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What are the steps an individual in Pennsylvania should take to form a small business, and what forms and registrations are required?

Picture of Chris Battis By   ·  1 minute read

To form a small business in Pennsylvania, an individual should take the following steps:

  1. Choose a Business Structure: There are several structures to choose from, such as sole proprietorship, partnership, LLC, or corporation. Each structure has its own benefits and drawbacks, and it is essential to choose the one that best suits your business goals and objectives.
  2. Register your Business Name: It is mandatory to register your business name with the Pennsylvania Department of State. To ensure that your chosen name is available, you can check the availability on the department's website.
  3. Obtain Necessary Licenses and Permits: Depending on your industry, there may be specific licenses and permits required by the state, local, or federal governments to operate your business legally.
  4. Obtain an Employer Identification Number (EIN): An EIN is a unique nine-digit number used by the IRS to identify businesses for tax purposes. It is necessary to have an EIN to open a bank account, file taxes, and hire employees.
  5. Register for Pennsylvania Taxes: Depending on the nature of your business, you may be required to register for various taxes like sales tax, employer taxes, etc. To register, you can visit the Pennsylvania Department of Revenue website.
  6. Open a Business Bank Account: Separating business finances from personal finances is crucial for record-keeping, tax purposes, and personal asset protection.

Regarding the required legal documentation, an individual must file a Certificate of Organization with the Pennsylvania Department of State to form an LLC, Articles of Incorporation for corporations, or a Business Registration Form for sole proprietorships and partnerships. Furthermore, it is a good practice to have a written Operating Agreement for an LLC, Bylaws for a corporation, or a Partnership Agreement for partnerships.

It is important to note that the above steps are general guidance, and there might be specific requirements or exemptions based on the individual business situation. Seeking legal advice from a licensed attorney is recommended to ensure compliance with all legal requirements, minimizing legal liability, and avoiding potential legal issues.