starting a limited liability corporation by bmark1

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									Starting a New Business in Pennsylvania
The first step in starting a new business is to choose the business structure that is right for
you. Your choices are:

      Sole Proprietorship
      Corporation
      General Partnership
      Limited Partnership
      Limited Liability Partnership
      Limited Liability Company


A brief explanation of each and how they are organized:

Sole Proprietorship:
One person is the owner with a sole proprietorship. Most small businesses operate as a
sole proprietorship. The sole proprietor is solely liable for all the debts of the business.

A sole proprietorship may operate using a fictitious name, but the business does not have
a separate legal existence apart from its owner under state law. To use a fictitious name,
the name MUST be registered with the Pennsylvania Department of State.

A sole proprietorship is not required to file organization papers with the DOS, but they
MUST file to use a fictitious name.

Corporation (Inc.):
A corporation is a legal entity with all rights, privileges and responsibilities of a person.
The corporation, NOT the owners, is solely liable for all of the debts of the business.
There are both corporations for profit and non-profits. A corporation that is for profit is
running for the purpose of making money for its shareholders.

A corporation must file Articles of Incorporation with the Corporations Bureau,
Department of State. This application must be submitted with a docketing statement.

Publication of the filing of the Articles must be made in two newspapers of general
circulation, and one legal publication. The information that must be included in the
advertisement is set forth in 15 Pa. CS § 1307. The ad must contain the name of the
proposed corporation and a statement that the corporation is to be or had been organized
under the provisions of the Business Corporation Law of 1988, 15 Pa. CS § 1101 et seq.
and 15 Pa. CS §4101 et seq. The DOS does not require publication proof to be sent to
them, but it should be kept with the minutes and formation documents for the
corporation.

General Partnership:
A partnership is very similar to a sole proprietorship, except that two or more people are
involved. The parties carry on as co-owners of the business. In a business partnership,
the parties that join forces can be individuals, corporations, trusts, other partnerships, or a
combination of any. Each partner is responsible for all debts of the business. Any act by
any partner binds the business, unless that person had no authority and the third party
knew that person had no authority.

A general partnership is formed by an agreement entered into by each partner. A general
partnership is not required to file organization papers with the PA DOS. However, if
using a fictitious name, that form must be filed.

Limited Partnership (LP):
A limited partnership is a partnership formed by at least two persons. The partnership
must have at least one general partner and at least one limited partner. The general
partner assumes the personal liability for the debts and obligations of the partnership.
The limited partners do not have any personal liability beyond the capital contributions
they make to the partnership. However, when a limited partner participates in control of
the business, that limited partner is liable to persons who believe, based on the conduct of
the limited partner, that the limited partner is a general partner.

A Pennsylvania limited partnership is formed by filing a Certificate of Limited
Partnership on form DSCB:15-8511 with the Corporation Bureau, Department of
State.

Limited Liability Partnership (LLP):
A Limited Liability Partnership is a partnership that provides liability protection for all
limited partners. There must be at least one limited partner and at least one general
partner. Registering as a limited liability partnership is available for either general
partnerships or limited partnerships.

A Limited Liability Partnership must elect to file as either Limited or General. However,
an enterprise may only elect to file as Limited if it had previously registered with the
Pennsylvania Department of State as a Limited Partnership by filing a Certificate of
Limited Partnership. A Limited Liability Partnership (LLP) is formed by filing a
Statement of Registration on form DSCB: 15-8201A with the Corporation Bureau,
Department of State.

Limited Liability Company (LLC):
The limited liability company (LLC) is an association of one or more persons which
provides the liability protection of a corporation, with many of the tax advantages of a
partnership or a sole proprietorship. A person forming an LLC is referred to as an
organizer and a person admitted to an LLC is called a member.

A Limited Liability Company is formed by filing a Certificate of Organization with the
Corporation Bureau, Department of State, on form DSCB: 15-8913, accompanied by a
Docketing Statement, form DSCB:15-134A.
The next step is to develop a business plan.
A business plan identifies your goals and serves as your firm’s resume. It describes the
products and services you will sell, the customers to whom you sell them, production,
mgt. and marketing strategies, projected profit and/or loss that will result from your
efforts. The plan should provide answers to who you are, what you are going to do,
where you are going and how you are going to get there.

Completing a business plan forces you to examine all decisions of management,
marketing, personnel, and finance issues in an objective and organized way.

Free sample business plan samples can be viewed at :
http://www.bulletproofbizplans.com/bpsample/Sample_Plan/sample_plan.html

Make sure you have the right materials if you incorporated:
If you incorporated you will need a corporate seal, a minute book, and stock certificates.
These types of packages are available from many companies on the web.

Decide if you need an EIN and apply for it.
Form SS-4 is the Federal application for an Employer Identification Number, this is a
number that serves almost as a social security number for your company. The application
can be done online, via fax, or mail. The form is available on the IRS website
www.irs.gov.

								
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