The entity structure and governing documents a business adopts at formation shape everything that follows: how disputes between owners are resolved, how profits are allocated, and how the business can raise capital or bring on new partners. We help Philadelphia-area business owners set up LLCs, partnerships, and corporations with documents built to prevent the disputes we see so often in our litigation practice.
Lead attorney on every case we take, backed by a dedicated legal team you work with directly.
Because we also litigate business disputes, we draft formation documents with an eye toward the disagreements that actually happen (vague profit-split language, no buy-sell provision, no clear process for admitting a new partner) rather than a generic template that looks complete but leaves the real gaps unaddressed.
The liability protection an LLC or corporation offers isn't automatic. It depends on genuinely treating the entity as separate from its owners: maintaining its own bank accounts, following the formalities set out in its governing documents, and avoiding commingling business and personal funds. Courts can disregard the entity structure and hold owners personally liable, commonly called piercing the corporate veil, where those formalities are ignored, which is why ongoing governance discipline matters as much as the initial formation documents themselves.
Business Formation
The formation of a business can affect all future endeavors and strategic choices of the business. Business formation will even affect all legal and financial aspects of your company. No matter the type, Freundlich & Littman, LLC can help you decide the best option for your business.
Even if the business is a sole proprietorship with a singular employee a designation at the end of the business could be crucial. It could mean that customers place more trust in your business. For example, Amazing Houses, LLC appears more legitimate than, “Amazing Houses”. We can help you sort through all the advantages and disadvantages to make the right decision for your business.
Business Formation Options
Business formation rhetoric often confuses new business owners. There are several options available to a business in the states of Pennsylvania and New Jersey. The differences, benefits, and disadvantages to each business designation can be hard to navigate.
We can help determine which business formation designation is better for you whether it be:
LLC (Limited Liability Company)
LLP (Limited Liability Partnership)
Partnership (Limited and General)
PC (Professional Corporations)
S-Corporation
Non-Profit
Sole Proprietorship
Sole proprietorships are cheaper to form. LLCs require yearly fees. Corporations have more stringent filing requirements. LLCs gives a business the freedom to design their business. A corporation must have a certain number of board members. They must also file minutes and reports. Members of a corporation have responsibilities to shareholders. We at Freundlich & Littman understand the confusion and are here to help.
PA Registration Law
The Pennsylvania Department of States has this to say about forming businesses in Pennsylvania:
“In general terms, any conduct more regular, systematic, or extensive than that described above constitutes doing business and requires the foreign association to register to do business. Typical conduct requiring registration includes maintaining an office to conduct local intrastate business, selling personal property not in interstate commerce, entering into contracts relating to the local business or sales, and owning or using real estate for general purposes. But the passive owning of real estate for investment purposes does not constitute doing business”
Like foreign companies need to register if they are “doing business” within the state. They are not permitted to operate unless the registration is complete. There is a whole list of exceptions for the “doing business” requirement.
According to State, “Being an interest holder or governor of a foreign association that does business in this Commonwealth does not by itself constitute doing business in this Commonwealth.” Keep this in mind if you are a foreign business looking to operate in Pennsylvania.
No matter the business type you will need to file all the proper documents with the Pennsylvania Department of State. Forms for every charity and business can be found at http://www.dos.pa.gov/BusinessCharities/Business/RegistrationForms/Pages/default.aspx
There are problems that arise with each type of business formation. When someone sues a corporation for instance, it is possible that the owner’s personal assets could be at stake. Likewise, certain types of formations can protect the personal assets of shareholders. For instance, LLCs protect an individual’s assets.
Before making any business decision, it is highly important to make sure you have everything you need. In Pennsylvania, a business must have the proper forms to fully register with the state. These are legal documents; therefore, any mistake in the formation of your business could be costly.
