Texas Rules for Naming Your Texas LLC The TXSOS will reject a new business filing if certain rules are not followed Some may say it’s better to ask forgiveness than ask permission — but when it comes to naming your Texas LLC, the rule does not apply. Choosing the wrong name can have serious consequences, especially if the name you select already belongs to another business. The Texas Secretary of State (TXSOS) website is a good place to start reviewing the various naming rules. We realize it’s a lot to
Read more →Coca-Cola®. Starbucks®. Apple®. Your favorite brands all have trademarks — and as you seek to start your own business, you might be wondering whether you need that little R in a circle, too. Like many questions in business, the answer to this one is, “it depends.” But don’t let that cryptic answer discourage you. We’ll clear things up in a Jiffy®. What is a trademark? First things first: as defined by the U.S. Trademark and Patent Office, a trademark is “a word, phrase, symbol or design, or a combination of
Read more →Texas Business Licenses What are they and who needs them? There are many steps that a new business must complete during the start up phase (i.e. incorporation, preparation of governing documents, federal tax ID, etc.). This article will focus on Texas business licenses. General License Information Since there are more than 150,000 filing jurisdictions around the country all with their own requirements, we will address Texas business licenses and permits in this article. There are over 250 professional, occupational, and facility business licenses available in Texas that are obtained from
Read more →An LLC (or corporation) taxed as an S-Corporation CAN revoke a previously filed S-Election provided the decision to revoke as the proper consent (a majority vote of the shareholders/members at a minimum). How to Revoke an S-Election To revoke an S-election, the entity will need to file a revocation statement with the IRS at the same service center that the S-Election (Form 2553) was filed. You can find this address by looking at the Where To File in the Instructions for Form 2553. In the revocation statement, the the entity
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Single-Member LLCs in Texas Can or should an LLC be owned by a single member? We are often asked if a Texas LLC can be owned by a single member. Single-Member LLCs (SMLLCs) are allowed in Texas and they are very common. For tax purposes, the IRS considers a Single Member LLC a “disregarded entity.” In other words, the IRS will tax the business just like it would tax a sole proprietorship. The profits (or losses) of the business are simply reported on the member’s tax return on Schedule C.
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An LLC is a pass-through entity unless you tell the IRS otherwise. In other words, profits and loses are passed through to the LLC’s owners. One reason an LLC would want to be taxed as an S corporation is to save money on self-employment taxes (i.e. medicare & social security). As of the writing of this article, self-employment taxes equaled 15.3% of the income that passes through to the LLC’s owners. If an LLC elects to be taxed as an S corporation, the owners who are also employees only pay
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An “S corporation” is essentially a traditional corporation (C corp or professional corporation) that elects pass-through tax status. It is important to note, however, that an LLC can also elect to be taxed as an S corporation. To make this election, the entity would notify the IRS by filing Form 2553 with the IRS (the S Election). Once the corporation or LLC elects to be treated like and taxed as an S corporation (i.e. files form 2553 with the IRS), the entity will pass corporate income, losses, deductions, and credits
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