The Woodlands Law Firm Blog

Author: Gwendolyn Simpson

  • Avoiding the Pitfalls of Poorly Planned Estates

    Avoiding the Pitfalls of Poorly Planned Estates

    Estate planning is a crucial aspect of financial and legal management that often gets overlooked or postponed. Many individuals assume that estate planning is only for the elderly or the wealthy, but the truth is that everyone can benefit from proper estate planning. In this blog post, we will delve into the significance of estate planning and shed light on real-life examples where neglecting or poorly executing an estate plan has led to undesirable outcomes.

    Safeguarding Your Loved Ones: One of the primary reasons estate planning is important is to ensure the well-being of your loved ones. When someone passes away without a will or a comprehensive estate plan, it can lead to conflicts and disputes among family members. Without clear instructions on asset distribution and guardianship for minor children, the court may intervene and make decisions that may not align with your wishes.

    A Case of Family Discord: Imagine a scenario where an individual passed away suddenly, leaving behind significant assets and a blended family with multiple minor children from each relationship. Since there was no estate plan in place, the deceased’s biological children and the surviving spouse from the second marriage engaged in a lengthy legal battle over the distribution of assets. The first marriage’s minor children are now co-owners of the estate with the deceased’s surviving spouse pitting them against each other. This is unnecessary and could have been prevented with an estate plan that addressed the specific dynamics of the family and clearly outlined the individual’s intentions.

    Ensuring Business Continuity: For business owners, estate planning is vital to ensure a smooth transition and the continuity of operations in the event of incapacity or death. Without a proper plan in place, the future of the business may be uncertain, leading to potential conflicts, financial instability, and even the collapse of the business itself.

    The Fall of a Family Business: Imagine a family business that had been thriving for generations suddenly coming to a standstill when the founder unexpectedly passed away. Due to the absence of a succession plan, disagreements arose among family members regarding leadership and asset distribution. The lack of clarity and direction resulted in a decline in business operations and delays in probate court, leading to financial losses and a tarnished family legacy. A well-crafted estate plan, including a succession plan, could have avoided this devastating outcome.

    Minimizing Estate Taxes: Estate planning allows you to minimize the impact of taxes on your estate, thereby preserving a larger portion of your assets for future generations. By utilizing various strategies and tools like trusts and gifting, you can strategically plan your estate to take advantage of tax exemptions and deductions.

    The High Cost of Poor Tax Planning: Consider a case where an individual with a substantial estate neglected to engage in proper estate planning. As a result, their beneficiaries were burdened with exorbitant estate taxes, significantly reducing the wealth that could have been passed on to the next generation. With careful estate planning, this individual could have explored tax-efficient strategies, potentially saving their heirs a significant financial burden.

    Conclusion: Estate planning is not a task to be delayed or dismissed lightly. The real-life examples discussed above demonstrate the repercussions of neglecting or poorly executing an estate plan. By taking the time to engage in estate planning, you can safeguard your loved ones, minimize estate taxes, and ensure the smooth transfer of your assets. Consulting with an experienced estate planning attorney will enable you to create a tailored plan that reflects your unique circumstances and protects your legacy. Remember, estate planning is not just for the wealthy—it is for anyone who wishes to have control over their assets and provide for their loved ones in the most efficient and effective way possible.

    Book a consultation to protect your loved ones after you are gone.

  • Mechanics and Materialman’s Liens

    Mechanics and Materialman’s Liens

    As a Texas attorney, I often come across clients who face challenges in securing payment for their work or materials supplied in construction projects. In such cases, mechanics and materialman’s liens can be powerful legal tools to protect the rights of contractors, subcontractors, suppliers, and other construction industry professionals.

    However, it is crucial to understand the deadlines associated with filing these liens to ensure their effectiveness. In this blog post, we will explore the basics of mechanics and materialman’s liens in Texas and shed light on the critical filing deadlines.

    What are mechanics’ and materialman’s liens? Mechanics and materialman’s liens are legal remedies available to individuals or businesses involved in the construction industry to secure payment for labor, services, or materials provided in the improvement of a property. These liens essentially create a claim against the property, allowing the claimant to seek payment from the property owner.

    Critical Deadlines for Filing: To protect your rights under mechanics and materialman’s liens, it is essential to understand the specific deadlines for filing in Texas. Failing to meet these deadlines may result in the loss of your lien rights. In 2022, the requirements and deadlines in Texas were tweaked by the legislature.  The following are examples of such changes:

    • Design professionals such as engineers and architects now have lien rights regardless of who they contract with.
    • Designs, drawings, plans, plats, surveys, and specifications done by design professionals are now categorically considered “improvements,” therefore they
      can be lienable.
    • Subcontractors and other lower-tier parties must no longer serve a second-month notice, though it is still best practice to serve such a notice. Subcontractors are also still required to serve the third-month notice on the 15th day of the third month after furnishing labor or materials.
    • All written notices must follow the format specified in the new statutory forms (see below for more details).
    • Deadlines that fall on a weekend or a legal holiday are now automatically extended to include the next day that is not a weekend or a legal holiday. Note that it is still best practice to fulfill deadlines sooner than the deadline.
    • All written notices may now be served via certified mail or via “any other form of traceable, private delivery, or mailing service that can confirm proof of receipt.”
    • A second month’s notice for specially fabricated materials is no longer required.
    • All mechanics liens, regardless of project type, will expire after 1 year following the last day when a lien could be filed. The claimant and the owner may reach an agreement for an extension and file such an agreement in the county clerk’s office.
    • Texas lien waivers no longer have to be notarized.

    The following is an example of a deadline:

    2022 Deadlines for TX Mechanic's Liens
    2022 Deadlines for TX Mechanic’s Liens

    Disclaimer: The laws surrounding Texas mechanic’s lien claims are complex and different from similar claims in other jurisdictions. This tool is not intended to provide legal advice. You should consult legal counsel with any questions. This tool is for informational purposes only 

  • Navigating Personal Injury Cases: Your Guide to Seeking Justice

    Navigating Personal Injury Cases: Your Guide to Seeking Justice

    If you or your loved one has experienced an unfortunate incident resulting in physical or emotional harm, it’s crucial to understand your rights and the legal recourse available to you. In this article, we’ll provide a comprehensive overview of personal injury cases in Texas, offering insights into key aspects of the process and highlighting the importance of having a dedicated attorney by your side.

    1. Understanding Personal Injury Law in Texas: Personal injury law encompasses a wide range of cases, including car accidents, slip and falls, medical malpractice, product liability, and more. In Texas, the legal system recognizes that victims deserve compensation for their injuries and losses caused by someone else’s negligence or wrongful actions.
    2. Determining Liability: One of the crucial elements in a personal injury case is establishing liability. Texas follows the modified comparative fault rule, which means that if the injured party is found to be partially responsible for the incident, their compensation may be reduced proportionally. The Woodlands Law Firm thoroughly investigates the circumstances, gathers evidence, and works with experts to establish liability, ensuring you receive the maximum compensation you deserve.*
    3. Seeking Medical Attention: After an accident, your health and well-being should be your top priority. Seeking immediate medical attention is crucial, not only for your well-being but also for documenting your injuries. Medical records serve as essential evidence in personal injury cases, supporting your claim for compensation.
    4. Statute of Limitations: In Texas, there is a time limit within which you must file a personal injury claim. This is known as the statute of limitations. Generally, the statute of limitations for personal injury cases is two years from the date of the incident. However, there are exceptions, such as cases involving minors or instances of medical malpractice. Consulting with a skilled attorney promptly is vital to ensure you do not miss the filing deadline.
    5. Calculating Damages: Personal injury claims aim to compensate victims for the damages they have suffered. Damages may include medical expenses, lost wages, pain and suffering, emotional distress, and loss of consortium. Understanding the full extent of your damages and accurately calculating them requires the expertise of an experienced personal injury attorney who can build a strong case on your behalf.
    6. Negotiating with Insurance Companies: Dealing with insurance companies can be a complex and overwhelming process. Insurance adjusters often try to minimize their payout or deny claims altogether. Having a skilled attorney on your side can level the playing field. The Woodlands Law Firm navigates the negotiation process, ensuring your rights are protected, and fights for a fair settlement that covers your losses adequately.
    7. Going to Trial: While many personal injury cases are resolved through settlements, some may require going to trial. The Woodlands Law Firm prepares meticulously for courtroom proceedings and presents a compelling case to the jury. The aim is to secure a favorable verdict that upholds your rights and provides the compensation you deserve.

    Conclusion: Navigating a personal injury case in Texas can be challenging without proper legal guidance. By understanding the intricacies of personal injury law, determining liability, seeking immediate medical attention, adhering to the statute of limitations, calculating damages accurately, and having an experienced attorney on your side, you can navigate the legal process with confidence. The Woodlands Law Firm is here to provide you with personalized attention, ensuring you receive the justice and compensation you deserve.

    Contact the Firm today for a consultation and let The Woodlands Law Firm fight for your rights.

    *As each case is unique, a law firm cannot guarantee results.

  • Mental Anguish Damages: Understanding Factors for Consideration

    Mental Anguish Damages: Understanding Factors for Consideration

    In personal injury cases, victims often experience not only physical pain but also mental anguish. Mental anguish refers to the emotional distress, suffering, and psychological harm that a person endures due to the negligence or intentional misconduct of another party. In Texas, determining the appropriate compensation for mental anguish damages involves considering various factors and examining relevant case law precedents.

    Factors for Consideration:

    When calculating mental anguish damages, Texas courts consider a range of factors to determine an appropriate compensation amount. While each case is unique, the following factors are commonly examined:

    1. 1. Severity and Duration: The severity and duration of the mental anguish experienced by the plaintiff play a significant role in determining damages. The courts and/or fact finder will consider the intensity and length of the emotional distress caused by the defendant’s actions.
    2. Impact on Daily Life: The extent to which mental anguish affects the plaintiff’s daily life is another crucial factor. The court may consider how the emotional distress has disrupted the plaintiff’s ability to work, enjoy hobbies, maintain relationships, or engage in other activities.
    3. Physical Manifestations: Evidence of physical symptoms or manifestations resulting from mental anguish can strengthen the case for damages. These may include sleep disturbances, loss of appetite, weight fluctuations, or the development of stress-related conditions.
    4. Professional Evaluation: Professional assessments, such as psychological evaluations, can provide objective evidence of mental anguish and its impact on the plaintiff. Expert testimony from mental health professionals may be instrumental in validating the claim.
    5. Pre-existing Conditions: Pre-existing mental health conditions, if any, should be taken into account when determining mental anguish damages. It is essential to establish the additional suffering caused by the defendant’s actions, separate from the plaintiff’s pre-existing condition.

    Relevant Case Law Precedents:

    To understand how mental anguish damages have been calculated in Texas, it is crucial to examine significant case law precedents. The following cases serve as important references:

    1. Parkway Co. v. Woodruff, 901 S.W.2d 434 (Tex. 1995): In this case, the Texas Supreme Court held that mental anguish damages must be reasonably proportionate to the plaintiff’s mental anguish. It emphasized the importance of considering the nature of the injury, the length of time the plaintiff experienced mental anguish, and the effect on their daily life.
    2. Saenz v. Fid. & Guar. Ins. Underwriters, 925 S.W.2d 607 (Tex. 1996): In this case, the Texas Supreme Court recognized that severe mental anguish can be compensable even in the absence of physical injury. It established that the nature, duration, and intensity of the anguish should guide the calculation of damages.

    Conclusion:

    Calculating mental anguish damages in Texas requires a careful examination of various factors and an understanding of relevant case law precedents. By considering the severity and duration of emotional distress, the impact on daily life, physical manifestations, professional evaluations, and pre-existing conditions, attorneys can build a strong case for their clients.

  • Texas DTPA: Your Consumer Shield

    Texas DTPA: Your Consumer Shield

    The Woodlands Law Firm is committed to protecting the rights of consumers in Texas. In this blog post, we will explore the Texas Deceptive Trade Practices Act (DTPA), a crucial piece of legislation designed to safeguard consumers from unfair and deceptive business practices. Whether you have been a victim of false advertising, fraudulent schemes, or any other form of consumer deception, understanding the DTPA can empower you to seek justice and hold unscrupulous businesses accountable.

    1. What is the Texas Deceptive Trade Practices Act (DTPA)? The Texas DTPA is a comprehensive consumer protection law that outlines prohibited acts and provides remedies for consumers who have been harmed by deceptive trade practices. It covers a wide range of commercial activities, including false advertising, misrepresentation, unconscionable acts, breaches of warranty, and more. The primary goal of the DTPA is to ensure fair and honest business practices and to provide consumers with avenues for seeking redress when they have been deceived or harmed.
    2. Prohibited Acts under the DTPA: The DTPA identifies specific acts and practices that are considered deceptive and are therefore prohibited. These include false representations, false advertising, bait-and-switch tactics, failure to disclose material information, and engaging in unfair or unconscionable practices. Understanding these prohibited acts can help consumers recognize when they have been victims of deceptive trade practices.
    3. Remedies Available to Consumers: The DTPA provides various remedies for consumers who have suffered harm due to deceptive trade practices. These remedies include actual damages, statutory damages, attorney’s fees, and injunctive relief. Moreover, in cases where the court finds that the defendant acted knowingly, additional treble damages may be awarded to the consumer. The availability of these remedies encourages consumers to assert their rights and seek compensation for the losses they have incurred.
    4. Elements of a DTPA Claim: To succeed in a DTPA claim, certain elements must be established. These typically include proving that the defendant engaged in a deceptive act, the consumer relied on the deceptive act, and the consumer suffered damages as a result. Understanding these elements is crucial when building a strong case to hold the responsible party accountable.
    5. Exceptions and Defenses: While the DTPA provides significant protection to consumers, there are certain exceptions and defenses available to defendants. For example, the DTPA does not apply to transactions between businesses or to certain professional services. Additionally, a defendant may argue that the consumer’s own actions contributed to the harm suffered. Consulting with an experienced consumer protection attorney is essential to navigate these complexities effectively.
    6. Seeking Legal Assistance: If you believe you have been a victim of deceptive trade practices in Texas, it is crucial to consult with a knowledgeable attorney who specializes in consumer protection law. A skilled attorney can evaluate your case, guide you through the legal process, and advocate on your behalf to help you obtain the compensation you deserve.

    Conclusion: The Texas Deceptive Trade Practices Act is a powerful tool that empowers consumers to fight back against unfair and deceptive business practices. By understanding the prohibited acts, available remedies, and the elements required for a successful claim, you can assert your rights and seek justice for the harm you have suffered. If you have been a victim of deceptive trade practices, don’t hesitate to contact The Woodlands Law Firm.

  • The Importance of Business Planning and Operating Agreements

    The Importance of Business Planning and Operating Agreements

    As a Texas attorney, I have witnessed firsthand the consequences that arise when businesses fail to implement proper planning structures. In this article, I will explore real-life examples of what can happen when there is no plan in place, emphasizing the significance of proactive business planning and the necessity of operating agreements.

    Chaos in Decision-Making: 

    Imagine a scenario where a business lacks a well-defined decision-making process. Disputes between partners or stakeholders can arise, leading to impasses and gridlocks. Without a plan in place, conflicts can escalate, potentially resulting in expensive litigation or even the dissolution of the business. A comprehensive operating agreement provides clear guidelines on how decisions should be made, preventing chaos and ensuring the smooth functioning of the business.

    Example: ABC Manufacturing Company In the absence of an operating agreement, the partners of ABC Manufacturing Company disagreed on key business decisions, such as expansion plans and capital investments. Unable to reach a consensus, the partners ended up filing lawsuits against each other, leading to a significant drain on financial resources and damaging the company’s reputation. Had they drafted a well-crafted operating agreement outlining decision-making procedures, this costly and disruptive dispute could have been avoided.

    Uncertainty Regarding Ownership and Management:

    Without a well-drafted operating agreement, questions can arise regarding the ownership and management structure of the business. This lack of clarity can create confusion, strained relationships, and potential power struggles among partners or members.

    Example: XYZ Consulting Firm XYZ Consulting Firm was formed by three friends who began their venture without an operating agreement. As the business grew, so did disagreements over profit sharing, management responsibilities, and the admission of new partners. The lack of a clear framework resulted in a breakdown of trust and ultimately led to one partner exiting the business. The remaining partners were left scrambling to define the new ownership structure, which caused unnecessary disruptions and hindered the firm’s growth potential.

    Insufficient Protection of Personal Assets:

    One of the primary advantages of operating agreements is their ability to shield owners’ personal assets from business liabilities. When no operating agreement is in place, business owners may find themselves personally liable for the debts and obligations of the company, putting their personal assets at risk.

    Example: DEF Construction Company DEF Construction Company operated as a general partnership without an operating agreement. When the company faced significant financial losses due to a failed project, the creditors pursued the personal assets of each partner to satisfy the debts. As a result, the partners faced financial ruin and had to liquidate their personal assets, including homes and savings, to settle the company’s obligations. A well-structured operating agreement with appropriate liability protections could have prevented this devastating outcome.

    Conclusion: 

    The examples discussed above highlight the perils businesses can face when they neglect the importance of business planning and operating agreements. By taking proactive measures to draft a comprehensive operating agreement, businesses can establish clear guidelines for decision-making, define ownership and management structures, and protect personal assets. Engaging the services of a knowledgeable attorney during the business planning process can help ensure that your business avoids the potential pitfalls that arise when there is no plan in place. Remember, it is never too early to start planning, but it can be too late.  Contact The Woodlands Law Firm for a Consultation today.

  • The Process of Winding Up a Church or Nonprofit in Texas

    The Process of Winding Up a Church or Nonprofit in Texas

    The Woodlands Law Firm handles non-profit issues and has assisted in winding up nonprofits and religious organizations. While there are slight differences between winding up a church versus a nonprofit, it generally follows similar steps.

    Winding up a nonprofit, also known as nonprofit dissolution, is a significant and complex process that requires careful consideration and adherence to legal requirements. This guide aims to provide a step-by-step overview of the process of winding up a nonprofit or church in Texas. It’s important to note that the information provided in this blog post is intended as a general guide and should not be considered legal advice. Consulting with an attorney specializing in nonprofit and religious organizations is strongly recommended to ensure compliance with applicable laws and regulations.

    Step 1: Initial Considerations and Decision-Making.

    Before initiating the winding-up process, it is crucial for the church’s governing body to conduct thorough discussions and make an informed decision about dissolution. This may involve holding meetings, consulting with church members or directors (depending on how it is set up), and obtaining the necessary approvals, votes, and resolutions as per the nonprofit/church’s governing documents (e.g., bylaws).

    Step 2: Seek Legal Counsel.

    Engage the services of an attorney experienced in nonprofit law and nonprofit/church dissolution. A qualified attorney will provide guidance, assist with legal compliance, and ensure that all necessary steps are followed throughout the process.

    Step 3: Compliance with the Nonprofit’s Governance Documents.

    Review and follow the specific procedures outlined in the church’s governing documents, such as bylaws, articles of incorporation, or any relevant denominational rules or guidelines. These documents typically outline the process for dissolving the church and may require specific voting thresholds or notice requirements.

    Step 4: Notification and Approval.

    Notify the church members, board members, and relevant stakeholders about the decision to dissolve the nonprofit/church. In many cases, this involves holding a special meeting where members vote on the dissolution proposal. The governing documents may specify the voting requirements (e.g., a supermajority vote) for the dissolution to proceed.

    Step 5: Asset Disposition.

    Develop a plan for the disposition of the nonprofit/church’s  assets. This may involve selling or transferring property, distributing funds, paying off outstanding debts, and fulfilling any legal obligations. Consult with legal counsel to ensure compliance with applicable federal and state laws governing the distribution of assets held by religious organizations. Typically, a non-profit is safe to donate its assets to another non-profit with similar goals, but legal and taxable issues can arise when non-profits do business with for-profit entities.

    Step 6: Notification to the Texas Secretary of State.

    File the appropriate documentation with the Texas Secretary of State to formally dissolve the nonprofit/church as a legal entity. This may include filing articles of dissolution or other required forms. The specific requirements for dissolution filings can vary, so consulting with legal counsel is crucial to ensure compliance.

    Step 7: Tax and Reporting Obligations.

    Fulfill any outstanding tax and reporting obligations with the Internal Revenue Service (IRS), Texas Comptroller’s Office, and any other applicable agencies. This may include filing final tax returns, settling payroll taxes, and closing any other relevant accounts.

    Step 8: Cancellation of Registrations and Licenses.

    Cancel any registrations, licenses, permits, or certifications held by the church with various state and local agencies. This may include sales tax permits, charitable solicitation registrations, and other permits specific to the church’s operations.

    Step 9: Dissemination of Final Information.

    Communicate the nonprofit/church’s dissolution to all stakeholders, including members, directors, employees, creditors, and relevant community organizations. Provide information on the final disposition of assets, contact information for any ongoing matters, and any other necessary details.

    Conclusion: 

    Winding up a nonprofit/church in Texas involves several critical steps, including decision-making, compliance with governance documents, asset disposition, legal filings, and fulfillment of tax and reporting obligations. Given the legal complexities involved, it is essential to engage the services of an attorney specializing in nonprofit law to ensure compliance with applicable laws and regulations. This guide provides an overview of the general process, but it is important to seek individualized legal advice to address the specific circumstances of the church or nonprofit in question.  If you have questions, call us today!

  • Types of Motions for Summary Judgment Under Texas Law

    Types of Motions for Summary Judgment Under Texas Law

    Motions for Summary Judgment act as shortcuts for cases, allowing a party to win a case on paper without having to go to trial. However, if the opposing party knows what they are doing, defeating a Motion for Summary Judgment (“MSJ”) is fairly easy, so long as there is a shred (“scintilla”) of evidence to support each element of a party’s claim and the party answers in a timely manner. In Texas, there are two types of these MSJs, a Traditional MSJ under Rule 166a and a No-Evidence MSJ under Rule 166a(i).

    Recently, I was involved in a case with a lawyer who had been practicing law since the 1970’s.  Unfortunately for his client, this particular attorney had not stayed on top of his continuing legal education when it came to summary judgment motions. In litigation, and on behalf of my client, after discovery was substantially complete, I filed both types of MSJs: a Traditional and a No-Evidence Motion for Summary Judgment.  It turned out that he was unaware that Texas created a unique vehicle, a No-Evidence Motion for Summary Judgment, in the last 20 or so years. So, instead of filing a response to the MSJ pursuant to the Texas Rules of Civil Procedure, this esteemed counsel tried the “spaghetti on the wall” trick, which is a colloquial term when an attorney responds to an MSJ with a lengthy response and/or a pile of exhibits in order for the court to hopefully find something in the stack of paper that sticks and defeats the pending MSJ.  In doing so, he completely overlooked specifically responding to the No-Evidence MSJ.  While this may have worked against a Traditional MSJ, not knowing the differences between the types of MSJs cost him his case.  These motions serve distinct purposes and have specific requirements:

    Traditional Motion for Summary Judgment under Texas Rule 166a: 

    The traditional motion for summary judgment is a well-established procedure used to seek the early resolution of a case in Texas. Here are the essential elements of a traditional motion for summary judgment under Rule 166a:

    a. Burden of Proof: The moving party, typically the defendant, bears the burden of proof in a traditional motion for summary judgment. They must show that there is no genuine issue of material fact and that they are entitled to judgment as a matter of law. The moving party must present evidence, such as affidavits, deposition testimony, or other supporting documents, to support their assertions.

    b. Genuine Issues of Material Fact: In Texas, a traditional motion for summary judgment requires the court to determine whether there are genuine issues of material fact that need to be resolved through a trial. If there are disputed facts that may impact the outcome of the case, the motion is typically denied, and the case proceeds to trial.

    c. Legal Analysis: The court analyzes the evidence presented by both parties and applies the applicable law to determine whether the moving party is entitled to judgment as a matter of law. If there are no genuine issues of material fact, and the law supports the moving party’s position, the court may grant the motion, resulting in a judgment without a trial.

    No-Evidence Motion for Summary Judgment under Texas Rule 166a(I):

    The no-evidence motion for summary judgment, specifically provided by Rule 166a(i), is designed to address cases where the non-moving party has failed to produce any evidence on an essential element of their claims. Here are the key aspects of a no-evidence motion for summary judgment under Rule 166a(i):

    a. Shifting the Burden: After an adequate time for discovery, in a no-evidence motion for summary judgment, the moving party, typically the defendant, asserts that there is no evidence to support an essential element of the non-moving party’s claim. This shifts the burden to the non-moving party, who must then present evidence to raise a genuine issue of material fact.

    b. No-Evidence Standard: Under Rule 166a(i), the court evaluates whether the non-moving party has failed to produce any evidence that would enable a reasonable jury to find in their favor on an essential element of their claim. If the non-moving party cannot provide any evidence to create a genuine issue of material fact, the court may grant the no-evidence motion for summary judgment.

    c. Limited Discovery: Rule 166a(i) allows for the filing of a no-evidence motion for summary judgment early in the litigation process, often limiting the opportunity for extensive discovery. This promotes the efficient resolution of cases that lack factual support.

    Conclusion:

    In conclusion, the Texas Rules of Civil Procedure provide two distinct motions for summary judgment: the traditional motion under Rule 166a and the no-evidence motion under Rule 166a(i). While the traditional motion focuses on the absence of genuine issues of material fact, the no-evidence motion can only be filed after an adequate time for discovery and challenges the non-moving party to provide evidence supporting their claims. Familiarity with these rules is essential for attorneys practicing in Texas to effectively advocate for their clients and navigate the state’s civil litigation process.  The Woodlands Law Firm is extremely familiar with these types of Motions and the required responses.  Should you need assistance, please contact the firm today!

  • A Step-by-Step Guide on How to Obtain an EIN/FEID/Tax ID

    A Step-by-Step Guide on How to Obtain an EIN/FEID/Tax ID

    If you’re starting a business, it’s essential to understand the various legal requirements involved. One such requirement is obtaining an EIN, also known as an Employer Identification Number. This number is also commonly referred to as a Federal Employer ID Number (FEID), Tax Identification Number, or Tax ID. An EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify your business entity for tax purposes. In this blog post, we will provide a comprehensive guide on how to obtain an EIN, ensuring that you navigate the process smoothly and efficiently.

    Step 1: Determine Eligibility:

    Before you begin the application process, it’s crucial to determine whether you are eligible for an EIN. Generally, any business entity that has employees or is required to file specific tax returns is eligible for an EIN. This includes sole proprietorships, partnerships, corporations, and limited liability companies (LLCs).  Having an EIN for one business does not permit its usage for another business owned by the same Member(s) or Shareholder, so typically, an EIN is needed for each entity.  Otherwise, using the same number will cause confusion when it comes time to file taxes.

    Step 2: Prepare the Necessary Information:

    Gather the following information required to complete the EIN application:

    1. Business Entity Type: Determine the specific type of entity you are applying for, such as a sole proprietorship, partnership, corporation, or LLC.
    2. Responsible Party Information: Identify the individual who will act as the responsible party for the EIN application. This person should have the authority to make decisions for the business and provide their name, social security number (SSN), or individual taxpayer identification number (ITIN), and contact information.
    3. Business Details: Prepare details about your business, including the legal name, trade name (if applicable), physical address, mailing address, and the date the business was established.
    4. Purpose of the EIN: Clearly state the reasons for obtaining an EIN, whether it’s to start a new business, hire employees, or open a bank account.

    Step 3: Choose the Application Method:

    There are three ways to apply for an EIN: online, by mail, or by fax. The online application method is the fastest and most convenient. However, if you prefer the alternative methods, you can submit Form SS-4 by mail or fax it to the IRS.

    Step 4: Online Application Process:

    To apply for an EIN online, follow these steps:

    1. Access the IRS website: Go to the official IRS website and search for the EIN application form (Form SS-4).  See https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers.
    2. Complete the application: Provide all the necessary information as requested, ensuring accuracy and clarity.
    3. Review the application: Carefully review the application before submission to avoid any errors or omissions.
    4. Submit the application: Once you are confident in the accuracy of your application, submit it electronically. The system will generate your EIN immediately upon successful completion.

    Step 5: Alternative Application Methods:

    If you choose to apply by mail or fax, follow these steps:

    1. Obtain Form SS-4: Download Form SS-4 from the IRS website or contact the IRS to request a physical copy.
    2. Fill out the form: Complete the form using the information you gathered in Step 2. Ensure legibility and accuracy to prevent delays.
    3. Review the form: Thoroughly review the form to verify that all information is accurate and complete.
    4. Submit the form: Mail or fax the completed form to the appropriate IRS office as indicated in the instructions.

    Step 6: Retain Your EIN:

    Once your EIN is issued, it is crucial to keep it in a safe place as you will need it for various business activities. Make sure to provide your EIN to relevant parties, such as financial institutions, the IRS, and state and local agencies, as required.

    Conclusion:

    Obtaining an EIN is a vital step in establishing your business and complying with tax regulations. By following this step-by-step guide, you can navigate the EIN application process with confidence. Remember to gather the necessary information, choose the appropriate application method, and retain your EIN for future use. If you have any doubts or questions along the way, it’s advisable to consult with a qualified attorney or tax professional for guidance.  If you need assistance, please contact The Woodlands Law Firm today!

  • Understanding Business Entities in Texas

    Understanding Business Entities in Texas

    As a Texas attorney, I often encounter clients who are unsure about the different types of business entities available to them. Choosing the right entity is crucial as it impacts liability protection and bookkeeping requirements. In this blog post, we will explore the differences between a corporation, a limited liability company (LLC), a series limited liability company (Series LLC), a partnership, and an assumed name, shedding light on the varying levels of liability protection and bookkeeping obligations associated with each.

    1. Corporation: A corporation is a legal entity separate from its owners (shareholders) and offers the highest level of liability protection. In Texas, corporations are typically formed as C corporations. Generally, under a C Corporation, shareholders’ liability is generally limited to the amount they invest in the corporation. Corporations must comply with certain formalities, such as holding regular meetings and maintaining proper records, to maintain their liability protection. They must also keep accurate financial records, including income statements, balance sheets, and cash flow statements. Notably, some people believe that an “S corporation” is a specific type of corporation. This is a misnomer, as the term “S corporation” is not a entity type per se, but rather a tax designation, as even an LLC can be taxed as a S Corp.
    2. Limited Liability Company (LLC): An LLC is a popular choice for small businesses due to its flexible management structure and liability protection. The owners of an LLC are known as members. In Texas, an LLC can be managed by its members or by managers appointed by the members. Members’ liability is generally limited to their investment in the LLC. LLCs in Texas are required to maintain proper records of their activities and keep financial records, although the level of formality is typically less stringent compared to corporations.
    3. Series Limited Liability Company (Series LLC): Texas is one of the few states that recognize the Series LLC, which allows for the creation of separate series within a single LLC. Each series operates as a distinct entity, with its own assets, liabilities, and members. The liability protection for each series is generally isolated from the others, offering a unique level of asset segregation. However, it’s important to note that the Series LLC structure is relatively new and complex, requiring proper maintenance and compliance to preserve the desired liability protection. Bookkeeping requirements for a Series LLC are similar to those of a traditional LLC, but additional care must be taken to track the activities and financials of each individual series.
    4. Partnership: A partnership is a business entity formed by two or more individuals who agree to share profits and losses. There are two primary types of partnerships: general partnerships and limited partnerships. In a general partnership, all partners have joint and several liability, meaning they are individually responsible for the partnership’s debts and obligations. In a limited partnership, there are general partners (who have unlimited liability) and limited partners (whose liability is generally limited to their investment). Partnerships in Texas are required to maintain proper records of their activities and keep financial records.
    5. Assumed Name: An assumed name, also known as a “doing business as” (DBA) name, allows an individual or entity to operate a business under a name other than their legal name. It’s important to note that an assumed name does not create a separate legal entity or provide liability protection. Instead, it is simply a way to conduct business under a different name. Assumed names must be registered with the appropriate county clerk’s office, and accurate records of the business’s transactions and financials should be maintained.

    Conclusion: Choosing the right business entity is crucial for both liability protection and maintaining proper bookkeeping records. Corporations offer the highest level of liability protection but come with more formalities. LLCs provide flexibility and reasonable liability protection, while Series LLCs allow for segregation of assets and liabilities within different series. Partnerships have different levels of liability based on their type, and assumed names are a way to operate a business under a different name but don’t provide liability.  If you are planning on starting a business entity, The Woodlands Law Firm can help you.  Please set up a consultation today.