When you are starting a business, investing in real estate ventures, or engaging in other commercial activity in Pennsylvania, it is a good idea to consider forming a limited liability company (“LLC”).
“LLC is the way to go, and the most common business [structure] that’s currently formed,” says Jacob Cohen , owner of Jacob Cohen & Company, CPAs, a Philadelphia-based certified public accountant firm serving individuals and business owners. “It’s flexible, and you can elect for it to be taxed as a partnership.”
An LLC is a hybrid between a corporation and a partnership. As such, an LLC provides the liability protection of a corporation, with the advantage of being taxed as a partnership. Generally, this means that a Pennsylvania LLC shields you from personal liability arising from your business activities. At the same time, it provides you with “pass-through” tax treatment on the profits and losses from your business. Basically, you’ll avoid being taxed twice, as a business and as an individual. You can incorporate your LLC yourself, hire a lawyer to guide you through the process, or use an online service like LegalZoom to register your business quickly.
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LegalZoom helps you set up an LLC in your state quickly, easily, and entirely online. An LLC is needed for important business functions, such as opening a business bank account. Different states have different business formation requirements; LegalZoom customizes the process for you based on what state you live in, and the company helped consumers form 447,000 businesses in 2021, according to a press release .
Mistakes can be made when trying to form an LLC by yourself, and business formation professionals can be expensive. If you want a cost-effective and convenient way to create your LLC (and keep more of the money you make from your side hustle or business when tax time rolls around), LegalZoom is a great option.
We interviewed Pennsylvania-based experts on their experience with registering for an LLC in the Keystone State. These are the steps involved in setting up your LLC in Pennsylvania, as outlined below. Step 1: Choose a Company Name
Pennsylvania requires that every LLC operating in the state have a unique name. You can conduct a search at the Pennsylvania Department of State website to see if your proposed name is available. The name of your LLC must contain the words “Company,” “Limited,” or “Limited Liability Company”, or either the abbreviation “L.L.C.” or “LLC”.
There are certain restrictions to choosing a company name. It cannot reference a governmental agency , such as the FBI, the State Department, or the United States Treasury. It also cannot indicate a fiduciary relationship if one doesn’t exist (trust, trustee, fiduciary). It also cannot include a non-associated financial institution or professional services firm, such as a bank, law firm, or medical practice.
Licensed professionals in Pennsylvania, such as doctors, lawyers and therapists, have different company formation requirements. They must form what is called a “restricted professional company.” You can check to see if your industry is considered to provide restricted professional services by reviewing the Pennsylvania Statement of Policy .
If your proposed name is available, you may reserve it for up to 120 days for a fee of $70 by filing a Name Reservation request form online or mailing in the form.
In choosing your LLC name, you will want to consider the following: Are you planning to trademark the business name tied to your product or service offering? If so, you should check first to see whether the trademark is available. Trademarks can be searched at the United States Patent and Trademark Office website .
Do you need the website name to be the same as the company name? If so, is this domain available?
Are you planning to market or sell on social media platforms? If so, do you need the social media handle to match the company name?
The legal name of your LLC does not have to be the same as the name you use to operate your business, as you can use a “doing business as” (DBA) name or trade name. For this reason, it is important to conduct a trademark search for your DBA or trade name to ensure that no one else has already obtained a trademark for your proposed trade name. If you choose to operate under a DBA or trade name, you still need to follow the same LLC naming conventions for your Pennsylvania LLC and also register your fictitious name (DBA) with the Pennsylvania Department of […]
source How to Start an LLC in Pennsylvania: 7 Steps to Making Your Small Business Official
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