215-482-0285
Philadelphia Business Lawyer Sarah E. Holmes
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215-482-0285

Looking to form a Business Corporation ​in Pennsylvania?

Call our top-rated business lawyers at
​
 215-482-0285 ​or ​​​Book a Call Now

Forming a Corporation for a Business


​Sometimes a new business will decide that the best legal entity to form based on its goals is to form a corporation. There are some pros and cons to using a corporation as a business entity.

Pros:
  • easy to distribute stock to many shareholders;
  • different classes of stock with different voting rights are possible;
  • many investors will prefer a corporate entity

Cons:
  • corporate formalities MUST be observed;
  • meetings must be held and minutes recorded;
  • a board and officers must be appointed;
  • many states have annual filing fees and compliance deadlines;
  • administrative burdens of upkeep.

​But what about an "s" corp? There is no entity that is a "s corp!" "S" refers to subchapter s of the IRS code and is a tax designation. The actual business entity can be a corporation or an LLC that elects to be taxed under subchapter s.  For a number of business owners, the s election may save money on federal taxes. However, the s election comes with several requirements and restrictions and the s election must be done properly and timely.

A corporation should also have bylaws and a shareholders' agreement in place. The bylaws will set forth many legal formalities for the corporation and the shareholders' agreement will set forth the different rights and duties of the shareholders.  One is wise to have these documents drafted by a business attorney.

Should your accountant form your corporation? Many accountants will offer to form a corporation or other entity. This is okay, except we've found that in many cases, they form the entity and stop there. Why is that problematic? Because no one has properly issued or logged the stock certificates, the business owner doesn't understand how to keep meeting minutes, and most disturbingly, no bylaws and no shareholder agreements are drafted.  We can't stress this enough with clients that have or want to form a corporation:  these formalities are NOT OPTIONAL when it comes to a corporation. You MUST have them in place to retain the liability protection of the entity.  Failing to have the proper formalities can expose the shareholders, officers and directors to personal liability. 

If you'd like the help of one of our Pennsylvania or New Jersey business lawyers in forming a corporation, drafting meeting minutes, corporate compliance and filings, or a shareholders' agreement, please reach out to our center city or main line business law office.
Call​ our corporate lawyers
​at
 ​215-482-0285 ​or ​​​Book a Call Now

We'll help you form your corporation.
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Holmes Business Law, P.C.

​1515 Market Street, Suite 1200,
Philadelphia, PA 19102

___________________________
40 E. Montgomery Avenue
4th Floor, Ardmore, PA 19003
​
​© 2022 by Holmes Business Law P.C.
All rights reserved.
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​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 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
    • Succession Planning
    • Commercial Lease
    • The Right Start Program
  • About
    • Speaking and Events
    • Webinars
    • Client Testimonials
    • Privacy Policy/Terms of Use
    • Contact
  • Business Success Tips
  • Flat Fee Packages
    • New Businesses
    • Existing Businesses
    • Dispute Resolution
    • Trademarks & Copyright
    • Succession Planning
  • Reviews