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Briefcase: Business Structures

Guest Douglas Moll


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While Houston's economy is known for the oil and gas industry, it has also been a hotbed for start-up companies. Professor of Law Douglas Moll, with the University of Houston Law Center, specializes in the law of business organizations and explains what a budding businessperson needs to know about starting a company.

"When entrepreneurs want to start a business, the business structure they choose has a significant effect on critical issues," Moll said. "Such as whether the entrepreneur will be liable for the obligations of the business; how much of the profits of the business must be paid in taxes; and who will manage the business in the absence of a private agreement between parties. The choice may mean the difference between keeping one's personal assets safe or losing it all."

Professor Moll says there is one business structure that most Texas entrepreneurs prefer.

"Texas has seen an explosive growth in limited liability companies. LLCs have become the business organization of choice for entrepreneurs starting a closely-held company," he said. "It protects the shareholders from losing their personal assets if the business fails and provides income tax benefits."