O'Toole Atwell, PC Serving Clients In Texas & Colorado For OVER 20 Years
Business & Commercial Litigation
Phone 512-475-4740
Our Practice Areas

Avoid these common business formation mistakes

There's a lot on your mind when starting a business, so it's not out of the question that you'll overlook an important detail. Before you do anything, it's critical to learn more about proper business formation.

Here are five mistakes that many new business owners in Texas have made before you:

  • Choosing the wrong business type: You have many options, including LLC, C Corporation, S Corporation, partnership and sole proprietor. There are pros and cons of all these entities, so make sure you carefully consider which one is best.
  • Skipping this step: Yes, you're in a hurry to get down to business, but doing so before you legally form a company is a big mistake. This may not harm you now, but it will hold you back in a variety of ways in the future. For example, neglecting to form a company may put your personal assets at risk in the event of a lawsuit.
  • Forming a business in the wrong state: Sometimes this is straightforward, but, other times, it's difficult to decide where to incorporate. This typically comes into play if you have locations in different states.
  • Neglecting to maintain compliance: It's one thing to form a corporation, but another thing entirely to maintain compliance as the days go by. For example, you're required to keep personal funds and business funds separate. There are also a variety of tax requirements to meet.
  • Neglecting to change: Even though it can be a time-consuming process, you have the right to change business types in the future. For instance, an LLC may have been best when starting your business, but you now realize that a C Corporation makes more sense. Don't hesitate to compare your options once a year (or more often) to decide if it makes sense to change.

With so much on your plate, it's easy to overlook the importance of properly forming the right type of business entity. It's just as easy to put no time into the process, assuming that every business type is similar.

Once you make the right choice and have everything in place, it's much easier to confidently turn your attention to other areas of your business.

Visit our website for more information on how to form a business, among related details.

No Comments

Leave a comment
Comment Information
5 Star Review

Passionate, professional, and caring! Brian did a great job representing me!
Jana ODonnell

  • Super Lawyers Brian J. O'Toole | SuperLawyers.com
  • Board Certified Texas Board of Legal Specialization | Brian J. O'Toole - Civil Trial Law
  • Austin Bar Association
  • Texas Bar Foundation
  • Supreme Court of the State of Texas
  • United States District Court | District of Colorado
Email O’Toole Atwell, PC

Make Your Appointment Today

Our main office is located in Austin, Texas, and we serve clients throughout Texas and Colorado. Contact us today at 512-475-4740 or online to find out how we can put personalized service to work for you in your legal matter.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

O'Toole Atwell, PC
919 Congress Avenue, Suite 535
Austin, TX 78701

Phone: 512-476-4740
Fax: 512-476-1228
Austin Law Office Map