need to meet on an ongoing basis to keep your entity and compliance and up-to-date.
You can’t just “file it and forget it”. You will need to be sure that you are aware of the ongoing and yearly requirements to keep taxes, filings and business records up-to-date.