Written By: Brandy Miller | March 2, 2017 | No Comments
Choosing the Right Business Structure is Crucial
If you are creating a new business, one of the first decisions you will have to make is the business entity or formation you wish your company to take. In Pennsylvania, there are several options, including:
Sole Proprietorship.
In a sole proprietorship,
- you
- are the only business owner;
- get to keep all of the profits related to your business;
- are also fully liable in the event of a lawsuit; and
- most noteworth, legal claims can target your personal assets.
Corporation
A corporation
- separates company assets from shareholder assets;
- allows one or more shareholders to be owners of the business;
- requires filing
- Articles of Incorporation with the Pennsylvania Corporation Bureau, and
- forms with the Pennsylvania Department of Revenue and the IRS.
Corporations are taxed differently than other business.
Partnerships
- Involve ownership and agreement between two or more partners;
- Partners may be separate entities or individuals;
- There are two partnership options:
- A general partnership must register its business name if it has one, but no formal filing is required to form this business entity. Each partner does have personal liability for claims against the business.
- A limited partnership includes at least one general partner and one limited partner. In many cases, the general partner is a limited liability company or corporation. As a result, the limited partnership is a limited liability company, meaning any limited partners do not have personal liability in the event of lawsuits or claims against the business. This protection does not extend to the general partner or partners.
Limited Liability Company (LLC)
This business entity protects all its owners from having their assets targeted in legal claims. To establish an LLC, owners must file a Certificate of Organization with the Pennsylvania Corporation Bureau.
Which Entity Is Right for You?
- No one entity provides absolute protection against liability. However, some will protect your assets more than others.
- Also, each business entity has specific tax advantages or disadvantages.
- It is essential to understand how each business entity could impact your future finances, legal claims, and taxes. Primarily, this will depend on your industry, the type of company you are opening and the likely challenges you may encounter as a business owner.
The best way to choose the right structure for your business is to consult with our Business Startup Attorneys. Our Business Attorneys have
- represented companies of all types in Berks County around Reading, PA;
- worked with large corporations to small sole proprietorship’s;
- a full breadth of legal expertise that can help you understand the advantages and disadvantages of each business entity; and
- knowledge in all areas of Business Law to help you draft Contracts or file the appropriate paperwork.
Contact Us Online or Call Us at 610-670-9000 today.
Miller Law Group’s Berks County Law Offices are in West Lawn near Reading and Wyomissing, PA.
We offer
- Convenient, Easy and Safe Free Parking;
- Easy Access Ramp; and
- Spacious, Well-Lit Offices