A business can be formed in a number of different ways.  The most common “legal entities” in Texas are the corporation, limited liability company, partnership and the sole proprietorship.  However, there are many others, including the LP, LLP, LLLP, PLLC, PC, PA, joint venture and a few other variations.  A corporation, for example, is important if you want to protect the owners from potential liability.  For tax purposes, you may want to consider the “S-Corporation.”  There are a number of factors to consider when deciding which entity is best for you and your business.   Regardless of the entity you choose, make sure that you fully understand the formation documents and how to function as the new entity. It is will make all the difference in the world.