Recently, we have been advising some clients and potential clients regarding possible acquisition opportunities created by the COVID-19 pandemic. The changing customer base and buying habits are substantially changing numerous industries and are creating opportunities for new businesses and businesses whose owners can rapidly change their business and sales models to operate profitability in today's new environment.
We get a lot of telephone calls and emails from potential clients regarding the creation of a new business or real estate venture or investment. Invariably the potential client asks us for our estimate of the charges to create the new entity and then asks us why they shouldn't use the self-help legal services websites to advise and form their new entity. The online entity formation tools seem to be cheaper and fairly simple to use. We typically inform these potential clients that the lower cost offered by such options does come at a price that they may well end up paying down the road.
Setting up an LLC in Texas is a relatively simple task that requires very little information. To successfully form an LLC in Texas you only need to provide the name of the LLC, the registered agent's name and address, identify the LLC's members or managers, a statement of the LLC's purpose, and identify the LLC's organizer.
With the advent of self-help legal websites and advances in on-line entity formation tools offered by many states, it is now easier than ever for anyone to form their own legal entity without the assistance of an attorney. However, the convenience offered by such options does come at a price that you may well end up paying down the road. Here are just a few of the things that you may be missing by opting to go without personal, professional legal representation in setting up a new entity:
The self-employment tax is an additional tax levied on self-employment income under the Self-Employment Contribution Act (SECA). The self-employment tax is comprised of a 12.4% Social Security tax and a 2.9% Medicare tax, for a combined 15.3% tax. The self-employment tax is in lieu of the tax on wages under the Federal Insurance Contributions Act (FICA), pursuant to which an employer is required to withhold Social Security and Medicare taxes from wages paid to the employee and to pay the employer's own share of these taxes.