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Dallas Business Law Blog

Will Noncompete Agreements Become A Thing Of The Past?

Nationwide, businesses have used noncompete agreements to prevent former employees from turning into competitors. Many consider these agreements critical to maintaining their position in a marketplace that is already highly competitive. However, there is a legislative tide turning and state legislatures, as well as some employers, around the country are beginning to question this practice. Will Texas be far behind?

An LLC Does Not Completely Eliminate Risk Of Personal Liability

One of the key reasons individuals form limited liability companies (LLC) is to protect themselves from personal liability. However, business owners should never assume that by creating this type of business entity they have no risk of personal liability for their actions. A recent case decided by the Texas Supreme Court on February 23, 2018 highlights this fact.

Lack of proper licensure can create a legal mess

New business owners have many legal actions and decisions to make. Unfortunately, during the early days of running a company, many business owners forget the importance of licensure.

Most owners know about the general business license, but the government also regulates a variety of industries. As such, the government uses licensure to make sure that businesses practice legitimately. License and permit requirements also protect consumers from harm.

As an LLC member, signatures matter

Each limited liability company (LLC) has its own structure, comprised of one, a few or many investors and decision makers. Like any other enterprise, different members have different roles while representing the larger body together.

When representing the company, it’s essential to make it clear that actions are for the LLC. Signing a business contract with just a member’s name is a legal risk because it opens a possibility to conflating the individual with the business. One of the primary reasons why people form an LLC is to separate personal and business assets.

Creating a viable succession plan for your family business

Ensuring business continuity should be given just as much thought as other business strategies, but it is often put off or overlooked. According to the U.S. Small Business Administration, less than 30 percent of small business owners have a formal succession plan. Given that 90 percent of U.S. businesses are family owned and less than 15 percent succeed to the third generation, the importance of a succession plan cannot be overstated.

 

Forming a Limited Liability Company and Federal Tax Filing Consequences

The limited liability company (LLC) form of business organization is extremely popular and provides many advantages to its members. The benefits of this form of organization includes limited liability for its owners (known as members) and the avoidance of the double taxation which afflicts corporations. Members can also participate in the management of the entity without losing limited liability protection. With the large proliferation of this form of business organization across the United States the federal tax filing consequences of the LLC are also important to consider.

A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, and you should check with your state if you are interested in starting a Limited Liability Company.

Owners of an LLC are called members. Most states do not restrict ownership, and so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit "single-member" LLCs, those having only one owner.

A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state's requirements and the federal tax regulations for further information. There are special rules for foreign LLCs.

Does A New LLC Need An Operating Agreement?

When forming a limited liability company (LLC), business partners often wonder whether they really need a written operating agreement. At the outset, they may feel like they are all on the same page, so putting it in writing in an operating agreement seems like an unnecessary expense. However, this single document could prevent costly partnership disputes that may arise later, and the beginning is the perfect time to create one.

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