Business Formation Attorney in Upper Darby, Pennsylvania
Business formation is a complex and lengthy process that requires plenty of planning and a thorough understanding of state and federal laws and procedures. The first step of establishing a business is choosing the business structure. This decision alone can affect all aspects of your business, including day-to-day operations, taxes, and whether your personal assets are at risk, among other things.
That is why you must consult with a business formation attorney in Upper Darby, Pennsylvania, to make sure that all of your business affairs are in order. The business law attorney at Sabir Law Group has the expertise and resources you need to help you plan out your business, choose the correct business structure, draft the necessary contracts, and assist you with other aspects of business formation. Attorney Sabir assists clients also throughout the greater Philadelphia area.
Choosing a Business Structure
When forming a business, the first decision you need to make is what form of business entity you will establish. Here is the breakdown of the four different business structures to help you choose the right one for your needs and circumstances:
Sole Proprietorship. The sole proprietorship is the least complicated and expensive type of business structure. As its name implies, sole proprietorship involves only one owner. This business structure gives you complete control of your business. A downside of this business structure is that your business assets and liabilities are not separate from your personal assets and liabilities. It means that creditors can go after your personal assets to satisfy business debts.
Partnership. To form a partnership, two or more partners have to draft a partnership agreement to specify how the business will operate and the distribution of profits among partners. There are two kinds of partnerships: limited partnerships (LPs) and limited liability partnerships (LLPs). In an LP, only one partner has unlimited liability while others have limited liability. In an LLP, every partner has limited liability.
Limited Liability Company (LLC). An LLC combines the benefits of two business structures: sole proprietorship and partnership. In most instances, the personal assets of LLC members are protected from liability for business debts and claims. However, LLCs have a limited life in many states.
Corporation. There are various types of corporations to choose from; each has its advantages and disadvantages. Corporations are owned by shareholders. While a corporation provides personal liability protection like an LLC, it is more difficult to establish and maintain than an LLC.
Each form of business entity has its pros and cons, which is why you might want to consult with a business formation attorney to help you choose the correct business structure for your needs, goals, and plans.
Establishing the Necessary Contracts
One of the most crucial steps in business formation is the establishment of contracts. Business contracts play a pivotal role in how your company will operate. Contracts help outline the rights and obligations of all the parties involved. Essentially, business contracts are the soul and heart of any company. Some of the most common contracts that a business may need include:
Property and equipment lease contract
There are many requirements for creating a valid contract. You need to speak with legal counsel to ensure that your business contracts contain the necessary elements and meet other requirements established by federal and state law.
Essential Steps in Business Formation
The business formation process is not complete once you have chosen a business structure and established the necessary contracts. The business formation process requires you to:
Get federal and state tax ID numbers. When establishing a business, the owner needs to get their state and federal tax ID numbers. These numbers are like a personal Social Security Number for the business. With these tax ID numbers, businesses pay state and federal taxes.
Apply for the necessary licenses and permits. Most businesses require multiple licenses and permits obtained from state and federal agencies. The licenses and permits your business needs depend on many factors, including the type and location of your business.
Purchase business insurance. Getting business insurance is an essential yet overlooked step in business formation. Business insurance can protect your business from the unexpected costs and losses caused by natural disasters, accidents, lawsuits, and other events.
Business Formation Attorney Serving Upper Darby, Pennsylvania
The knowledgeable business formation attorney at Sabir Law Group is prepared to help assist you at each step of establishing a business in Upper Darby, Pennsylvania, and throughout the greater Philadelphia area. Schedule a case review with Attorney Sabir today to discuss the business formation process and understand which legal options will meet your needs.