Is a Single-Member LLC Protected in Texas?

Yes. A single-member LLC in Texas provides personal liability protection under Texas Business Organizations Code § 101.001. The LLC is a separate legal entity, and the owner is generally not personally liable for company debts or obligations. However, protection can be lost through fraud, inadequate capitalization, commingling funds, or personal guarantees.

How Protection Works

Texas law treats an LLC as a distinct legal entity separate from its owner. This means your personal assets—home, car, bank accounts—are shielded from business creditors and lawsuits against the LLC.

A single-member LLC receives the same liability protection as a multi-member LLC. You do not need multiple owners to maintain this shield under Texas law.

Charging Order Protection

Texas Business Organizations Code § 101.112 provides an additional layer of protection. If a creditor obtains a judgment against you personally, they cannot seize your LLC membership interest or force the LLC to liquidate. Their remedy is limited to a charging order—a court order directing the LLC to pay distributions to the creditor if and when they are made. This prevents creditors from dismantling your business.

Requirements to Maintain Protection

Protection depends on treating the LLC as a genuine business entity:

Separate bank account: Maintain dedicated business finances. Commingling personal and business funds weakens liability protection.
Operating agreement: While not legally required under § 101.052, a written agreement strengthens the LLC's legitimacy and clarifies management structure.
Records: Document business decisions and maintain accounting records.

When Protection Fails

Liability protection does not apply if you:

Personally guarantee a debt or contract
Commit fraud or illegal acts
Operate the LLC as a mere alter ego with no separation between personal and business affairs
Undercapitalize the LLC to defraud creditors
Ignore corporate formalities entirely

Courts may pierce the veil and hold you personally liable under these circumstances.

Next Steps

Draft a written operating agreement to document your LLC's structure. Open a separate business bank account immediately. Keep detailed records of all business transactions. Consult a Texas business attorney if you face creditor claims or need liability strategy guidance.

This is general information, not legal advice.