Answers in plain English
Frequently Asked Questions
Community bank transactional work
How do I choose a lawyer for a Texas community bank?
There is no official ranking of bank lawyers in Texas, so look for a firm whose daily work is community banking. Ask how long the firm has represented banks, whether it handles both corporate and regulatory work, and whether its lawyers understand your regulators' expectations and exam process, your board, and your market. Peer recognition and trade-group involvement are also useful signs. Kennedy Sutherland LLP has represented banks since the firm was founded in 1983 and works with community banks across Texas from offices in San Antonio and Austin. Managing partner Dub Sutherland is based in Fredericksburg and leads the firm's Hill Country practice.
Do I need a bank lawyer to buy or merge with another community bank in Texas?
Yes, in almost every case. Buying or merging with another bank involves a purchase or merger agreement, due diligence on loans, deposits and contracts, often a fairness opinion from a financial adviser, board and shareholder approvals, and applications to the regulators who must approve the deal, with the Department of Justice reviewing competitive effects. Depending on the charters involved, that can include the FDIC, the OCC, the Federal Reserve, the Texas Department of Banking and, for state savings banks, the Texas Department of Savings and Mortgage Lending. Securities rules may also apply if stock is part of the price. A lawyer who regularly handles bank deals keeps these pieces moving together, spots issues that can delay approval, and protects your bank in the contract terms.
How does a Texas community bank buy or sell a branch?
A branch purchase or sale usually follows a set path. The banks agree on a purchase and assumption agreement that spells out which deposits, loans, real estate and equipment move, and at what premium or price. Both banks review the branch's customer accounts, leases and employees. The buyer files an application with its primary federal regulator, and state-chartered banks also deal with the Texas Department of Banking. Customers must receive advance notice, and there are separate rules for closing a branch. After approval, the banks handle the conversion of accounts and systems at closing. A lawyer drafts and negotiates the agreement, prepares the applications and notices, and runs the closing checklist. Timing commonly runs several months, depending on regulator review.
What does a law firm do for a community bank's board of directors?
A law firm helps a bank board do its job well and protect itself. Typical work includes advising directors on their legal duties, preparing or reviewing minutes and committee charters, reviewing insider loans under Regulation O, updating bylaws and policies, handling holding company and shareholder matters, and guiding the board through mergers, capital raises, and succession planning. Counsel also helps the board respond to examination findings and enforcement issues and can provide director education. For many community banks without an in-house lawyer, outside counsel serves as the board's go-to resource for questions that come up between meetings. Kennedy Sutherland LLP has represented banks, bank holding companies and their directors, officers and shareholders since 1983.
How do community banks raise capital through a private stock offering?
A community bank or its holding company can raise capital by selling common or preferred stock, or by issuing subordinated debt, to existing shareholders, local investors or institutional buyers. Most community banks rely on exemptions from SEC registration, such as private placements to accredited investors or intrastate offerings, and must also follow Texas securities rules. The process usually includes a board decision on the amount and terms, a valuation, an offering document that fairly describes the bank and its risks, subscription agreements, and any regulatory notices that apply to new controlling shareholders. Careful disclosure matters, because securities laws hold the issuer responsible for misleading statements. A lawyer helps choose the right exemption, prepares the documents, and keeps the offering compliant.
How do I form a bank holding company in Texas?
Forming a bank holding company usually means creating a new corporation, having bank shareholders exchange their bank shares for holding company shares, and getting approval from the Federal Reserve, which supervises bank holding companies. The Texas Department of Banking may also be involved for state-chartered banks. Steps generally include a board plan, a reorganization agreement, shareholder approval, a Federal Reserve application or notice, and tax planning so the exchange is tax-free where possible. Owners often form a holding company to make it easier to raise capital, borrow at the holding company level, buy other banks, or plan for ownership succession. A lawyer coordinates the structure, filings and shareholder communications.
What should a community bank review before signing a fintech or core vendor contract?
Before signing a core processor, fintech or other major vendor contract, a community bank should review the term and renewal terms, termination rights and fees, data ownership and return at the end of the contract, security and breach-notice duties, audit and examination access, service levels and remedies, limits on liability, and the vendor's subcontractors. Federal banking agencies issued joint guidance on third-party risk management in June 2023 (the agencies proposed replacement guidance in September 2026), and examiners expect banks to show due diligence, contract review, and ongoing monitoring of key vendors. Fintech partnerships raise added questions about compliance responsibility, customer complaints and marketing. Having counsel review the contract before signing is far easier than renegotiating a long-term agreement later. Kennedy Sutherland LLP reviews vendor and fintech agreements for banks.
How do bank owners plan for ownership succession or an exit?
Bank owners usually plan an exit or succession by deciding first what they want: keep the bank in the family, sell to local investors or management, merge with another bank, or sell outright. Each path has legal and tax consequences. Common tools include shareholder or buy-sell agreements, a holding company, an employee stock ownership plan, estate planning for controlling shareholders, and planning for regulatory approval of any new controlling owner. For Subchapter S banks, a transfer must not break the S election, for example by moving shares to an ineligible shareholder. Planning years ahead gives owners more options and better value. A lawyer works with the owners, the board, and their tax and estate advisers to design and document the plan.
Can a small Texas bank hire outside general counsel instead of an in-house lawyer?
Yes. Many community banks are too small to justify a full-time in-house lawyer but still need regular legal help with loans, vendor contracts, employment questions, board matters and compliance. An outside general counsel arrangement gives the bank a set team that knows its people, policies and history, usually for a predictable monthly or annual fee. The bank gets faster answers and fewer surprises, and the board gets a consistent adviser. It works best when the scope is clear: which tasks are included, how quickly requests are answered, and how larger projects such as mergers or capital raises are priced. Kennedy Sutherland LLP offers this kind of ongoing counsel to banks. Fixed-fee packages available. Call 210.259.3885 for a quote.
Bank compliance
What is Regulation O and how does it affect loans to bank insiders?
Regulation O is a Federal Reserve rule that limits how banks lend to their insiders: executive officers, directors, principal shareholders, and companies they control. In general, insider loans must be made on substantially the same terms, including interest rates and collateral, as comparable loans to outsiders, and must not involve more than normal risk. Larger insider loans need prior approval by the board, with the interested person not voting. There are also limits on total lending to each insider and to all insiders together, and tighter limits on loans to executive officers. Banks must keep records of insiders and their related interests. Mistakes can lead to examination criticism or penalties, so banks should review insider lending policies and lists regularly.
How often should a community bank update its lending and compliance policies?
Most community banks review key policies at least once a year, and many regulators expect board approval of certain policies on an annual basis. Lending, BSA and anti-money-laundering, information security, vendor management and insider lending policies are common examples. Policies should also be updated whenever a law or regulation changes, the bank adds a new product or delivery channel, an exam raises findings, or the bank's size or risk profile shifts. An outdated policy that staff do not follow can be worse than none, because examiners compare written policy to actual practice. A practical approach is a yearly calendar that spreads reviews across the year and records board approval in the minutes. Kennedy Sutherland LLP reviews and updates bank policies.
What does a bank compliance policy review include?
A bank compliance policy review usually starts with collecting current policies, recent exam reports and any audit findings. Counsel then compares each policy to current federal and Texas law and regulatory guidance, checks that it matches how the bank actually operates, and flags gaps, outdated references and conflicting provisions. Common areas include lending and credit, Regulation O, BSA and anti-money-laundering, consumer protection, fair lending, privacy and information security, vendor management, and deposit operations. The result is typically a marked-up set of policies with a short summary of changes for management and the board. Some banks also use the review to build a calendar for future updates. Fixed-fee packages available. Call 210.259.3885 for a quote.
How should a bank respond to findings from a regulatory exam?
Start by reading the findings carefully and sorting them by seriousness, from matters requiring attention to recommendations. The board should be briefed promptly, because regulators expect directors to oversee the response. A written response usually acknowledges each finding, describes the corrective action, names who is responsible, and gives realistic deadlines. Commitments should be specific and achievable, since examiners will check them at the next exam. If the bank disagrees with a finding, it can respond factually and, in some cases, use the agency's informal or formal appeal process. Serious findings or a proposed enforcement action call for legal counsel right away. Counsel can help draft the response, revise policies, and keep the record clean.
What are a bank director's legal duties in Texas?
Under Texas law, bank directors owe duties of care and loyalty to the bank. The duty of care means acting in good faith, staying informed, asking questions, and using reasonable judgment when making decisions. The duty of loyalty means putting the bank's interests ahead of personal interests, disclosing conflicts, and not taking business opportunities that belong to the bank. Courts generally protect informed, good-faith business decisions under the business judgment rule. Federal regulators also expect directors to oversee management, approve key policies, monitor risk and respond to exam findings, and they can hold directors responsible for unsafe practices. Good minutes, regular reports, and director training help show that the board did its job.
What third-party risk rules apply when a bank works with a fintech partner?
In June 2023, the Federal Reserve, FDIC and OCC issued joint final guidance on managing risks from third-party relationships, including fintech partners. It expects banks to plan before entering a relationship, perform due diligence on the partner, negotiate contracts that protect the bank, monitor the partner over time, and plan for an orderly exit. The level of oversight should match the risk and importance of the activity. Key contract points include compliance responsibilities, data security, complaint handling, audit and examination rights, and termination. The bank remains responsible for compliance with consumer protection and anti-money-laundering laws even when a partner performs the work. In September 2026 the agencies proposed replacement guidance (comments due December 16, 2026) and issued a statement on community banks' work with core service providers; the 2023 guidance stays in effect until the new guidance is final. Kennedy Sutherland LLP helps banks review and structure fintech partnerships.
Sources: Proposed third-party risk management guidance (FDIC, Sept. 11, 2026); Comment period extended to Dec. 16, 2026 (OCC, Nov. 13, 2026). Reviewed November 15, 2026.
Does a community bank need a lawyer for BSA and anti-money-laundering questions?
Many banks benefit from having a lawyer available for Bank Secrecy Act and anti-money-laundering questions, even if day-to-day compliance is handled by a BSA officer. Common reasons include drafting or updating the BSA program, answering questions about customer due diligence and beneficial ownership, handling subpoenas and law enforcement requests, deciding when to file suspicious activity reports and how to keep them confidential, responding to exam findings, and reviewing fintech or new product arrangements that raise money-laundering risk. Serious issues, such as a look-back review or a potential enforcement action, call for counsel early. A lawyer can also protect sensitive discussions under attorney-client privilege where it applies.
What new banking rules should Texas community banks watch this year?
Texas community banks should watch several areas this year. The OCC and FDIC adopted a final rule, published September 1, 2026 and effective November 2, 2026, that defines an "unsafe or unsound practice" for enforcement purposes and sets standards for when examiners issue matters requiring attention, with a focus on material financial risk. It applies to institutions those two agencies supervise. FinCEN also finalized a rule in August 2026 that ends beneficial ownership reporting for U.S. companies. Banks should also track changes to capital, community reinvestment and consumer protection rules, third-party and fintech risk expectations (including a September 2026 proposal to replace the 2023 interagency guidance), and data security and privacy requirements. The Texas Legislature's 2027 regular session opens in January 2027 and may change state laws that affect lending, real estate and business entities. Because rules shift often, banks should build a short regulatory update into board meetings. Kennedy Sutherland LLP publishes updates on its Financial Institutions blog at kslawllp.com.
Sources: OCC and FDIC final rule, 91 FR 56004 (Sept. 1, 2026); FinCEN final rule (Aug. 14, 2026); Correction, FR Doc. 2026-19312 (Sept. 22, 2026); Proposed third-party risk management guidance (FDIC, Sept. 11, 2026); Comment period extended to Dec. 16, 2026 (OCC, Nov. 13, 2026). Reviewed November 15, 2026.
Loan documentation
Can a law firm prepare loan documents for a community bank at a fixed fee?
Yes. Many law firms prepare commercial loan documents for community banks at a set fee per loan, based on the loan type. A fixed fee makes closing costs predictable for the bank and the borrower, and it encourages a steady, repeatable process. The fee usually covers the core documents, review of the borrower's organizational documents, and basic searches, while extras such as additional entities, negotiations with borrower's counsel, or out-of-state collateral are priced separately. Kennedy Sutherland LLP prepares commercial loan documents and offers fixed-fee loan documentation packages. Fixed-fee packages available. Call 210.259.3885 for a quote.
What documents does a Texas commercial real estate loan need?
A typical Texas commercial real estate loan includes a promissory note, a loan agreement for larger or more complex loans, a deed of trust that gives the bank a lien on the property, an assignment of leases and rents, guaranties from owners, and an environmental indemnity. Many loans also include a security agreement and UCC financing statement for fixtures and personal property, and for tenant-occupied property, subordination, non-disturbance and attornment agreements or estoppel letters. The bank's counsel also reviews the title commitment, survey, insurance and borrower's organizational documents, and sends closing instructions to the title company. Texas deeds of trust usually allow non-judicial foreclosure, which makes careful drafting important.
How fast can outside counsel turn around bank loan documents?
Turnaround depends on the loan type, how complete the bank's approval package is, and how quickly title and borrower documents arrive. Simple loans can often be documented within a few business days of receiving a complete request, while construction, SBA and multi-party loans take longer. The best way to speed things up is to send the approval or term sheet, borrower entity documents and title commitment together at the start, and to agree on a closing date early. Ask your counsel for a standard turnaround commitment by loan type and a rush option for urgent closings. Kennedy Sutherland LLP prepares commercial loan documents for community banks.
What should be in a construction loan agreement for a Texas bank?
A Texas construction loan agreement should cover the loan amount and budget, how and when draws are requested and funded, required inspections and lien waivers, retainage, the borrower's equity and when it must be spent, completion deadlines, cost overruns and change orders, insurance and bonding, and what happens if construction stops. The bank usually takes an assignment of the construction contract and the architect's agreement, with consents from the contractor and architect. Texas mechanic's and materialman's lien rules in Chapter 53 of the Property Code affect timing and priority, so the deed of trust should be recorded and work should not start before closing.
Who prepares documents for SBA 7(a) and 504 loans?
For SBA 7(a) loans, the lender or its counsel prepares the loan documents to match the SBA authorization and SBA's standard requirements, and some SBA forms must be used. For SBA 504 loans, there are two sets of documents: the bank prepares the first-lien loan documents, and the Certified Development Company and its counsel prepare the documents for the SBA-backed portion. USDA guaranteed loans follow a similar approach, with documents matched to the USDA conditional commitment. Because SBA and USDA can deny a guaranty for documentation errors, banks often use counsel who knows the program checklists. Kennedy Sutherland LLP prepares SBA and USDA loan documents for community banks. Call 210.259.3885 to discuss pricing.
What is different about agricultural and ranch loans in Texas?
Agricultural and ranch loans often involve large tracts of rural land, multiple tracts and owners, mineral and water rights, grazing and hunting leases, and collateral such as cattle, crops, equipment and government farm program payments. Texas homestead rules can protect up to 200 acres of rural land for a family (100 acres for a single adult) in many situations, which affects what can be pledged. Agricultural or wildlife-management appraisal for property tax, access easements and surveys also need attention. UCC filings for farm products and equipment have their own rules. In the Hill Country, wildlife-management valuations, wineries and short-term rentals add more questions. Careful title and collateral review protects the bank.
Should a bank use its own forms or have a lawyer draft each loan?
Bank forms work well for simple, routine loans when they are kept current and staff know how to use them. A lawyer should draft or review the documents when the loan is larger or unusual, involves real estate or construction, has several borrowers or guarantors, includes an SBA or USDA guaranty, or will be negotiated with the borrower's lawyer. Texas law also limits who may prepare documents that affect title to real estate, so many banks have a Texas lawyer prepare or review those documents. A practical middle ground is lawyer-maintained forms for simple loans and attorney-prepared documents for the rest. Kennedy Sutherland LLP prepares commercial loan documents for community banks.
How do I fix a loan that was documented wrong before it closed?
If you find a mistake before closing, stop and fix it before anyone signs. Common errors include the wrong legal name of a borrower or guarantor, missing signers or authority, incorrect property descriptions, terms that do not match the approval, and missing collateral documents. Correct the documents, confirm the borrower's organizational documents show who can sign, and recheck the title commitment and survey. If the error is found after signing but before funding, the parties can usually sign corrected documents or an amendment. If the loan has already closed, counsel can prepare correction instruments, modification agreements, or new UCC filings, depending on the problem. Acting quickly protects the bank's lien priority.
Subchapter S banks
Can a bank be an S corporation?
Yes. Since 1997, federal tax law has allowed banks and bank holding companies to elect Subchapter S status, which generally means the bank's income is taxed once, at the shareholder level, instead of at both the corporate and shareholder levels. A bank must meet the S corporation rules, including a limit of 100 shareholders (with family members counted as one), only eligible shareholders such as individuals, certain trusts, estates and some retirement accounts, and a single class of stock. Banks that used the reserve method for bad debts must change methods before electing. Many Texas community banks use the S election. Kennedy Sutherland LLP has helped banks and their owners with Subchapter S elections.
What are the pros and cons of an S election for a community bank?
The main benefit of an S election for a community bank is a single level of federal income tax: earnings pass through to shareholders and are not taxed again when distributed. That can raise after-tax returns and help with owner succession. The drawbacks include limits on who can own shares and how many shareholders the bank can have, a single class of stock (which limits some capital-raising options), and the fact that shareholders owe tax on their share of income even if the bank keeps the earnings, so banks usually pay tax distributions. Converting may trigger built-in gains tax on gains that existed at conversion if they are recognized within five years. A tax and legal review should come before any decision.
How does a bank convert from a C corporation to an S corporation?
Converting a bank from C corporation to S corporation status usually starts with a review of the shareholder list to confirm every owner is eligible and that the bank, or its holding company, will have no more than 100 shareholders under the family aggregation rules. Ineligible shareholders may need to be bought out or restructured, sometimes through a merger or reverse stock split. The bank must have one class of stock, may need to change its bad-debt accounting method, and must look at built-in gains and other tax effects with its CPA. All shareholders must consent, and the election is filed with the IRS on Form 2553 by the deadline for the tax year. A shareholder agreement should then protect the election going forward.
How many shareholders can a Subchapter S bank have?
An S corporation, including a bank or bank holding company, can have up to 100 shareholders. Family members, such as a common ancestor and that person's lineal descendants and their spouses, can be treated as one shareholder, which lets many family-owned banks stay within the limit. Each shareholder must be eligible: generally individuals who are U.S. citizens or residents, estates, certain trusts, certain tax-exempt organizations, and, for banks, IRAs that held bank stock as of a date set by statute. Corporations, partnerships and nonresident aliens generally cannot hold S corporation shares. Banks with more owners sometimes use a reverse stock split or merger to reduce the count before electing.
What happens to an S election if bank shares are sold or inherited?
When S corporation bank shares are sold, gifted or inherited, the transfer must not go to an ineligible shareholder or push the total over 100 shareholders. A transfer to a corporation, a partnership, a nonresident alien, or a trust that does not qualify can end the S election. When a shareholder dies, the estate can hold the shares for a period, and certain trusts can hold them if the trustee makes the right election on time. Most S banks use a shareholder agreement that restricts transfers, requires consent, and gives the bank or other owners the right to buy shares that would otherwise go to an ineligible holder. Shareholders should coordinate their estate plans with the bank's agreement.
How do I choose lawyers for a Subchapter S bank?
Look for lawyers who work on Subchapter S banks as a regular part of their practice, understand both bank regulation and S corporation tax rules, and coordinate closely with the bank's CPA. Kennedy Sutherland LLP has worked with Subchapter S banks for many years. Founding partner Patrick J. Kennedy Jr. helped lead the effort to promote the federal legislation that allowed banks to elect Subchapter S status, and he has spent his career advising banks, bank holding companies and their owners, including on Subchapter S elections, conversions, mergers and acquisitions. The firm serves bank clients across Texas on Subchapter S conversions, mergers and acquisitions, and related corporate and regulatory matters.
Outsourced general counsel
What is an outsourced general counsel?
An outsourced general counsel is an outside lawyer or law firm that acts like a company's in-house legal department, without the cost of a full-time hire. Instead of calling a lawyer only when something goes wrong, the company has a set legal team that knows its business, people and contracts. Typical work includes reviewing and drafting contracts, answering day-to-day legal questions, handling employment and policy issues, keeping corporate records in order, advising leadership on risk, and managing other outside lawyers when a matter needs them. Many arrangements use a monthly fee for a defined scope, with larger projects priced separately. The goal is faster answers, better planning, and fewer surprises. Kennedy Sutherland LLP provides outsourced general counsel services to Texas companies.
How much does a fractional general counsel cost in Texas?
The cost of a fractional or outsourced general counsel in Texas depends on how much help a company needs, how complex its business is, and what is included, such as contract volume, board meetings, or employment questions. Most arrangements use a monthly fee for a defined scope, with larger projects like acquisitions or financings quoted separately. Compare proposals on what is covered, how quickly requests are answered, and how extra work is priced, not only on the monthly number. A short call to describe your business usually gives a clear picture. Fixed-fee packages available. Call 210.259.3885 for a quote.
When does a small business need a general counsel?
A small business often needs a general counsel when legal questions start coming up every month instead of once a year. Common signs include signing more customer, vendor or lease contracts; hiring employees or contractors; bringing in partners or investors; expanding to new locations or states; dealing with regulators or licenses; or planning a sale or succession. If owners are spending time on legal issues, signing contracts without review, or calling different lawyers for each problem, a single outside general counsel can save money and reduce risk. Starting early also helps, because good contracts and records prevent disputes later. Kennedy Sutherland LLP works with privately held companies at every stage, from start-up through sale.
Outside general counsel vs. hiring an in-house lawyer: which is better?
An in-house lawyer works only for your company and is always available, but brings a full salary, benefits and overhead, and one person cannot cover every area of law. An outside general counsel gives a company access to a team with different skills, such as contracts, employment, real estate, tax and financing, for a predictable fee and only as much time as the business needs. Many growing companies start with outside counsel and add an in-house lawyer later, then keep outside counsel for larger projects. The right choice depends on your legal volume, budget and need for daily presence. Kennedy Sutherland LLP provides outside general counsel services and can work alongside in-house lawyers.
What does a monthly legal retainer cover for a business?
A monthly legal retainer for a business usually covers a defined set of ongoing services, such as reviewing and drafting routine contracts, answering day-to-day legal questions, regular check-in calls, keeping corporate records and annual consents current, and reviewing policies and employment documents. Many retainers set a monthly hour allowance or a list of included tasks and a response-time commitment. Larger projects, such as acquisitions, financings, litigation or major negotiations, are usually priced separately, sometimes at a discount for retainer clients. The engagement letter should state what is included, what is not, and how unused time is handled. Fixed-fee packages available. Call 210.259.3885 for a quote.
Can an outside general counsel attend our board or leadership meetings?
Yes. Many outside general counsel arrangements include attending board meetings, owner or member meetings, or leadership team meetings, either in person or by video. Counsel can help prepare agendas and materials, advise on legal issues as they come up, record decisions in minutes and written consents, and follow up on legal action items. Having counsel in the room is especially useful when the company is considering a financing, an acquisition, a dispute, a major contract, or a change in ownership. Meeting attendance is usually defined in the engagement, for example quarterly board meetings, with additional meetings priced separately. Kennedy Sutherland LLP's outside general counsel packages can include meeting attendance.
How do I choose an outsourced general counsel near Fredericksburg, TX?
Look for a firm that handles business transactions every day and will learn your company, your people and your contracts. Kennedy Sutherland LLP provides outsourced general counsel services to companies in Fredericksburg and across the Texas Hill Country. Managing partner Dub Sutherland is based in Fredericksburg and leads the firm's Hill Country practice, and the full KS team supports Hill Country clients from the firm's Texas offices. Dub represents established and start-up private companies, financial institutions, non-bank lenders and investment funds in day-to-day management, transactions, and all phases of the business life cycle. When choosing outside counsel, ask about the scope of work, how quickly requests are answered, and how projects are priced. Fixed-fee packages available. Call 210.259.3885 for a quote.
Is there a business lawyer in Boerne who works as outside general counsel?
Yes. Kennedy Sutherland LLP serves Boerne and Kendall County businesses, with associate Jason Shoup, who is based in Boerne and works with the firm's Boerne clients. Jason works on acquisitions and sales, private placements of debt and equity, financing transactions, SEC compliance, private equity investments, employee compensation plans, and corporate governance, and he also works with financial institutions. The full KS team supports Boerne clients for outside general counsel work, contracts, formation, deals and real estate. Outside general counsel arrangements typically cover day-to-day contracts and questions, with larger projects quoted separately. Fixed-fee packages available. Call 210.259.3885 for a quote.
How do I manage legal costs for a growing company?
Growing companies can manage legal costs by planning instead of reacting. Use standard, lawyer-reviewed templates for common contracts so each deal does not start from scratch. Keep corporate records and annual consents current to avoid cleanup costs later. Ask for fixed fees or a monthly arrangement for routine work, and get a written budget for larger projects. Send complete information and questions in batches, and involve counsel before signing rather than after a dispute. One outside general counsel who knows your business is usually more efficient than calling a different lawyer for each issue. Finally, review legal spending quarterly to see what can be standardized. Fixed-fee packages available. Call 210.259.3885 for a quote.
Startups and business formation
Should I form an LLC or a corporation in Texas?
Most Texas small businesses choose between a limited liability company (LLC) and a corporation. Both protect owners from most business debts when run properly. An LLC is flexible: owners set their own rules in a company agreement and can be taxed as a sole proprietorship, partnership, or, by election, an S or C corporation. A corporation has a more formal structure of shareholders, directors and officers, and is often preferred by venture investors or companies planning to issue stock options. Tax treatment, number of owners, investor plans and exit goals all matter. Talk with both your lawyer and your CPA before deciding. Kennedy Sutherland LLP helps owners choose and form the right entity.
How much does it cost to form an LLC in Texas with a lawyer?
The cost of forming a Texas LLC with a lawyer has two parts: the state filing fee for the certificate of formation, which is $300 with the Texas Secretary of State, and the lawyer's fee for advice and documents. A lawyer-prepared formation usually includes an entity-choice conversation, the certificate of formation, a company agreement tailored to the owners, an organizational consent, and guidance on the EIN and first-year filings. Multi-member LLCs cost more because the company agreement must cover each owner's rights, money and exit. Compare packages by what documents are included, not just the price. Fixed-fee packages available. Call 210.259.3885 for a quote.
What should a Texas LLC company agreement include?
A Texas LLC company agreement should cover who the members are and what each contributed; how profits, losses and cash distributions are shared; whether the company is managed by members or managers and how decisions are made; which decisions need unanimous or supermajority approval; whether and how members can transfer interests; buy-sell terms for death, disability, divorce, departure or deadlock; non-compete and confidentiality duties if any; tax matters, such as tax distributions; and how the company is dissolved. Without an agreement, the Texas Business Organizations Code supplies default rules that may not fit your business. Single-member LLCs also benefit from an agreement to support liability protection and plan for succession.
Do I need a lawyer to start a winery or tasting room in the Hill Country?
You are not legally required to hire a lawyer, but a winery or tasting room involves more legal steps than most small businesses. Common needs include choosing the entity and ownership structure, Texas Alcoholic Beverage Commission permits, federal TTB permits and label approvals, local zoning and health permits, real estate purchases or leases, vineyard and grape supply contracts, distribution agreements, event and venue contracts, employment documents, and investor agreements if partners are involved. Mistakes in permits or ownership disclosures can delay opening. A lawyer can map the steps, prepare the business documents, and coordinate with permit consultants. Kennedy Sutherland LLP helps Hill Country businesses with formation, contracts, real estate and financing.
How do I bring in investors without breaking securities laws?
Most private companies raise money under exemptions from registering with the SEC, such as Rule 506(b) or 506(c) of Regulation D, and must also comply with Texas securities rules. Key steps include deciding who can invest, often limited to accredited investors; avoiding general advertising unless the exemption allows it; giving investors accurate disclosure about the business and its risks; using proper subscription agreements; filing a Form D with the SEC and any required state notices; and not paying unlicensed people commissions for finding investors. Securities laws hold founders responsible for misleading statements, even informal ones. Working with counsel before you talk to investors is the safest path. Kennedy Sutherland LLP advises on private offerings.
What is a SAFE or convertible note, and when should a startup use one?
A SAFE, or Simple Agreement for Future Equity, gives an investor the right to receive shares later, usually when the company raises a priced equity round, often at a discount or subject to a valuation cap. A convertible note is a loan that converts into shares in a later round, but it also carries interest and a maturity date. Startups use these tools for early, smaller raises because they are faster and cheaper than a priced round and postpone setting a valuation. Founders should understand how caps, discounts and multiple SAFEs or notes will dilute their ownership. Both are securities, so securities law exemptions still apply. Kennedy Sutherland LLP helps startups with early financings.
How should co-founders split ownership and protect themselves?
Co-founders should agree in writing early. A common approach splits ownership based on each founder's expected contribution of time, money, ideas and skills, not just who had the idea. Vesting is important: founder shares typically vest over several years, so a founder who leaves early does not keep the full stake. Each founder should assign their business-related intellectual property to the company. A founders' or shareholder agreement should cover decision-making, transfer restrictions, buy-back rights, and what happens if a founder leaves, dies or the founders deadlock. Founders receiving restricted stock may want to file an 83(b) election within 30 days. Kennedy Sutherland LLP prepares founder documents.
What is a Texas series LLC and when does it make sense?
A Texas series LLC is a single LLC that can create separate series, each with its own assets, members, and business purpose. If the formation documents and records meet the Texas Business Organizations Code requirements, the debts of one series generally can be enforced only against that series' assets. Series LLCs are often used for real estate investors holding several properties or businesses with distinct lines. Texas also allows registered series, which are filed with the Secretary of State. Drawbacks include extra recordkeeping, uncertain treatment in some other states and by some lenders, and tax questions. A separate LLC for each venture is sometimes simpler. Kennedy Sutherland LLP has written about Texas series LLCs on its blog.
What legal steps should a new business take in its first year?
In its first year, a new Texas business should obtain an EIN, open a separate business bank account, and sign a company or shareholder agreement. It should register for Texas sales tax if it sells taxable items, get local permits and licenses, file an assumed name certificate if it operates under another name, and set up payroll and workers' compensation decisions if it hires. Starting May 15 of the year after it is formed, it must file an annual Texas franchise tax report, or, if its revenue is at or below the no-tax-due threshold ($2.65 million for 2026 reports), only a Public Information Report or Ownership Information Report. It should also keep minutes or written consents for major decisions. Using standard contracts for customers and vendors and buying the right insurance also helps. Under a FinCEN final rule effective August 14, 2026, companies formed in the United States no longer file beneficial ownership information reports; only certain foreign companies registered to do business in the U.S. still report.
Sources: FinCEN final rule (Aug. 14, 2026); FinCEN BOI FAQs; Texas Comptroller, 2026 franchise tax forms and no-tax-due threshold. Reviewed November 15, 2026.
Deals and contracts
Do I need a lawyer to buy a small business in Texas?
Texas law does not require a lawyer to buy a small business, but buying one without legal help is risky. A lawyer helps decide whether to buy assets or stock, reviews the seller's contracts, leases, permits, employees, debts and liens, drafts or negotiates the letter of intent and purchase agreement, and protects you with representations, warranties, indemnities, escrows, and non-compete terms. If a bank or SBA loan is involved, counsel coordinates closing documents with the lender. Problems hidden in a business, such as unpaid taxes, missing licenses or contract restrictions on transfer, often surface only through careful diligence. Kennedy Sutherland LLP represents buyers and sellers in business acquisitions.
How do I sell my business in the Texas Hill Country?
Selling a Hill Country business usually starts with getting ready: cleaning up financial statements, contracts, leases, permits and corporate records, and talking with your CPA about tax. Many owners work with a business broker or adviser to value the business and find buyers. Once a buyer is found, the parties sign a letter of intent, the buyer performs due diligence, and lawyers negotiate the purchase agreement, including the price, how it is paid, any seller financing or earn-out, and the seller's promises and protections. Real estate, wineries, short-term rentals and ranch businesses can add specific issues. Kennedy Sutherland LLP represents sellers across the Texas Hill Country, with Dub Sutherland based in Fredericksburg and Jason Shoup based in Boerne.
Asset sale or stock sale: which is better when selling a business?
In an asset sale, the buyer purchases selected assets, such as equipment, inventory, contracts and goodwill, and usually takes on only the liabilities it agrees to. Buyers often prefer this because it limits unknown liabilities and can create tax benefits from a higher basis in the assets. In a stock or membership interest sale, the buyer purchases the owner's equity and the company keeps all its assets, contracts and liabilities. Sellers often prefer this for simpler closing and, in many cases, capital gains treatment, especially for C corporations. Contract consents, licenses and tax treatment often decide the structure. Negotiation can bridge the gap with price adjustments. Talk with your lawyer and CPA early.
What is a letter of intent, and is it binding?
A letter of intent, or LOI, is a short document that sets out the main terms of a deal, such as price, structure, timing and key conditions, before the parties spend money on due diligence and a full purchase agreement. Most LOIs say that the business terms are not binding, so either party can still walk away. Certain provisions are usually binding, such as confidentiality, exclusivity or no-shop periods, who pays expenses, and governing law. Whether an LOI is binding depends on its exact wording and the parties' conduct, so careless drafting can create an unintended contract. Have a lawyer review the LOI before signing, because its terms shape the final deal.
What does due diligence include when buying a company?
Due diligence is the buyer's investigation of a business before closing. It usually covers financial statements and tax returns, debts and liens, customer and supplier contracts and whether they can be transferred, leases and real estate, permits and licenses, employees, benefits and contractor classifications, intellectual property, insurance, pending or threatened lawsuits, environmental issues, and corporate records showing who owns the company. The buyer's lawyer, accountant and sometimes industry consultants share the work, using a request list and an online data room. Findings can lead to price changes, special indemnities, conditions to closing, or walking away. Good diligence is the buyer's best protection. Kennedy Sutherland LLP handles diligence for buyers.
How long does it take to close the sale of a business?
Closing the sale of a small or mid-sized business often takes two to six months after a letter of intent is signed, though simple deals can move faster and complex ones slower. Timing depends on how organized the seller's records are, the scope of due diligence, whether bank or SBA financing is involved, third-party consents from landlords or key customers, licenses or regulatory approvals, and how long negotiations take. Sellers can speed things up by preparing records before going to market. Buyers can help by lining up financing early. A closing checklist with deadlines keeps everyone on track. Kennedy Sutherland LLP manages the closing process for buyers and sellers.
Which contracts should every small business have a lawyer review?
Every small business should have a lawyer review the contracts that carry the most risk or the longest commitment. These usually include commercial leases; customer agreements and terms of service; vendor and supply contracts; loan documents and personal guaranties; partnership, company or shareholder agreements; employment, contractor, non-compete and confidentiality agreements; franchise or distribution agreements; software and data agreements; and any contract to buy or sell a business or real estate. A one-time review to build solid templates for repeat contracts often pays for itself. Watch for automatic renewals, unlimited liability, personal guaranties and one-sided termination rights. Kennedy Sutherland LLP drafts and reviews business contracts and can set up standard templates. Fixed-fee packages available. Call 210.259.3885 for a quote.
How do I finance the purchase of a business with a bank loan?
Many buyers finance a business purchase with a bank term loan, an SBA 7(a) loan, seller financing, or a mix. SBA 7(a) loans are common for acquisitions because they allow longer terms and smaller down payments, but they come with program rules on equity, seller notes and personal guaranties. Lenders look at the business's cash flow, the buyer's experience and credit, collateral, and the purchase agreement. Seller notes may need to be subordinated to the bank, and the purchase agreement should line up with the loan's closing conditions. Start talking with lenders early and share the letter of intent. Kennedy Sutherland LLP works with both business buyers and community banks on acquisition loans.
Hill Country and local
Does a Texas business and bank law firm serve the Hill Country locally?
Yes. Kennedy Sutherland LLP's managing partner, Dub Sutherland, is based in Fredericksburg, and the firm's San Antonio and Austin offices support Hill Country clients. Jason Shoup is based in Boerne and works with the firm's Boerne clients. The firm has represented community banks and privately held businesses since 1983, including outside general counsel work, business formation, mergers and acquisitions, contracts, real estate, tax, and bank corporate, compliance and loan documentation work. KS serves Gillespie, Kerr, Kendall, Mason and Blanco counties and clients across Texas. Call 210.259.3885 to talk with the team.
How do I find a business attorney in Fredericksburg, TX?
When looking for a business attorney in Fredericksburg, look for someone who handles business transactions, not just litigation or estates, and who understands local industries such as wineries, tourism, real estate and family-owned companies. Kennedy Sutherland LLP serves Fredericksburg and Gillespie County businesses. Managing partner Dub Sutherland is based in Fredericksburg and represents private companies, financial institutions, lenders and investment funds on formation, acquisitions and sales, financing, securities offerings, commercial contracts, and corporate governance. The full KS team supports his clients. Ask any attorney about experience with businesses like yours and how fees work. Fixed-fee packages available. Call 210.259.3885 for a quote.
How do I find a business lawyer in Kerrville, TX?
Kerrville businesses can choose among local general practice firms and regional business firms. If your needs are mainly business transactions, such as contracts, formation, buying or selling a company, financing or outside general counsel, look for a firm that does that work every day. Kennedy Sutherland LLP serves Kerrville and Kerr County businesses and banks, with Dub Sutherland based nearby in Fredericksburg and the full KS team behind him. The firm has represented privately held businesses and community banks since 1983. Ask any lawyer about their experience with businesses like yours, who will do the work, and how fees are set. Fixed-fee packages available. Call 210.259.3885 for a quote.
How do I find a business lawyer in Boerne, TX?
Boerne has a fast-growing business community, and business owners there need counsel who handles transactions, contracts and growth questions. Kennedy Sutherland LLP serves Boerne and Kendall County, with associate Jason Shoup, who is based in Boerne and works with the firm's Boerne clients. Jason works on acquisitions and sales, private placements of debt and equity, financing transactions, SEC compliance, private equity investments, employee compensation plans and corporate governance. The full KS team supports Boerne clients for outside general counsel work, formation, deals, real estate and bank matters. Ask any lawyer about experience, who will do the work, and pricing. Fixed-fee packages available. Call 210.259.3885 for a quote.
Is there a business lawyer who serves Mason County?
Yes. Kennedy Sutherland LLP serves businesses and community banks in Mason and Mason County as part of its Texas Hill Country practice. Dub Sutherland is based in Fredericksburg, and the full KS team supports clients by phone, video and in person. Common needs in Mason County include ranch and agricultural businesses, land purchases and sales, family business succession, entity formation, contracts, and loans secured by rural real estate or livestock. Many of these questions also involve Texas homestead rules, mineral and water rights, and estate planning, so KS coordinates with clients' CPAs and estate lawyers. Call 210.259.3885 to talk about your business.
Is there a business lawyer who serves Johnson City and Blanco County?
Yes. Kennedy Sutherland LLP serves Johnson City and Blanco County businesses and banks as part of its Texas Hill Country practice. Dub Sutherland is based in nearby Fredericksburg, and the full KS team supports clients by phone, video and in person. Common needs include forming and organizing small businesses, contracts and leases, buying or selling a business, real estate and land deals, tourism and hospitality businesses, and bank lending and compliance work for community banks. Ask any lawyer you consider about experience with similar businesses and how fees are set. Fixed-fee packages available. Call 210.259.3885 for a quote.
Can a Hill Country law firm handle work anywhere in Texas?
Yes. Texas lawyers can represent clients anywhere in the state, and business and bank work is largely done through documents, calls and video meetings rather than local courthouses. Kennedy Sutherland LLP is a Texas business and community bank law firm with offices in San Antonio and Austin. Managing partner Dub Sutherland is based in Fredericksburg and leads the firm's Hill Country practice, Jason Shoup is based in Boerne and works with the firm's Boerne clients, and the firm serves clients across Texas. For real estate, the firm coordinates with title companies in the county where the property sits, and for matters outside Texas it can work with local counsel. Call 210.259.3885 to discuss your project.
Working with KS and fees
Does Kennedy Sutherland offer fixed-fee legal services?
Yes. Kennedy Sutherland LLP offers fixed-fee packages for common work, such as entity formation, outside general counsel arrangements, contract packages, and commercial loan documentation for community banks. A fixed fee gives you a set price for a defined scope, so you know the cost before work begins. Each package lists what is included, what is not, and the assumptions that keep the price fixed, such as the number of owners or documents. Work outside the package, such as negotiations with another party's lawyer or added documents, is quoted separately or billed hourly. Larger projects can often be scoped at a flat project fee. Fixed-fee packages available. Call 210.259.3885 for a quote.
How do I schedule a consultation with Kennedy Sutherland LLP?
To schedule a consultation with Kennedy Sutherland LLP, call 210.259.3885, email info@kslawllp.com, or use the contact form at kslawllp.com. Briefly describe your business or bank, the project or question, and any deadlines. If documents are involved, such as a contract, term sheet or loan approval, mention them so the team can prepare. The firm will confirm whether it can help, check for conflicts of interest, and explain the next steps and fee options. Initial consultations are free. Sending information through the website or email does not create a lawyer-client relationship until the firm confirms an engagement in writing, so avoid sending confidential details until then.
Can I meet with a Kennedy Sutherland lawyer in person in the Hill Country?
Kennedy Sutherland LLP's managing partner, Dub Sutherland, is based in Fredericksburg, and Jason Shoup is based in Boerne and works with the firm's Boerne clients, so in-person meetings in the Hill Country are possible for many projects. The firm also meets clients by phone and video, which many business owners and bankers prefer for routine work. For closings, board meetings or sensitive discussions, the team can arrange a meeting at the client's office or another convenient place. Let the firm know your preference when you call 210.259.3885.
Who at Kennedy Sutherland will actually do my work?
At Kennedy Sutherland LLP, each client has a lead lawyer who stays responsible for the work, supported by other KS attorneys and staff with the right skills for each task. For Hill Country business and bank clients, the lead is usually Dub Sutherland, managing partner, or Jason Shoup, who is based in Boerne and works with the firm's Boerne clients. The broader team includes founding partner Patrick J. Kennedy Jr. on bank corporate, regulatory and Subchapter S work, along with partners and associates who handle commercial lending, compliance, securities, tax, real estate, formation, transactions and lending documents. The engagement letter names the lead lawyer and the team. Bios are on the Our Team page at kslawllp.com.
What kinds of clients does Kennedy Sutherland represent?
Kennedy Sutherland LLP represents community banks, bank holding companies and their directors, officers and shareholders, and privately held businesses at every stage, from start-ups and entrepreneurs to established companies. The firm also works with non-bank lenders, investment funds, real estate investors and developers, and nonprofit organizations, including tax credit and community development finance projects. Its work covers mergers and acquisitions, corporate and securities, taxation, real estate, banking and financial institutions, and tax credit finance. The firm was founded in 1983, has offices in San Antonio and Austin, and serves clients across Texas. Managing partner Dub Sutherland is based in Fredericksburg and leads the firm's Hill Country practice.
How quickly does Kennedy Sutherland respond to client requests?
Response time depends on the request and its urgency, but clients should expect prompt acknowledgment and a clear timeline for the answer. Kennedy Sutherland LLP's outside general counsel package terms include a set response-time commitment, stated in the engagement. Tell us your deadline when you send the request, and the lead lawyer will give you a timeline. The best way to get a timely answer is to send the question, the relevant documents and the deadline together. Each client has a lead lawyer who coordinates the team. Call 210.259.3885 to discuss what timing your business or bank needs.
These answers are general information, not legal advice. The right steps depend on your facts. Questions about your business or bank? Call 210.259.3885.
Talk with Kennedy Sutherland LLP
Initial consultations are free. Fixed-fee packages available. Call for a quote. Tell us about your business or bank and what you need.