Texas Business Law Attorney
Texas has been the leading destination for corporate relocations and new business formations for more than a decade. No state income tax, the Texas Business Organizations Code (one of the most flexible business statutes in the country), constitutional homestead protections, a specialized Business Court for complex commercial disputes, and a pro-business judicial culture make Texas the right home for a wide range of operating companies, real estate holdings, and investment vehicles. Our firm helps Texas entrepreneurs, established businesses, real estate investors, and out-of-state companies expanding into Texas with the full lifecycle of business law work.
Texas office: (469) 535-6260
Entity Formation Under the Texas Business Organizations Code
The Texas Business Organizations Code (TBOC) governs the formation and operation of every Texas business entity. The right entity choice depends on tax treatment, liability protection, ownership structure, capital-raising plans, and exit strategy. We routinely form:
Limited Liability Companies (LLCs)
The Texas LLC is the workhorse entity for most new Texas businesses. Formation requires filing a Certificate of Formation with the Texas Secretary of State; the current filing fee is $300. Texas LLCs offer enormous flexibility in management structure (member-managed or manager-managed), tax treatment (default partnership taxation, or election as S-Corporation or C-Corporation), capital contributions, distributions, and transfer restrictions. The TBOC provides default rules but lets the company agreement override most of them.
Series LLCs — A Texas Specialty
Texas is one of a small number of states that authorize Series LLCs (TBOC § 101.601 et seq.). A Series LLC is a single LLC that may establish multiple internal “series,” each with its own assets, members, and liabilities walled off from the others. The structure is particularly powerful for real estate investors who want each property in its own liability silo without forming and maintaining a separate LLC for each. Series LLCs require careful drafting, separate recordkeeping for each series, and proper filing of Assumed Name certificates, but when set up correctly they offer significant cost and administrative savings compared to multi-entity structures.
Corporations
Texas Corporations are formed under TBOC Chapter 21. C-Corporations remain the right choice for businesses planning to raise institutional capital, issue multiple classes of stock, or pursue an eventual IPO. S-Corporation election (made with IRS Form 2553) is often valuable for active service businesses.
Limited Partnerships
The Texas Limited Partnership (LP) under TBOC Chapter 153 remains the default structure for many real estate investment funds and family limited partnerships, particularly where the general partner is itself an LLC for liability protection.
The Texas Franchise Tax
Texas does not impose a state income tax, but it does impose a franchise tax (sometimes called the “margin tax”) on most entities doing business in Texas. The franchise tax is calculated on taxable margin (a formula derived from gross revenue) and applies at 0.375% for retail and wholesale, 0.75% for most other businesses. Entities with annualized total revenue at or below the no-tax-due threshold (currently $2.47 million for reports due in 2026) owe no franchise tax but must still file a Public Information Report or Ownership Information Report. We help clients structure entities to manage franchise tax exposure and ensure ongoing compliance.
Operating Agreements and Shareholder Agreements
The most important document in most Texas businesses is the company agreement (for LLCs) or the shareholder agreement and bylaws (for corporations). The TBOC’s default rules cover only a small portion of what owners actually need to address. A well-drafted agreement addresses:
- Management structure and decision-making authority.
- Allocations of profit and loss and tax distributions.
- Capital contributions and capital call obligations.
- Transfer restrictions, rights of first refusal, and drag-along / tag-along provisions.
- Buy-sell triggers (death, disability, divorce, deadlock, retirement).
- Valuation methodology for buyout transactions.
- Non-compete and confidentiality obligations of departing owners.
- Indemnification and exculpation of managers and officers.
- Dispute resolution — arbitration, mediation, and forum selection.
Generic online templates miss most of these. The cost of a properly drafted operating agreement is a small fraction of the cost of litigating its absence.
Texas Non-Compete and Restrictive Covenant Agreements
Texas non-competes are enforceable when reasonable. Texas Business and Commerce Code § 15.50 requires three things: (1) the covenant must be ancillary to or part of an otherwise enforceable agreement, (2) the limitations as to time, geographic area, and scope of activity must be reasonable, and (3) the limitations must not impose a greater restraint than necessary to protect the goodwill or other business interest of the promisee. Unlike California, where most employee non-competes are unenforceable, Texas regularly enforces well-drafted non-competes — but courts will reform or strike covenants that overreach. We draft non-competes calibrated to Texas standards and represent both employers (seeking enforcement) and employees (defending overbroad covenants).
Contracts
We draft and review the contracts that move every business: master services agreements, statements of work, vendor agreements, software licenses, distribution and reseller agreements, employment offer letters, independent contractor agreements, NDAs, asset purchase and sale agreements, and bills of sale. Texas contract law gives sophisticated parties broad freedom of contract, which makes precise drafting both more important and more rewarding than in some other states.
Acquisitions and Sales
Buying or selling a business is the largest legal transaction most owners undertake. We represent buyers and sellers in:
- Letter of intent and term sheet negotiation.
- Asset purchase and stock or membership interest purchase agreements.
- Due diligence coordination.
- Reps and warranties, indemnification, escrow, and rep-and-warranty insurance.
- Earn-out and seller-financing structures.
- Post-closing integration, transition services agreements, and dispute resolution.
Foreign Entity Registration in Texas
If your business is formed in another state but doing business in Texas, you generally must register as a foreign entity with the Texas Secretary of State under TBOC Chapter 9 and obtain a Certificate of Authority. Operating in Texas without proper registration prevents your company from maintaining a lawsuit in Texas courts and exposes the company to civil penalties. Because we are licensed in California, Idaho, Texas, Washington, and North Carolina, we can handle both the home-state formation and the Texas foreign registration in a single engagement.
Texas Business Court
Effective September 1, 2024, Texas established a specialized Business Court to hear complex commercial cases meeting jurisdictional thresholds (generally claims over $5 million or involving publicly traded companies, qualified transactions, or specified subject matter). The Business Court is staffed by judges with significant commercial litigation experience and offers a more sophisticated and predictable forum for complex disputes than the standard district courts. We evaluate Business Court jurisdiction in every significant commercial matter and represent clients before the court when its specialized expertise improves outcomes.
Texas Citizens Participation Act (Anti-SLAPP) and DTPA
Two Texas statutes regularly affect business litigation strategy. The Texas Citizens Participation Act (TCPA), Texas’s anti-SLAPP statute, permits early dismissal of lawsuits that infringe on speech or association rights and includes mandatory attorney fee-shifting for prevailing defendants. The Texas Deceptive Trade Practices Act (DTPA) provides consumer remedies for misrepresentations and unconscionable conduct, including treble damages in some cases. Both statutes have technical procedural requirements; we incorporate them into every litigation strategy where relevant.
Franchise Representation
We represent franchisees in franchise acquisitions, Franchise Disclosure Document (FDD) review, area development agreements, and franchise relationship disputes. The FDD is genuinely useful — but only when read by someone who knows what to look for. See also our Representation of Franchisees page.
Business Disputes and Litigation
We represent businesses in commercial disputes — breach of contract, partnership and shareholder disputes, breach of fiduciary duty, non-compete enforcement and defense, business torts, fraud claims, and tortious interference — in Texas district court, the Texas Business Court (where jurisdiction exists), federal court, and arbitration.
Schedule a Texas Business Law Consultation
Texas: (469) 535-6260
Our other offices:
Idaho (208) 696-2772 · Southern California (714) 464-5188 · Northern California (707) 207-8005 · Washington (206) 279-4780 · North Carolina (919) 363-9945
See also: Texas (state hub) · Business Law (pillar)
Disclaimer: The information on this page is general legal information about Texas business law and is not legal advice. The Texas Business Organizations Code, franchise tax thresholds, and other rules referenced on this page change. Always consult a Texas-licensed attorney about your specific situation. No attorney-client relationship is formed by visiting this page.
Schedule a Free Consultation in Texas
Discuss your matter with our Texas team. Initial consultations are complimentary.
Texas: (469) 535-6260
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Related Pages
- Texas multi-state practice hub — overview of all our Texas services.
- Business Law across five states — see how we coordinate business law matters across Idaho, California, Texas, Washington, and North Carolina.
- Texas Estate Planning
- Texas Real Estate