A corporation is considered to be a legal person separate from its owners. Corporations are usually formed for tax purposes and for protection against personal liability. A corporation does not pay taxes; rather it files corporate returns and pays taxes based upon its profits and losses.
When forming a corporation, one must decide what form of organization is best suited for his/her needs. There are three basic types of corporations: general partnerships, limited partnerships, and limited liability companies.
The most common type of corporation is a limited liability company. This type of corporation offers many benefits over the other two forms of incorporation. For example, a limited liability company allows members to operate the company without being personally liable for the debts and obligations of the company.
Limited liability companies are often used for holding real estate assets, such as commercial properties, shopping centers, apartment complexes, etc. They are also frequently used for operating businesses where the owner wants to keep his/her personal finances out of business.
If you are considering incorporating your business, you should consult with an attorney experienced in the area of business law.
Table of Contents
Registering an LLC
Registering an LLC in Pennsylvania requires filing an Application for Registration of Business Entities with the Department of State, according to the state agency’s website. This process includes filling out a form, paying $60, and submitting it. You can do this online, over the phone, or in person.
The application consists of three parts. Part one is for individuals. Part two is for businesses. Part three is for corporations.
Part 1 – Individuals
You must provide information about yourself including name, address, date of birth, Social Security number, driver’s license number, etc.
Part 2 – Businesses
If you are registering a sole proprietorship, partnership, corporation, limited liability company, or nonprofit organization, you must fill out part two of the application. Here you must provide information about the business including name, address, type of entity, principal/principal officers, contact information, and how many employees there are. You must also list any prior names used by the business.
The Process of Getting an Employer Identification Number (EIN) in PA
Obtaining an Employer Identification Number is one way to open up a checking account for your limited liability corporation (LLC). An EIN is required before you can open a bank account for your business. If you are self-employed, you must obtain an EIN before filing your taxes. In addition, you need to obtain an EIN if you want to buy life insurance for your business.
The IRS requires every person who files a federal income tax return to file Form SS-4. This form allows you to establish an employer identification number (EIN), which is used to identify your business entity. Once you have established an EIN, it becomes necessary to file Form SS-5 with the Social Security Administration.
You do not need to obtain an EID if you are a sole proprietorship or partnership. However, if you are incorporated, you will need to obtain an EIC.
If you are self-employed and plan to use an individual retirement account (IRA) to fund your retirement, you must obtain an Individual Retirement Account (IRAs) Taxpayer Identification Number (TIN).
An EIN is different from a TIN. A TIN is assigned by the Internal Revenue Service (IRS) to individuals who file a Federal Income Tax Return. An EIN is assigned by the IRS to businesses.
To obtain an EIN, you must complete Form SS-4, Application For Employer Identification Number, and submit it to the IRS. There are three ways to obtain an EIN: online, over the phone, or via mail.
An Operating Agreement is one of the most important documents for a startup because it lays out how ownership of the company works. In addition, it defines the responsibilities of each member of the LLC. If you are looking to start a small business, you’ll probably find yourself needing help writing an operating agreement. You might even need legal assistance. Here are some tips to keep in mind while drafting your LLC operating agreement.
1. Choose Your Entity Type
There are three main types of entities that you can choose from: Sole Proprietorship, General Partnership and Limited Liability Company (LLC). Each of these options has pros and cons, and you must decide which option best fits your needs.
The operating agreement determines who owns what percentage of your company. For example, if you are forming a general partnership, you will determine who owns what percentage of equity in the company. This information can vary depending on whether you are creating a partnership for profit or loss sharing.
3. Define Responsibilities
You’ll need to define the roles of each partner in your company. These include things like managing money, making decisions about the direction of the company, hiring employees, etc.
Announce your LLC
Publication of an LLC public notice in Arizona, Nebraska, or New Jersey requires posting the notice in a newspaper. You must post the notice online in addition to publishing it in a paper. In most states, you must submit an Apply copy of the published public notice to the Secretary of States’ office within 10 days of filing.
Apply Online for a new bank account in PA
If you are starting a business, it is important to open a business checking account. This allows you to receive payments from customers and vendors, pay bills, track expenses, and manage payroll. However, there are several things to consider when choosing a banking institution.
The first thing to do is determine whether you want to use a traditional bank or a credit union. Traditional banks offer many services, such as ATM access, check cashing, bill payment, and loan options. Credit unions provide similar services but usually charge lower fees. Some people prefer to avoid banks because they feel too big and impersonal. Others dislike dealing with large institutions.
Next, decide what type of account you want to open. A business checking account is typically used to deposit cash, make checks payable to others, write checks for invoices, pay bills, and transfer funds between different accounts. You can choose between a standard checking account and a business checking account. Standard checking accounts allow you to write up to $10,000 monthly checks. Business checking accounts allow you to exceed that limit, but you must maintain sufficient balances in each account. If you don’t meet the requirements, your account could be closed.
You also have the option to open a business savings account. These types of accounts are designed to help you save money for future purchases. They often require a minimum balance, and some impose monthly maintenance fees. To qualify for a business savings account, you must set aside a certain amount of money each month. For example, if you have a $1,500 annual income and plan to spend $2,000 next year, you’ll need to put away $300 every month.
Finally, select an appropriate bank. Consider the following factors when selecting a bank: location, hours of operation, branch size, customer service, online capabilities, and fee structures.
Apply for business licenses and permits in Pennsylvania
Ensure all licenses and permits required for starting a business are current before filing your Articles of Organization or Operating Under an Assumed Name. You may want to check with your state to see if you will need to obtain Seller Permits if you plan to sell products online.
If you file articles of incorporation, you must attach copies of all licenses and permits necessary for conducting business in your state. If you file an assumed name certificate, you must attach copies showing that the assumed name is registered with the Secretary of State.
Frequently Asked Questions
Where should I form my LLC?
If you plan on forming a limited liability corporation (LLC), it makes sense to do so in the state where you live. If you are looking to incorporate a business in multiple states, there are pros and cons to each one. In addition to using different laws depending on the type of business entity you choose, some states offer tax incentives for incorporating businesses.
Do I need a new EIN for my LLC?
Suppose you already have an Employer Identification Number (EIN) for your sole proprietorship. In that case, you won’t need to file an IRS Form SS-4 to convert it into an Employer Identification Number for your newly formed limited liability company (LLC). However, if you want to continue to use your existing EIN, you must obtain a new one. This is because you no longer operate under the same legal entity as your sole proprietorship.
You don’t need anything special to get a new EID number; you just need to fill out IRS form SS-4. We’ve included instructions for filling out the form here. Once you’re done, send it off to the IRS.
James Rourke is a business and legal writer. He has written extensively on subjects such as contract law, company law, and intellectual property. His work has been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf.
