Choice of Entity Decision Tree: Choice and Acquisition of Entities in Texas


In selecting a form of business entity for an oil patch deal in Texas the organizer or initial owners can consider the following five business entity forms:

• Corporation

• General Partnership

• Limited Partnership

• Limited Liability Partnership (“LLP”)

• Limited Liability Company (“LLC”)

The form of business entity most advantageous in a particular situation depends on the business objectives for which the entity is being organized. In most situations, the choice of entity focus will be on how the entity and its owners will be taxed and the extent to which the entity will shield the owners and managers of the business from liabilities arising out of its activities. An increasingly important factor in choosing the form of entity, and its state of domicile, is the extent to which the fiduciary duties and personal liability of the entity’s governing persons may be limited in the entity’s governing documents. The 83rd Texas Legislature, 2013 Regular Session (the “2013 Legislative Session”), which convened on January 11, 2013 and adjourned on May 27, 2013, did not change the forms of business entity from which to choose or the principal entity choice factors for an oil patch deal, but did enhance their flexibility and the desirability of Texas as a place to organize a business.

Originally published for the TexasBarCLE and the Business Law Section of the State Bar of Texas.

Please see full publication below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jackson Walker | Attorney Advertising

Written by:


Jackson Walker on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.