Build Your Business on a Structure That Protects It

The entity you choose determines how you're taxed, what you're liable for, and how easily you can bring in partners or investors later.

Forming a business is more than filing paperwork with the Texas Secretary of State. The choice between an LLC, S-corporation, partnership, or corporation changes how profits are taxed, how owners are compensated, what happens if the business is sued, and how easy it is to raise capital or add partners down the road. Many owners default to whatever their friend used or whatever a formation website recommended, without anyone walking through the actual tradeoffs for their situation.

Because your advisor is both an attorney and a CPA, entity selection at Montgomery Legal starts with the tax picture as much as the legal one. We look at projected income, how owners plan to take money out of the business, whether outside investment is likely, and what liability exposure looks like in your industry — then structure the entity to match, not the other way around.

A practitioner's note: reworking a poorly structured entity two or three years in is almost always more expensive — in taxes, legal fees, and stress — than getting it right at formation.

Most partner disputes trace back to a governance document that was never written, or was written but never followed.

Operating agreements, bylaws, and partnership agreements are often treated as a formality — a document filed away and forgotten until a disagreement forces everyone to dig it out. When it's thin, generic, or missing entirely, disputes over decision-making authority, profit splits, or an owner's exit have no clear answer, and that ambiguity is what turns a disagreement into litigation.

We draft governance documents that actually anticipate the situations your business is likely to face: how major decisions get made, what happens if a partner wants out or stops contributing, how disputes are resolved before they reach a courtroom, and how new partners or investors are brought in. Beyond governance, we also handle the day-to-day contracts a growing business runs on — vendor agreements, client contracts, employment and independent contractor agreements, and non-compete or confidentiality agreements — reviewed with an eye toward the risks specific to your industry.

A succession plan you write on your own terms is worth far more than the one an emergency forces on you.

Every business eventually faces a transition — a partner retires, a founder passes away, an owner wants to sell, or a disagreement makes a buyout necessary. Without a plan in place beforehand, these moments tend to unfold under pressure, with no agreed-upon valuation method, no funding mechanism, and no clear process, which is exactly when disputes and litigation are most likely.

Buy-sell agreements put the terms in writing while everyone is still on good terms: how the business will be valued, who has the right or obligation to buy an exiting owner's share, how that purchase will be funded (often through life insurance or structured payments), and what happens in the event of death, disability, divorce, or retirement. We also work with owners on longer-range succession planning — grooming a successor, structuring a family transition, or preparing the business for an eventual sale — integrated with the estate and tax planning that a transition of this kind touches.

A practitioner's note: the best time to write a buy-sell agreement is the day the partnership begins — not the day someone wants to leave it.

Corporate formalities feel like paperwork — until a lawsuit or an audit tests whether they were actually followed.

Entities that don't maintain proper corporate formalities — annual meetings, resolutions, updated registered agent filings, state franchise tax filings — risk having their liability protection challenged or their good standing lapse without anyone noticing until it becomes a problem. Ongoing compliance is the quiet, unglamorous work that keeps the structure you built actually doing its job.

We also serve as ongoing outside counsel for many business clients, available for the legal and tax questions that come up as the business grows: adding a partner, opening a new location, restructuring compensation, or reviewing a new contract before it's signed. Having one advisor who already knows your entity, your governance documents, and your tax position means faster answers and fewer blind spots.