Let’s Get Down to Business: A Guide to Incorporate Your Pennsylvania Corporation
What’s All the Fuss About Corporations Anyway?
A corporation isn’t just a business name – it’s an entity, recognized by the law, with its own persona. Think of it like this: it enjoys the perks of a person, including rights, benefits, and responsibilities. It has its back covered with limited liability, a central decision-making system, and it keeps on going even if ownership changes hands. Among various business structures, a corporation is the most intricate. The corporation itself actually owns the business and as a result, provides shares of stock to people who invest in the company. The scope of business operations is confined to those specified in the corporation’s founding documents.
Not All Corps Are Created Equal: Explore Your Options
Under the laws of Pennsylvania, it’s possible to establish a range of specialized forms of corporations. These specialized forms of business corporations can either be established when initially filing the articles of incorporation or can opt for specialized status later on by amending their existing articles, subject to the necessary approval from shareholders.
Nonstock corporations – Under Chapter 21 of the Business Corporation Law in Pennsylvania, nonstock corporations operate differently. These corporations don’t issue shares of stock; instead, they have memberships. Terms like “shares,” “shareholder,” are replaced with “members,” “membership register,”. For instance, a domestic mutual insurance company, which is a type of insurance corporation, must operate as a nonstock corporation.
Statutory close corporations – In Chapter 23 of the Business Corporation Law, for a statutory close corporation, the articles must state that neither the corporation nor any shareholder can publicly offer shares as defined by the Securities Act of 1933. A closely held corporation is one with either fewer than 30 shareholders or one defined as a statutory close corporation. All business corporations are covered by this chapter, except for management corporations.
Registered corporations – Chapter 25 of the Business Corporation Law defines a registered corporation as a domestic business entity registered with the Securities and Exchange Commission, obligated to report under the Exchange Act.
Management corporations – Chapter 27 of the Business Corporation Law deals with “compensation” and “benefits,” which mean the money that directors or officers of the corporation need to pay taxes for, either right away or in the coming years, following the rules of the Internal Revenue Code of 1986. This chapter is applicable to all business corporations, except for statutory close corporations or professional corporations.
Professional corporations – Chapter 29 of the Business Corporation Law grants licensed individuals the authority to provide professional services through a professional corporation without limitations. This chapter is applicable to all business corporations except for management corporations.
Insurance corporations – Chapter 31 of the Business Corporation Law defines an insurance corporation as a local business entity involved in the primary business of underwriting insurance or reinsurance. Such corporations are regulated by the Pennsylvania Insurance Department.
Benefit corporations – Chapter 33 of the Business Corporation Law pertains to Pennsylvania-based for-profit businesses that are established with a primary goal of generating a general public benefit alongside their regular business objectives. This includes activities like providing valuable services to underserved communities, fostering economic growth beyond job creation, preserving the environment, enhancing human health, supporting arts and knowledge advancement, aiding technology startups, facilitating capital flow to socially beneficial entities, and achieving various societal or environmental benefits.
Let’s Get Incorporatin! Forming Your Pennsylvania Biz
To establish a business corporation in Pennsylvania, you need to submit Articles of Incorporation – For Profit [DSCB:15-1306/2102/2303/2702/2903/3101/3303/7102] along with a docketing statement [DSCB:15-134A] to the Bureau of Corporations and Charitable Organizations. For comprehensive details on the application process, including forms and guidelines, refer to the Bureau’s Registration Forms page.
The PA Incorporation Step-by-Step: We’ll Hold Your Hand Through It
Business Name: Opt for a name that includes an identifier, like these examples: Corporation, Corp., Incorporated, Inc., or Limited. It’s important that the name you decide on is unique and different from existing names in the state. When you officially submit your Articles of Incorporation to the state, your corporation becomes a legal entity. To check if your desired name is available, explore the Pennsylvania Corporation Search tool until you find the ideal name for your corporation.
Office Registered: As per Pennsylvania Consolidated Statute § 1507, each Pennsylvania corporation is required to designate a registered office. While it’s not mandatory to engage a registered agent, if you choose to do so, ensure that the registered agent uses their address on your articles whenever feasible. This step helps enhance privacy protection.
Articles of Incorporation: In addition to your Articles, you are required to provide:
- Docketing Statement: In conjunction with your articles, your corporation is obligated to present a Docketing Statement. This statement should encompass your corporation’s name, the individual’s name and mailing address accountable for tax reports, a succinct outline of your business activity, your tax or fiscal year’s conclusion, and your federal tax ID.
- Designate a Registered Agent: Your corporation is required to designate an agent for receiving legal documents, often referred to as a statutory agent, resident agent, or registered agent. This individual or entity accepts legal papers on behalf of your company. The chosen agent must either be a state resident or a business authorized to operate within the state. It’s essential that all agents possess a physical street address.
- Allocate Shares: Unless you’re forming a nonstock corporation, specify the total quantity of shares you’re establishing. Stock corporations are required to generate a minimum of one share.
- Commencement Date: You have the option to provide a date and time within the next 90 days. If no details are entered, your corporation’s initiation will be marked as the filing date. Note: Many corporations choose to leave this section blank.
Bylaws: These rules establish the operational guidelines for your corporation. Your bylaws must detail the count of directors in your corporation. If you don’t indicate a number, you must maintain a minimum of three directors, without any upper limit. Directors must be at least 18 years old, and residency in Pennsylvania or shareholding isn’t obligatory.
Adhere to Tax and Licensing Obligations: Ensure you address any extra tax and regulatory prerequisites. Obtain an EIN, which is available at no cost from the IRS. Additionally, based on your location and the nature of your business, you might be obliged to acquire specific local or state business licenses.
Establish a Recordkeeping Binder: Every Pennsylvania corporation must submit annual reports. Your corporate records binder should contain the following: Meeting minutes, stock certificates, and stock certificate stubs. Keep this records book at your main corporate office. The person incorporating appoints initial directors, who serve until the first shareholders’ meeting.
You’re Official! Now Let’s Get Your PA Corp Up and Running
Once your Pennsylvania Articles of Incorporation receive approval, there are a few more crucial actions to complete. These include issuing a publication notice, obtaining an EIN, creating bylaws, conducting your initial meeting, setting up a bank account, and familiarizing yourself with state reporting and tax obligations.
Following your corporation’s formation in Pennsylvania, it’s essential to satisfy the state’s publication requirement. As outlined in Pennsylvania Consolidated Statute § 1307, you must publish a notice of your intent to incorporate or a notice confirming your incorporation in two separate newspapers. One of these newspapers must be a recognized legal publication.
Sealing the Deal with Legal Wizards: Crafting Your Pennsylvania Corporate Adventure
Starting a corporation in Pennsylvania takes several key steps to create a legally valid and well-structured business. You’ll need to pick an appropriate name, choose a registered agent, write up bylaws, and handle taxes properly – every detail matters. Following all the state rules carefully will help your corporation run smoothly and avoid issues. One really important thing is getting legal help from our attorneys throughout the process. Setting up a corporation involves tricky legal procedures and regulations.
Our Attorney can guide you to ensure your business is formed correctly and follows all the laws. They can help decode complex terminology, draft solid bylaws, understand tax obligations, and file the right paperwork. Their expertise also helps spot potential legal problems early, protects your personal liability, and makes choices that match your business goals. While you may think handling incorporation yourself is doable, an attorney prevents expensive mistakes, lawsuits, or issues with regulators later on. With our legal guidance, you can establish your Pennsylvania corporation with confidence and set up for success as a lawful, compliant business.
Premiere Legal Solutions LLC provides thorough legal advice on all facets of incorporating your company. We aim to assist business owners in navigating this legal route with confidence and simplicity. Contact us at 267-245-0649 or email us at email@example.com to schedule a consultation and take the first step in securing your company’s future.