Are you looking to form a partnership between your local business and a non-profit organization in Central Texas? If so, it is important to understand the different types of business entities available and the restrictions that may apply. The Office of the Secretary of State provides general information about the types of business organizations in Texas, but for personalized assistance, it is recommended to consult a private lawyer. Texas law does not restrict who can form or have a stake in the ownership of a business entity, other than requiring that the organizer be a person capable of entering into a contract. An entity can impose residency or citizenship requirements on its training certificate or other government documents, if it so wishes.
For information on restrictions that might apply to the entity you are creating, consult your lawyer or the IRS. The Texas Business Organizations Code does not impose any age requirement on who can be the owner, officer, or director of a business entity. The entity can impose requirements on its certificate of incorporation or other regulatory documents, if it so wishes. Other laws may impose restrictions and there may be problems related to the child's ability to contract or own an entity with a license to sell alcoholic beverages.
Public limited companies, LLCs and LPs are formed by submitting a certificate of incorporation to the Secretary of State. Corporations are owned by shareholders, managed by a board of directors and managed by officers. LLCs are owned by members and are managed by members, managers, or both. An LP is a partnership of one or more limited partners and one or more general partners.
For more information, see Choosing a Business Structure. Each of these entity structures protects their owners from personal liability for the debts and obligations of the entity and can offer tax advantages that are not available to sole proprietorships and partnerships. Each of these entities must also pay Texas franchise taxes. The Secretary of State cannot determine which entity would be best for any individual situation. A private lawyer can help with that determination. If you want to organize your entity as a corporation or LLC and you are going to provide professional services, you may be asked to form as a professional entity.
Associations are not subject to the same restrictions on the provision of professional services. The Secretary of State has created a guide for determining the types of entities allowed (PDF). However, please note that the guide is not a substitute for the advice of a private attorney and is subject to change without notice at any time. Subject to the limitations set out in article 301.012 of the BOC, as amended by H, B., certain restrictions, limitations, and reporting requirements apply to such jointly owned professional associations. The doctor or physician assistant interested in this option is recommended to consult with a private attorney to ensure that all legal requirements are met. The Texas Code of Business Organizations requires that for-profit corporations and professional corporations have at least one director, one president and one secretary.
A single natural person can be the president, the secretary, the sole director and the sole shareholder. In the case of a non-profit corporation, the Texas Business Organizations Code requires that a non-profit corporation have at least three directors, a president and a secretary; however, in a non-profit corporation, the same person cannot be both the president and the secretary. In both for-profit and not-for-profit corporations, officers and directors must be natural persons. A member of an LLC is a person who has an ownership interest or membership in the LLC. An LLC will always have at least one member, but the affairs of the LLC can be managed or governed in two ways.
First, the LLC can be governed by its members as a whole. In this situation, each member has management authority. An LLC with this type of management structure is often referred to as a member-managed LLC. Second, the LLC can choose to have a separate group of managers to manage the affairs of the LLC. The directors of an LLC may or may not be members.
Your certificate of incorporation must specify how the LLC will be managed. The Secretary of State cannot help you make this determination. If you are not sure what is the best management structure for your LLC, you can consult with your private lawyer. Table showing the requirements for landlords, government persons, and officials of professional entities in Texas. In general, every company must protect its own intellectual property and good will. The submission of a training certificate only prevents the Secretary of State from presenting a subsequent training certificate for an entity whose name determines that it cannot be distinguished in the records. The Secretary of State recommends that you consult a private lawyer on trademarks, service marks, and other intellectual property issues.
Under the provisions of sections 31,005 and 181,004 (a) of the Texas Financial Code, certain words in titles are prohibited from being used as part of an entity's name without authorization from Banking Commissioner before they can be used as part of an entity's name. Receiving this letter will allow applicants to submit certain requests to the Secretary of State. In conclusion, forming partnerships between local businesses and non-profit organizations in Central Texas requires understanding different types of business entities available as well as any restrictions that may apply. Consult with your private lawyer for personalized assistance when selecting an appropriate business structure.