Forming a Texas Business Corporation
A corporation is a legal entity that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its shareholders. When it is formed it becomes a separate entity from the people who own the stock of the corporation. For this reason, a corporation’s actions are made by the corporation and not by an individual person. This legal distinction is what separates the liability of the Texas corporation from the individual and is a major consideration in deciding to form a corporation.
Anyone can form a corporation in Texas. A corporation can form another corporation. Once the corporation is formed, the entity formed is responsible for all actions done in the corporate name. The new entity is required to file state and federal taxes and acquire any licenses to do business in the name of the corporation. The corporation can purchase insurance, own real estate and cars and other assets or personal property as if were a natural person. It is responsible for actions both good and bad done in its name. If a corporation fails, shareholders normally only stand to lose their investment, and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation’s creditors.
Corporations can exercise human rights against real individuals and the state, and they may be responsible for human rights violations. There are five core characteristics of a business corporation:
•Legal personality
•Limited liability
•Transferable shares
•Centralized management under a board structure
•Shared ownership by contributors of capital
Generally, the corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. Once the articles are approved, the corporation’s directors meet to create bylaws that govern the internal functions of the corporation, such as meeting the procedures and officer positions.
•Some of the advantages of a corporation are as follows:
•Shareholders have limited liability for the corporation’s debts or judgments against the corporation.
•Generally, shareholders can only be held accountable for their investment in stock of the company.
•A Texas corporation may deduct the cost of benefits it provides to officers and employees.
•A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 – $75,000; 34% tax on income from $57,001 – $100,000; 39% tax on income from $100,001 – $335,000; and 34$ tax on income over $335,001
There are some disadvantages to a corporation. The process of incorporating a business in Texas may require more time and money than other forms of organizations and the corporation may be monitored by federal, state and some local agencies and as a result require have more paperwork to properly comply with regulations. Incorporating may also result in higher overall taxes in some circumstances.
For answers to your questions on forming a business corporation in Texas, contact Dallas business attorney Mark Nacol with the Nacol Law Firm, P.C.
Are You Married to a Narcissist and Seeking to Divorce?
What is a narcissist? Narcissistic Personality Disorder or ‘NPD” is a mental disorder where the person has very inflated self-esteem issue and a serious need for admiration and special treatment from other people. Typical arrogant behavior and lack of empathy for other people causes many problems in all emotional areas of their lives and relationships.
Narcissists are also very aggressive and usually have impulsive tendencies, dangerous lifestyles involving cockiness, selfishness, manipulation and power motives. These individuals are usually very exciting personalities at first meeting, but later cause unfulfilling relationships resulting in anxiety and depression at the end of the day.
You have met the “most exciting” person in the world who has self-esteem problems and can’t get along with anyone, including you! The big problem is that you married this person and now you MUST FIND A SOLUTION TO THIS SITUATION AND GET A DIVORCE!
The marriage adventure is over. Your married life to your narcissist was a total disaster and you know that you need to get a divorce. Are you frightened that you could very well lose everything in this divorce from hell since you may lack the manipulating skills that your narcissist spouse skillfully uses on all aspects of his/her manipulative lifestyle?
Before you start the Divorce battle with your narcissist, you must “Stop Feeling and Start Thinking”! You have been emotionally battered and mutilated for years by this spouse, but now is the time to take over your life and your children’s lives and decide that Your family DOES NOT AND WILL NOT TAKE THIS ABUSE ANYMORE FROM YOUR SPOUSE!
Here are some tips on planning your exit from this marriage and Win control of your life and your family lives.
- BE PREPARED! If you are thinking of going through with this divorce, start your preparations now! You need total knowledge of your family’s financial situation. On our website you can pull off a blog “Texas Divorce Financial Checklist” (http://www.divorcedallastx.com/texas-divorce-financial-checklist/) which will give you a guideline on your financial information needed. Update this information immediately. Know who makes what and where all monies and assets are located. All banking and account information should be update for correct account numbers and balances. This will help you determine how much money you will need to live on and what you can plan on your part of the assets. This will also give you an idea on what funds you can use to hire a competent attorney to help you get through the divorce.
- RESEARCH PRIORITY ISSUES! Educate yourself on divorce issues, such as child custody and visitation, who gets the house, property separation, spousal maintenance and child support in your state. Prioritize what is important to you and prepare questions to ask an attorney on what your expectations should be. All or nothing does not work. Set Reasonable goals.
- START INTERVIEWING ATTORNEYS to find a good match to help you through this complicated divorce. Look for an attorney who deals with difficult family law cases concerning emotional/domestic abuse, high conflict individuals, or contested child custody. Even if you are served divorce papers, take your time finding an experienced attorney who will be your advocate in the divorce. DO NOT HIRE A NARCISSIST ATTORNEY! This would be a disaster!
- Help Plan your Divorce Game plan! No one knows your Narcissist spouse or family situation better than you. What arguments/facts will they come up with to hurt your position? Discuss your entire situation with you attorney and work together on your divorce approach. Your attorney will help you determine your final goals through experience from his previous experience in such matters.
- STAY REASONABLE AND TRY TO KEEP EMOTIONS STEADY! Don’t let your narcissist spouse turn you into a narcissist! You cannot win this way! Think logical, use true facts, and don’t go overboard financially battling with him/her. If this gets settled, goes to mediation, or ever a jury trial, it will be over and you will greatly improve your life.
You married a Narcissist and now you are divorcing him/her. You must be prepared knowing that your spouse will now be able to participate in the greatest show of their lives, “THE DIVORCE”. Your spouse will try to show what a horrible, ungrateful, unworthy person/parent you are and how badly you hurt your innocent victim/martyr spouse.
Irrelevant are your feelings and emotions. By thinking and planning your divorce strategy with a qualified attorney you will be prepared for battle and to live your life as you choose.
Remember the focal point of his/her narcissistic behavior is the fear of abandonment and threat to his/her self-worth. Be well-prepared for the battle ahead. The key is to not respond emotionally and let it drain you. Observe their behavior as a disorder, and don’t absorb it as a literal or personal attack on you.
If you mitigate for his/her drawn-out narcissistic rage and know that he/she may attempt to destroy you, you will less likely feel bullied or defeated. Be forewarned, you will be less victimized by something you expect.
Contract Killers : Arbitration and Selected Forum Provision
Contracts are the concrete pillars of our capitalistic society and govern all transactions promoting trust and stability within our American culture. An individual that enters a complex contract regarding a commercial lease, any professional services, or business and franchise agreements must be aware of two killer provisions that may be game changers if the need for litigation arises.
First, any individual prior to entering a binding contract must first read the contract thoroughly to see if there is an arbitration provision. An arbitration provision has the power to tie the hands of any contracting party. An arbitration provision forces a contracting party into a tribunal of selected arbitrators thus precluding a contracted party from obtaining their day in Court. These provisions must be carefully considered and examined before an individual signs a contracted agreement. This is a non-extensive list of potential problems an arbitration provision may cause:
- Location, Location, Location. An arbitration provision may dictate the location of the arbitration process;
- Attorney’s fees. An arbitration provision may dictate who pays for the attorney’s fees during the arbitration process;
- Selection of arbitrators. An arbitration provision may dictate the selection process used to determine the tribunal of arbitrators which will hear the case;
- Arbitration Provisions are favored by Texas and the Supreme Court and it is difficult to invalidate an arbitration provision.
Second, any individual prior to entering a binding contract must next read the contract thoroughly and determine if a Selected-Forum provision exists. A Selected-Forum provision may dictate (1) the choice of law that will be used while interpreting the contact and (2) the venue or jurisdiction that will apply. Texas favors Selected-Forum provisions and these provisions are difficult to invalidate. This is a non-extensive list of potential problems with Forum-Selection clauses:
- Location, Location, Location. A Forum-Selection clause may force the contracted parties to bring a suit in another state other than the state the contract was signed in;
- Choice of Law. The Selected-Forum Clause may force the contracted parties to utilize another State’s law;
- The Selected-Forum Clause may also include torts. If the Selected-Forum Clause is specific enough it may encompass torts (fraud, negligent misrepresentation, tortious interference with contract) and preclude a party from bringing a tort dispute in a State to which one of the parties reside;
- Selected-Forum clauses are favored by Texas and are difficult to invalidate.
Be wary of arbitration provisions and Selected-Forum clauses. They both may be deal breakers for certain businesses. If you have signed a contract with these provisions there may be remedies but you must consult an experienced attorney.
Julian Nacol, Attorney at Law
Nacol Law Firm P.C.
(972) 690-3333
Defining Real Estate Documents (Property Deeds, Deeds of Trust, and Real Estate Lien Note (Promissory Note)
A deed is a legal instrument that transfers a property right in real estate. The most common types of property deeds are as follows:
- Quitclaim Deed
- Warranty Deed
-Special Warranty Deed – with or without retained Vendor’s Lien
-General Warranty Deed - Deed Without Warranty
Other real estate documents discussed herein include:
- Deed of Trust
- Real Estate Lien Note (Promissory Note)
- Deed of Trust to Secure Assumption
Quitclaim Deed
Quitclaim deed conveys any title, interest, or claim of the grantor in the real property, but it does not profess that the title is valid nor does it contain any warranty or covenants of title. Thus, a quitclaim deed does not establish title in the person holding the deed, but merely passes whatever interest the grantor has in the property.” Diversified, Inc. v. Hall, 23 S.W.3d 403 (Tex. App.–Houston [1st Dist.] 2000, pet. denied).
There seems to be some misconception that a Quitclaim Deed is a simple and inexpensive means of selling land or solving real estate problems. People are shocked to learn that Quitclaim Deeds are sometimes worthless in Texas.
Does this mean that a Quitclaim Deed should never be used? No.
Quitclaim Deeds can be useful in clearing title in some limited circumstances, such as when there is a question about whether a particular heir might have a claim to the property of an estate, or whether a person may have acquired title by adverse possession (“squatter’s rights”). However, in most cases it is preferred to use another kind of deed.
Warranty Deeds
The Warranty Deed is a legal document where the seller, or grantor, guarantees to the buyer, or grantee, that the real property being purchased is free from any mortgages, liens, or other encumbrances. If it is a general warranty deed, the guarantee extends back to the property’s origin. In contrast, if it is a special warranty deed, the seller only guarantees that there are no mortgages, liens, or other encumbrances while he or she has owned the property.
A warranty deed thus provides a method of transferring ownership or title in real estate that offers protection to the buyer. This is the case because the seller warrants, or guarantees, that he or she legally owns the property. An individual purchasing property or a bank lending money for the seller to purchase the property typically does not want to discover that the property has tax or mechanical liens or outstanding mortgages after the transaction is complete. If a seller provides a warranty deed and then the buyer later discovers an unpaid lien or other financial encumbrance, the buyer can seek legal action against the seller. Because sellers could die, have limited financial resources, or declare bankruptcy, real estate transactions involving warranty deeds often are accompanied by title searches and title insurance.
A Special Warranty Deed covenants to the buyer that the seller has not personally done anything to adversely affect the title being conveyed since inception of Seller’s title to the date of conveyance.
A General Warranty Deed covenants with the buyer that not only has the seller not personally done anything to adversely affect the title being conveyed, but neither has anyone else who has ever owned the property ostensibly as far back as the original Spanish land grants.
Deed Without Warranty
Another form of deed, which is neither a Quitclaim Deed nor a Warranty Deed, but rather something in between is a Deed Without Warranty. Like the Warranty Deed, a Deed Without Warranty uses the “grant, sell and convey” language to establish title in the buyer. Like a Quitclaim Deed, though, a Deed Without Warranty makes no warranties or covenants of title, so the seller has no liability for title defects. A Deed Without Warranty is rarely appropriate in a sale transaction; however, because it offers much greater protection to the buyer without any additional risk to the seller it should be considered as an alternative whenever a Quitclaim Deed might otherwise be used.
Other Real Estate Documents
Deed of Trust
A Deed of Trust is a deed wherein legal title in real property is transferred to a trustee, which holds the deed as security for a loan (debt) between a borrower and lender, e.g. home mortgage documents.
Transactions involving trust deeds are normally structured so that the lender gives the borrower the money to buy the property, the seller executes a Special Warranty Deed conveying the property to the Purchasor/Borrower, and the borrower immediately executes a trust deed conveying the property to the trustee to be held in trust for the lender. Trust deeds differ from mortgages in that trust deeds always involve at least three parties, where the third party holds the legal title, while in a mortgage, the mortgagor gives legal title directly to the mortgagee. In either case, equitable title remains with the borrower.
Real Estate Lien Note (Promissory Note)
A Promissory Note is a written promise to repay a loan or debt under specific terms – usually at a stated time, through a specified series of payments, or upon demand.
A promissory note will identify the parties, the amount of the obligation, some form of recitation of the consideration for the obligation (that is, what the debtor received in return for signing the note) and will usually include the terms of repayment, the interest rate which will apply, if any. It may also include an “acceleration clause” which will make the entire amount of the note due if a payment is missed.
Deed of Trust to Secure Assumption
A Deed of Trust to Secure Assumption is a second security trust document (or third or fourth, depending on how many prior liens are already in place at the time of a divorce or other assumption conveyance), which gives a party the right to take a home back if an ex-spouse or other party does not timely pay the mortgage. In this way, the Deed of Trust to Secure Assumption secures the ex’s obligation to assume the unpaid debt on the home
The Unknown Descendant that May Inherit?
Creating a Will is extremely important for individuals that have a sizeable estate in the Dallas and DFW metroplex. Time and time again, individuals refuse to properly prepare for death and do not see the proper preparation of a legal and valid will as a necessity.
When you refuse to prepare a Will, then your entire estate will pass through the intestate process. Intestate rules apply if: (1) there is no will, (2) the will does not completely dispose of the entire estate, or (3) there is a pretermitted child/adopted child born after the will’s execution.
In certain situations, a child born outside of a marriage may still claim inheritance rights per the rules of Intestate succession. Nonmarital children may establish inheritance rights from the alleged father if the presumption of paternity is proven in court. Paternity is presumed if one of the following elements are met per Tex. Fam. Code § 160.204:
- The child was born during (or within 300 days after) the marriage of the man and the child’s mother;
- During the first two years of the child’s life, the man continuously resided in the same household as the child and represented to others that the child was his; or
- The parties married after the Child’s birth and the man voluntarily asserted his paternity of the child in one of the following ways:
a. The assertion of paternity is in a record filed with the Bureau of Vital Statistics;
b. The man was voluntarily named as the Child’s father on the birth certificate; or
c. The man promised in a record to support the child as his own.
In many cases a child that was born out of wedlock may still inherit from the father’s estate if the above mentioned actions can be proved. Depending on the estate, this ability to prove the presumption of paternity can have a great impact on the allocation of the estate’s assets.
Paternity may be rebutted, even if the presumption is proved by a preponderance of evidence, by a DNA test. DNA testing is the only option to rebut the presumption of paternity. Depending on the estate and the desires of all parties involved, a Judge may order that the body be dug up for a DNA sample of the deceased. This is rare, but the Court does have the authority.
It is important to remember that the Statute of Limitations to establish inheritance rights or the presumption of paternity begins at the date in which the father died. The statute of limitations is four years, which mean any potential claim must be brought within four years of the individual’s death.
If you are a nonmarital child or born out of wedlock in the DFW area, you may still inherit as a matter of law. A will created prior to the birth of a nonmarital child will not cut off the child from his or her rightful inheritance. For situations like this please contact Nacol Law Firm to acquire an experienced attorney to navigate through intestacy laws and probate.
NACOL LAW FIRM P.C.
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Dallas, Texas 75231
972-690-3333
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization