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Tag: Texas LLC
Self-Settled Trusts? Why Texas Requires a Third-Party Settlor
Introduction High-net-worth individuals in Texas seeking asset protection often explore self-settled trusts, but the state’s stringent requirements can complicate setup and effectiveness if not handled properly. Inexperienced advisors may fail to emphasize the need for a third-party settlor or trustee, leading to invalid trusts, lost protection, or tax pitfalls. Are you structuring your self-settled trust […]
Trust-Owned Texas LLCs: Asset-Protection & Tax Treatment
Introduction High-net-worth individuals and business owners in Texas often seek robust strategies to protect assets and optimize tax outcomes, but inexperienced advisors may overlook the unique benefits of trust-owned Limited Liability Companies (LLCs), leading to missed opportunities or compliance risks. Are you leveraging trust-owned LLCs to safeguard your wealth while navigating Texas’s franchise tax and […]
Non-Profit Status vs No-Tax-Due: Founder Misconceptions
Introduction Founders often confuse non-profit status with the “no-tax-due” threshold in Texas Franchise Tax. In 2025, assuming your startup pays no tax simply because you’re small—or registered as a non-profit—can lead to costly compliance mistakes. Let’s separate fact from fiction. Key Texas Legal References Texas Tax Code §171.0002(d) – No-tax-due threshold rules Texas Tax Code […]
Converting a Texas LLC to a Delaware C-Corp Before Seed Funding
Texas LLC to a Delaware C-Corp Entrepreneurs often start as a Texas LLC for simplicity, then convert to a Delaware C-Corporation to attract investors, enable stock issuance, and benefit from Delaware’s well-developed corporate law. A Section 18 conversion under Texas law or a statutory merger can accomplish this transition smoothly. Relevant Code & Tax References […]
DAO LLC in Texas: Legal Status & Tax Treatment
DAO LLC in Texas Decentralized Autonomous Organizations (DAOs) structured as Texas LLCs combine blockchain governance with traditional liability protection. Understanding their legal recognition and tax obligations is key to compliance and operational success. Relevant Code & Tax References Texas Business Organizations Code §3.003 defines an LLC as a “legal entity” separate from its members. Texas […]
Creating a Texas Series LLC Operating Agreement (Tax Clauses)
Texas Series LLC Operating Agreement A well-drafted Operating Agreement is vital for a Texas Series LLC to define governance, asset protection, and—critically—tax allocations among the master LLC and its individual series. Including clear tax-related provisions ensures each series maintains its liability shield while complying with federal and state tax requirements. Relevant Code & Tax References […]
Series LLCs in Texas: One Return or Many?
Series LLCs in Texas Texas Series LLCs allow asset segregation into “series” under a master LLC, simplifying formations and liability shields. A common question is whether each series must file its own Texas franchise-tax report or if the master LLC can file just one consolidated return. Relevant Tax & Code References Texas Tax Code §171.101 […]
Final Franchise-Tax Filings When You Close a Texas LLC
Final Franchise-Tax Filings When closing your Texas LLC, the final franchise-tax filing is critical to avoid penalties, interest, or future liens. This “final report” notifies the Comptroller that your business has ceased operations and ensures no outstanding tax liabilities remain. Relevant Tax Code References Texas Tax Code §171.255(d) requires a final franchise-tax report and payment […]
Dissolving a Texas LLC: Certificate of Termination Step-by-Step
Dissolving a Texas LLC Properly dissolving your Texas LLC protects you from future tax liabilities, fees, or compliance requirements. Filing a Certificate of Termination with the Secretary of State (SOS) and settling final franchise tax obligations are essential steps to formally wind down your entity. Relevant Code References Texas Business Organizations Code §11.056 (Certificate of […]
Secretary of State Forfeiture: Reviving a Texas LLC After Tax Default
Secretary of State Forfeiture If your Texas LLC has been forfeited by the Secretary of State due to unpaid franchise taxes or missing annual reports, you can restore its good standing—and your liability protections—by following a straightforward reinstatement process. Relevant Tax & State Code References Texas Tax Code §171.255 (Forfeiture of Charter or Authority for […]