Form the Right Business Entity

Choosing the right entity structure is one of the most important tax decisions you’ll make. The wrong structure costs you thousands. The right structure protects your assets and minimizes taxes. We handle formation and guide you to the best choice for your situation. We serve entrepreneurs throughout the Austin metro: Austin, Taylor, Hutto, Pflugerville, Round Rock, and Georgetown.

LLC vs. S-CORP vs. SOLE PROPRIETOR

Factor SOLE PROPRIETOR LLC S-CORP
Liability protection None – personal assets at risk Yes – personal assets protected Yes – personal assets protected
Self-employment tax Full SE tax on all profit Full SE tax (unless S-Corp elected) Reduced – tax only on salary, not distributions
Setup cost Lowest – little to no filing Low – ~$300 TX filing fee Higher – filing plus added accounting
Ongoing complexity Minimal Moderate – annual filing Higher – payroll, reasonable salary, more bookkeeping
Tax flexibility Limited High – choose how you’re taxed Moderate – specific rules apply
Best for Testing an idea, very low income Most small business owners Self-employed with $60k+ profit

Entity Formation FAQs

We charge a flat fee of $1,039, which includes any state/federal fees, and all paperwork is submitted to the correct agency.

Texas LLC filing fee: ~$300. Our formation service: ~$300-500. Total: ~$600-800. Annual filing: ~$0-200 depending on franchise tax nexus. Small investment with big liability protection.

Single-member: You’re the only owner. Files Schedule C. Multi-member: 2+ owners. Files Form 1065. Multi-member is more complex but allows flexible profit-sharing.

IRS requires reasonable compensation for actual work. Too low salary + high distributions raises audit flags. We recommend 40-60% of profit as W-2 salary based on industry norms.

Yes. Sole proprietor → LLC → S-Corp. Timing matters for tax reasons. Changes can trigger estimated taxes. Consult us before making major structural changes.

Form multi-member LLC or partnership. Get written partnership agreement outlining profit-sharing, roles, dispute resolution. Protects both parties and prevents misunderstandings.

Optional technically, but highly recommended especially for multi-member. Clarifies ownership, profit distribution, decisions, exit scenarios. Protects everyone and prevents conflicts.

Employer Identification Number = federal tax ID for your business. Needed for employees, business bank account, business tax returns. Free. We apply on your behalf.

Yes, as sole proprietor. But zero liability protection. One lawsuit could wipe out personal assets. LLC adds legal protection for small cost. We recommend for nearly all business owners.

Not Sure Which Entity Is Right for You?

Choosing between an LLC, S-Corp, or sole proprietorship comes down to your income, goals, and how much you want to protect. We’ll walk you through it.
What you get when you work with us:

  • A clear recommendation based on your numbers, not guesswork
  • Full formation handled start to finish
  • S-Corp election analysis to see if you qualify for tax savings
  • Ongoing compliance so you stay in good standing

Serving entrepreneurs across the Austin metro: Austin, Taylor, Hutto, Pflugerville, Round Rock, and Georgetown.

Ready to get started?

Schedule your consultation today.