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Pennsylvania Business Formation Blog

Freelancing? Protect yourself with an LLC

Ah, the freelance life — showing up for work in your pajamas, carving out your own work schedule, low overhead — you're living the dream.

And you're certainly not alone. Data from September 2014 indicates that 53 million individuals work as freelancers in the United States, which breaks down to over one-third of the country's working population.

How do I form an LLC in Pennsylvania?

If you are considering starting a business in the state of Pennsylvania, you should think about forming an LLC from the beginning. Doing so gets a lot of paperwork out of the way and provides you with a handful of tax advantages. Having your business listed as an LLC also protects the owner's personal liabilities should the company ever face a lawsuit. Here's how you form an LLC in Pennsylvania.

You must first follow the guidelines for naming your LLC. You cannot use any restricted words, such as attorney, bank or university without having extra paperwork completed and an attorney associated with your LLC. You cannot use prohibited words such as secret service, FBI or Treasury. Once you decide on a name for the company, be sure to check if it is available using the State of Pennsylvania website.

Benefits of creating an LLC for all independent sales consultants

Running a business can be stressful, exciting and overwhelming all in one shot. Even if you have employees on the payroll who can help you, it can still be a difficult thing to do. No matter the type of business you have, it's important to look at all the ways you can protect it and yourself as the owner. Here are the benefits to creating an LLC for your business.

One of the biggest benefits of forming an LLC is that you will be able to protect the assets of not only the business, but also yourself. The LLC will protect the owner of the business from liabilities and debts since he or she is typically not responsible for them. The LLC prevents creditors from going after the personal assets of the business owner when trying to collect unpaid debt.

Starting a new business in Pennsylvania

Creating a business can appear to be a daunting task. Planning, creation, expansion -- business owners often need support and legal assistance to cover new business requirements. Let's review some of the points that beginner business owners and early employees need to consider.

In Pennsylvania, the Departments of State, Revenue and Labor & Industry are often involved in a business' official creation. The name must be registered with the state government and often published in the home county's paper of record for public view. Several employment arrangements require licenses and permits from state or municipal authorities.

  • Business structure. Different business structures help guarantee vital issues such as ownership shares, liability and access to financial services. A sole proprietorship must be registered with a unique name, and partnerships need specific documents drawn up for court filings.
  • Registration. A business must be registered with the proper authorities so licenses can be approved, important notices can be sent and taxes can be collected. The U.S. Internal Revenue Service (IRS) assigns businesses with an employer identification number (EIN), and the Pennsylvania Department of Revenue may issue a sales tax license.
  • Operations. Financial records will need to be kept, which may require storage, software or other infrastructure for your new business. Business plans and loan documents can help raise money for basic supplies and business services.
  • Intellectual property. Many businesses rely heavily on unique products, processes or other innovations that require legal protection as the business grows. Patents and copyrights are examples of legal devices that guarantee rights for these innovations, either in the name of an individual or a corporation.

Don't make LLC formation a DIY project

When forming an LLC, the common wisdom is that doing it yourself is the less expensive option. Because it’s cheaper, people assume that it’s better to set up their LLC on their own rather than work with a business organization attorney.

It’s true that you may pay less initially. However, people frequently make mistakes when trying to set up their own LLC. These mistakes can come with significant long-term costs. These errors can wind up costing you more over the long run than if you had worked with a specialist in the first place.


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Latrobe, PA 15650

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