Philadelphia Business Lawyer Sarah E. Holmes
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Business Entities

Types of Business Entities - How to Choose a Business Entity

Business entities and where to base one are some of the most common questions early stage or growing businesses ask.
Many new business owners have read information online that suggest setting up a Limited Liability Company (LLC) in such far-flung places as Nevada, Wyoming and sometimes closer to home, in Delaware.  However, when pressed, most people can't articulate a clear reason WHY someone would want to set up a business entity so far from home.  Why not set up a business on Mars?

The fact is, most people have about 20% of the correct information on where to base a business. If the business owners or partners are in Pennsylvania or New Jersey and actually running the business in one of these states, a thorough discussion needs to be held about the yearly filing fees, requirements and potential inconvenience of having a far-flung business entity.

What business entities are available in Pennsylvania?  The most common business entities are as follows:

Limited Liability Company (LLC)

Corporation (c-corp)

Limited Partnership

Benefits Corp (B-corp)

Why haven't we listed s-corporation (s-corp)?  Because there is no legal entity called s-corp.  The "s" refers to subchapter s of the IRS code and is a tax designation. The underlying entity would be either a corporation or an LLC.  This is one of the biggest legal misconceptions our office deals with.

A word about using an online formation service: several prospects have come to us recently after having visited online formation services, some of whom advertise the formation at "no cost," just the state filing fee.  Reading of the fine print will usually disclose some kind of hidden cost, such as an annual registered agent fee, charges for applying for a free EIN, or charges for an Operating Agreement. Rarely is anything in life truly "free."

If you'd like our help in selecting a proper entity and where to form it, please reach out to our office.
Holmes Business Law, P.C.
​Two Convenient Locations- Main Line and Center City
40 E. Montgomery Avenue (all mail)
4th Floor
Ardmore, PA 19003
and
1515 Market Street
Suite 1200
Philadelphia, PA 19102
215-482-0285
 

info@phillysmallbusinesslawyer.com

All site content is subject to copyright 2021 by Holmes Business Law P.C.
This website and its content herein constitutes attorney advertising.  Any content on this website should be construed as informational, not legal advice.  No information on this website is intended to create an attorney-client relationship.  Only a signed fee agreement between Sarah E. Holmes and the client will establish an attorney-client relationship.  Use of any information on this site is provided "AS IS" with no warranty of any kind, either express or implied.  Always consult with a licensed attorney in your own state for legal advice.
  • Home
  • Attorneys & Areas of Law
    • Business Entities >
      • Corporations
      • Limited Liability Company (LLC)
    • Business Immigration
    • Business Purchase or Sale
    • Raising Capital & Investor Agreements >
      • Promissory Notes and Debt Financing
      • Private Placement and Equity Financing
    • Business Contracts >
      • Consulting Agreement
      • Employment Contracts
      • Independent Contractor (1099) Agreements
      • Website Terms and Privacy Policies
    • Copyright & Trademark
    • Hiring Employees/NDA/Non Compete
    • Estate Planning & Wills
    • Commercial Real Estate >
      • Commercial Lease
    • The Right Start Program
  • About
    • Speaking and Events
    • Client Testimonials
    • Privacy Policy/Terms of Use
    • Contact
  • Business Success Tips
  • Flat Fee Packages
    • New Businesses
    • Existing Businesses
    • Dispute Resolution
    • Trademarks & Copyright
    • Estate Planning
  • COVID-19 HELP