Texas Limited Liability Companies: On the Rise
Post by: Lesley Hempfling
Limited Liability Companies seem to be the entity of choice for the majority of people establishing new businesses in Texas these days. In fact, there were 110,876 Certificates of Formation for LLCs filed with the Texas Secretary of State last year. There were less than 30,000 filings for other types of for profit entities. Why have LLCs become so popular in the business and estate planning worlds? Relatively speaking, these entities are easy to create, provide flexibility on the operational front, liability protection for members and manager and LLCs enjoy "flow through" federal income tax treatment. Finally, the personal property interest that the member owns in the LLC is more easily transferred at death where Buy-Sell or Transfer provisions of the Company Agreement are adequate. For instance, if the LLC owns real estate rather than an individual member owning real estate, at the death of that member there is no need to draft and file new deeds for the transfer of that real estate - the LLC still owns it. The deceased member's heirs or beneficiaries simply inherit an interest in the LLC.