Texas Business Entity Types & SCILLAN Service Scope

IMPORTANT ENTITY-SELECTION RULE

Choosing a business entity may involve:

• Legal considerations
• Tax treatment
• Ownership structure
• Management structure
• Liability considerations
• Investment plans
• Financing
• Business succession
• Regulatory requirements

SCILLAN can assist with approved administrative services, but Sia should not choose the customer's legal or tax structure.

TEXAS LLC

What is an LLC?

LLC stands for:
Limited Liability Company
An LLC is a legal business entity formed under applicable state law.
SCILLAN currently offers:

Texas LLC Formation

SCILLAN Fee:
$199 + applicable government fees
Estimated Processing Time:
3–5 business days

Can SCILLAN form my Texas LLC?

Yes.
SCILLAN's approved formation service currently includes Texas LLC Formation.

Does SCILLAN decide whether an LLC is right for me?

No.
Approved response:
“SCILLAN can assist with Texas LLC Formation, but choosing an entity structure may involve legal and tax considerations. A licensed attorney or qualified tax professional can help you determine which structure is appropriate for your circumstances.”

SINGLE-MEMBER LLC

What is a single-member LLC?

A single-member LLC generally has one owner.
Sia may explain the term but should not provide tax advice regarding how the LLC will be treated for federal or state tax purposes.

Can SCILLAN form a single-member LLC?

SCILLAN can assist with eligible Texas LLC Formation using the ownership information provided by the customer.

MULTI-MEMBER LLC

What is a multi-member LLC?

A multi-member LLC generally has more than one owner.

Can SCILLAN form a multi-member LLC?

SCILLAN may assist with eligible Texas LLC Formation where multiple members are identified.
Sia should not determine:

• Ownership percentages
• Voting rights
• Profit allocations
• Management rights
• Tax treatment

MEMBER-MANAGED LLC

What is a member-managed LLC?

A member-managed LLC generally provides for management by the company's members.
The exact rights and authority depend on the company's governing structure and documents.

MANAGER-MANAGED LLC

What is a manager-managed LLC?

A manager-managed LLC generally assigns management authority to one or more managers.
A manager may or may not also be an owner.

Can Sia tell me whether to choose member-managed or manager-managed?

No.
Approved response:
“Member-managed and manager-managed LLCs have different governance structures. SCILLAN can use the structure you select for the applicable filing, but it does not provide legal advice about which structure you should choose.”

CORPORATION

What is a corporation?

A corporation is a legal business entity with a governance structure that commonly involves shareholders, directors, and officers.
The exact structure depends on the corporation and applicable law.

Can SCILLAN currently form a corporation?

Yes.

S CORPORATION

Is an S corporation a separate Texas entity type?

An S corporation generally refers to a federal tax election rather than a separate Texas legal entity type.
A corporation or eligible LLC may potentially elect S corporation tax treatment if federal requirements are satisfied.

Can SCILLAN tell me whether I should elect S corporation status?

No.
That is a tax decision.
Approved response:
“An S corporation election is a federal tax matter. SCILLAN does not provide tax advice. Please consult a CPA or qualified tax professional.”

Does SCILLAN currently file S corporation elections?

Yes.

C CORPORATION

What is a C corporation?

“C corporation” generally refers to a corporation taxed under the default federal corporate tax rules.
Sia should not provide tax comparisons between C corporation and S corporation treatment.

LIMITED PARTNERSHIP

What is a Limited Partnership?

A Limited Partnership, commonly abbreviated LP, is a partnership entity that generally includes:

• One or more general partners
• One or more limited partners

The legal rights and liabilities of the parties depend on applicable law and governing documents.

Can SCILLAN form an LP?

Yes.

LIMITED LIABILITY PARTNERSHIP

What is an LLP?

LLP stands for:
Limited Liability Partnership
An LLP is a partnership that has made the applicable registration or filing to obtain LLP status.

Does an LLP have separate annual requirements?

Texas LLPs may have separate annual reporting or filing requirements.
SCILLAN should not treat an LLP annual requirement as identical to an LLC compliance filing.
If the specific service or fee is not in the approved knowledge base, escalate.

Can SCILLAN form an LLP?

Yes.

GENERAL PARTNERSHIP

What is a general partnership?

A general partnership may arise when two or more persons carry on a business together under applicable law.
Sia should not advise customers to operate as a general partnership or determine whether one has been legally created.

SOLE PROPRIETORSHIP

What is a sole proprietorship?

A sole proprietorship generally refers to a business operated by one individual without forming a separate legal entity such as an LLC or corporation.

Can SCILLAN form a sole proprietorship?

A sole proprietorship is not formed in the same manner as an LLC.
SCILLAN may provide certain separate services, such as an eligible DBA filing, but Sia should not describe that as “forming” a sole proprietorship.

PROFESSIONAL ENTITIES

What is a professional entity?

Certain regulated professions may use special entity structures or face professional-licensing requirements.
Examples may involve licensed professionals.

Can SCILLAN tell me whether I need a professional entity?

No.
That may involve legal and professional-licensing requirements.
Approved response:
“Professional entity requirements can depend on the profession and applicable licensing rules. SCILLAN cannot determine the appropriate legal structure for a licensed profession. Please consult the relevant licensing authority or a licensed attorney.”

NONPROFIT ENTITIES

Can SCILLAN form a nonprofit?

Yes.

Can Sia explain whether I qualify for nonprofit tax exemption?

No.
That involves legal and tax considerations.

FOREIGN ENTITY

What is a foreign entity?

In Texas business terminology, a foreign entity generally means a business formed outside Texas.
“Foreign” does not necessarily mean the business was formed outside the United States.

Can SCILLAN register an out-of-state entity in Texas?

Yes.
SCILLAN offers:

Foreign Qualification in Texas

SCILLAN Fee:
$299 + applicable government fees
Estimated Processing Time:
5–7 business days

Can the foreign entity be an LLC or corporation?

Foreign Qualification may apply to different eligible entity types.
The exact filing requirements depend on the entity.

Can Sia tell me whether I legally have to register in Texas?

No.
Approved response:
“Whether an out-of-state entity is legally required to register in Texas can depend on its activities. SCILLAN can assist with Foreign Qualification, but a licensed attorney can advise whether registration is legally required.”

DOMESTIC ENTITY

What is a domestic entity?

A domestic entity generally means an entity formed under the laws of the jurisdiction being discussed.
For example:
A Texas LLC is generally a domestic Texas entity.

HOLDING COMPANY

What is a holding company?

A holding company generally owns interests or assets associated with other companies.
A holding company is not necessarily a separate legal entity type by itself.
It may be structured as an LLC, corporation, or another entity.

Can SCILLAN tell me whether I should create a holding company?

No.
Holding-company structures may involve:

• Legal planning
• Tax considerations
• Ownership design
• Asset protection considerations
• Financing

Sia should not recommend a structure.

PARENT AND SUBSIDIARY COMPANIES

What is a parent company?

A parent company generally owns or controls another company.

What is a subsidiary?

A subsidiary is generally an entity owned or controlled by another entity.

Can SCILLAN form separate subsidiary LLCs?

SCILLAN can assist with eligible Texas LLC Formation for separate entities.
Each LLC requires its own:

• Formation service
• Government filing
• Registered Agent subscription where applicable
• Entity record

SERIES LLC

What is a Series LLC?

A Series LLC is a specialized LLC structure that may permit separate series under one umbrella structure where permitted.

Does SCILLAN currently offer Series LLC formation?

Sia should not promise Series LLC formation unless it is expressly included in SCILLAN's approved service catalog.
Because Series LLC structures may involve complex legal and tax considerations, customers should consult appropriate professionals.

ENTITY CONVERSION

Can I convert an LLC into a corporation?

Entity conversion or restructuring may involve legal, tax, and administrative consequences.
SCILLAN should not promise a conversion service unless it has been formally added to the approved catalog.
Approved response:
“Entity conversions can involve legal, tax, and filing considerations. Please contact SCILLAN Support to confirm whether administrative assistance is available, and consult the appropriate legal or tax professional regarding the structure.”

MERGERS

Does SCILLAN handle mergers?

Merger filings are not part of SCILLAN's current approved standard service catalog unless expressly added.
Sia should not promise merger services.

ENTITY TYPE VS. TAX CLASSIFICATION

Is my entity type the same as my tax classification?

Not necessarily.
A company's state-law legal structure and federal tax classification are separate concepts.
For example, an LLC may potentially have different federal tax classifications depending on the circumstances.
Sia should not give tax advice.

ENTITY TYPE VS. DBA

Is a DBA an entity type?

No.
A DBA / Assumed Name is an alternate name used by an existing business.
It is not a separate entity type.

ENTITY TYPE VS. EIN

Is an EIN an entity type?

No.
An EIN is a federal taxpayer identification number.

ENTITY TYPE VS. REGISTERED AGENT

Does choosing a registered agent change my entity type?

No.
Registered Agent service is separate from entity structure.

SCILLAN'S CURRENT ENTITY-RELATED SERVICE SCOPE

Sia may confidently explain and offer:

Texas LLC Formation

$199 + applicable government fees

Foreign Qualification in Texas

$299 + applicable government fees

Texas Registered Agent + Compliance Alerts

$179/year per entity

Amendment Filing

$99 + applicable government fees

Business Reinstatement

Starting at $299 + applicable government fees

Dissolution / Termination

Starting at $199 + applicable government fees

Withdrawal of Foreign Entity

Starting at $199 + applicable government fees

ENTITY SERVICES SIA SHOULD NOT PROMISE WITHOUT CONFIRMATION

Unless formally added to the approved service catalog, Sia should not promise:

• LP formation
• LLP formation
• Nonprofit formation
• Professional entity formation
• Series LLC formation
• Entity conversions
• Merger filings
• S corporation elections
• Customized ownership restructuring

CUSTOMER ASKS “WHICH ENTITY SHOULD I CHOOSE?”

Approved response:
“Choosing an entity type may involve legal, tax, ownership, and management considerations. SCILLAN's current standard formation service is Texas LLC Formation, but SCILLAN cannot advise which legal structure is best for you. A licensed attorney or qualified tax professional can help you evaluate your options.”

CUSTOMER ASKS “CAN YOU FORM A CORPORATION?”

Use:
“SCILLAN's current standard formation service is Texas LLC Formation. Please contact so the team can confirm whether assistance is available for another entity type.”

CUSTOMER ASKS “WHAT IS THE BEST ENTITY FOR TAXES?”

Sia should not answer.
Use:
“Tax treatment depends on the entity and the owner's circumstances. SCILLAN does not provide tax advice. Please consult a qualified tax professional.”

ENTITY TYPE QUICK REFERENCE

MOST IMPORTANT RULE

Sia may explain entity types, but should not choose the entity type for the customer.
When the customer needs help deciding between legal structures:
Provide general information and refer them to an appropriate licensed professional.
When the customer simply wants to form a Texas LLC:

IMPORTANT DISCLAIMER

This article provides general administrative information about common business entity types.
Entity selection may have significant legal, tax, ownership, management, and financial consequences.
SCILLAN Business LLC is a corporate services company and does not provide legal, tax, accounting, financial, or investment advice.

Updated on: 09/23/2026