Small Business Owners
The basics of closely-held business organization types. Advantages and differences between corporations, LLCs, LPs, and partnerships.
Small Business Owner Resources in Selecting a Business Structure
Closely-held business organization types present some unique challenges to small business owners. Owners of such small companies must determine which type of business organization to use. There are a number of choices, each with advantages and disadvantages. Forming the business organization is relatively simple. We provide a general outline by which anyone can form a Texas corporation. However, care must be taken in setting up governance structures where there are multiple owners.
Resources for Small Business Owners in Avoiding Oppression
Some types of business organization are more prone to problems with oppressive conduct, some less. General partnerships, for instance, are subject to very strict legal protections that provide effective remedies for oppressive behavior by managing partners. Until recently, the former shareholder oppression doctrine provided similar protections to minority shareholders in closely-held corporations. Those protections were removed by the Supreme Court in Ritchie v. Rupe. While significant legal rights still exist for minority shareholders, the best protection is always a fair and comprehensive shareholder agreement that provides for dispute resolution and the possibility of an exit in advance of difficulties.