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Business Structures and Required Documentation

Business Structure Alternatives

Choosing the appropriate legal form for a business is one of the first issues most entrepreneurs face. It is an important decision at the formation stage and as a business grows. So how do you know when it's time to change your legal status? That's where you'll want to obtain some legal counsel. An attorney will help you determine what legal status best meets your needs, based on the number of owners and their personal liability, your tax treatment, control and management and capital contributions.

Of course, sole proprietorships usually are the easiest while corporation are the most complex, but do offer serious advantages.

The chart below outlines the different types of business structures and highlights the details of each.

Legal Structure	Sole Proprietorship	C Corporation (Regular Corp)	S Corporation (Sub - Ch. 5 Corp)	General Partnership	Limited Partnership	Ltd-Liability Co. (LLC)
Ownership Rules	One owner.	Unlimited shareholders with no limit on the classes of stock.	Up to 75 shareholders with one class of stock is allowed.	Unlimited number of general partners.	Allows unlimited general and limited partners.	Unlimited number of "members" are allowed.
Liability of Owners	Unlimited liability for obligations of the business.	Generally, no personal liability for obligations of the corporation.	Generally, nopersonal liability for obligations of the corporation.	All general partners are fully liable for obligations of the business.	Unlimited liability for general partners; no personal liability for limited partners.	Generally, no personal liability for obligations of the entity.
Tax Treatment	Entity is not taxed, all income and losses passed through to owner.	Taxed at the corporate level. Shareholders are taxed on dividends.	Entity is not taxed; profits and losses are passed through to the shareholders.	Entity is not taxed; profits and losses are passed through to the partners.	Entity is not taxed; profits and losses are passed through to the partners.	Entity is not taxed; profits and losses are passed through to members.
Control and Management	Sole proprietor manages the business.	Board of Directors has overall responsibility with officers handling day-to-day responsibility.	Board of Directors has overall responsibility with officers handling day-to-day responsibility.	General partners have equal management rights unless they decide otherwise.	General partner manages the business subject to the Limited Partnership Agreement.	Manager runs business according to edicts in a formal Operating Agreement
Capital Contributions	Sole proprietor makes any capital contributions as needed.	Shareholders usually buy stock. Can issue both common and preferred stock.	Shareholders usually buy stock in the one class of stock issued by the corporation.	General partners contribute money or services to business and receive interests in profits and losses.	General and limited partners contribute money or services and receive interests in the profits and losses.	Members contribute money or services to the LLC and receive an interest in the profits and losses.
Ease of Establishing	Easiest.	Must file Articles of Incorporation with the Secretary of State.	Must file Articles of Incorporation with the Secretary of State.	No filing. But a partnership agreement is needed.	File an application with the Secretary of State.	File Articles of Organization with the Secretary of State.

Required Documentation

The following documentation is required to open a business account with ViewPoint Bank:

Business Structure	Required Documentation
Corporation	Original Corporate Charter or Certificate of Incorporation* Original Articles of Incorporation* Tax I.D. Number Proper I.D. and Social Security Number of all account signers Corporate Resolution (provided by bank) If out of state charter, need Certificate of Authority to do business in Texas Note: If a corporation is doing business as another name, they must provide an Assume Name Certificate. Only one Assume Name per account.
General Partnership	Original Partnership Agreement* Original Assumed Name Certificate* Tax I.D. Number Proper I.D. and Social Security Number of all account signers Partnership Resolution (provided by bank)
Sole Proprietorship	Original Assumed Name Certificate* Social Security Number or Tax I.D. Proper I.D. of all account signers In-House Trade Name Affidavit (provided by ViewPoint Bank)
Non-Profit Accounts/Organizations	Tax I.D. Number** Proper I.D. and Social Security Number for all account signers Resolution for Non-Profit Organizations (provided by bank) Minutes from meeting authorizing the account to be opened and assigning transaction authority - or letter from President on letterhead authorizing the account be opened and assigning transaction authority
Limited Partnership (Only General Partners Need to Sign)	Original Certificate of Limited Partnership* Original Limited Partnership Agreement* (the agreement does not need to be filed with the state) Tax I.D. Number Proper I.D. and Social Security Number of all account signers Partnership Resolution (provided by bank)
Limited Liability Company	Original Articles of Organization* Original Certificate of Organization* Tax I.D. Number Proper I.D. and Social Security Number of all account signer Limited Liability Company Authorization Resolution (provided by bank)
* Originals will be returned - bank will make copies ** Organizations such as a Church Club must obtain a Tax I.D. Cannot use the Church's Tax I.D.