A Summary

The Texas single member LLC is a very common vehicle because many businesses are only owned by one person. Before the Texas limited liability company was available as a choice of business entities, most single owners operated as a sole proprietorship.  This was because their businesses were too simple to afford the costs and maintenance of a corporation and the single member LLC in Texas was not yet available.

Given the low costs, ease of maintenance and most importantly the limited liability protection afforded by a Texas single member LLC to its owners, it is without doubt that a single owner business is better off operating through a single member LLC in Texas.

The Texas laws specifically allow for a Texas single member LLC.  For tax purposes, the single member LLC in Texas is considered a "disregarded entity" which means that operating your business through a Texas single member LLC as opposed to under a sole proprietorship does not complicate taxes in any way. 

It is taxed as if it were a sole proprietorship business (which means on your personal tax return), but you still get all the benefits of a single member LLC in Texas provided under the state LLC laws.

Another great benefit of the Texas single member LLC is that it is not required to have meetings or maintain the level of governance formalities as a corporation.  This simplifies the effort of maintaining a single member LLC in Texas and thus makes the cost and effort insignificant.

However, one of the biggest traps of a single member LLC in Texas is that because there is only one owner who does not have to answer to anyone else, he or she may forget that the Texas single member LLC exists and operate as if there is no LLC.  THIS IS A MISTAKE and can cause that owner to lose his/her liability protection.  It is always recommended that a Texas single member LLC have an Operating Agreement and have some minimal governance formalities that a multi-member LLC would have.  This create evidence and shows that the single member should fall under the protection afforded by the LLC laws.

In summary, creating a single member LLC in Texas is an affordable and simple process for obtaining substantial protection against business obligations. Just make sure that you properly maintain and operate the Texas single member LLC, show the public that the business is the single member LLC in Texas and maintain all paperwork and proper filings and fees.