While you do not legally need an attorney to form a Pennsylvania business entity, it’s in your best interest to retain an experienced Philadelphia business formation lawyer if you’re creating an LLC, partnership, or corporation. Failing to follow Pennsylvania’s strict corporate domestic filing and naming laws can result in rejection, tax consequences, and even personal liability for corporate transactions.

Discuss the business formation services you need within your budget with the experienced business entity lawyers at Spengler & Agans in Philly, PA. Get your business started and funded the right way.

Recognized Pennsylvania Business Entities

The corporate and business entities available to entrepreneurs vary by state, as do the specific legal formation requirements for each domestic and foreign corporation. The Commonwealth recognizes the following business entities:

  • Corporations: General business entities with shareholders and officers. It costs more to maintain, but affords the best legal protections.
  • Nonprofit Corporations: Provide no financial benefit to shareholders, officers, and members other than reasonable salaries and expenses. However, not-for-profit organizations obtain significant tax benefits from state and federal sales, property, and income taxes.
  • Partnerships: Pennsylvania recognizes general partnerships, limited partnerships, and limited liability partnerships. If you’re taking on an equity partner or forming a business together, it’s essential to choose the correct partnership entity. 
  • Limited Liability Companies (LLCs): This popular entity is cheaper and easier to form than a corporation but provides similar legal protections for owners. However, it’s considered a partnership for tax purposes.
  • Foreign Associations: Any out-of-state or international organization not formed under Pennsylvania law but looking to conduct business within the Commonwealth.
  • Sole Proprietorship: An individual business formed without official documentation, but also without personal liability protections.

Each entity has specific formation and naming requirements, including various tax benefits or consequences. You should work with an experienced Philadelphia business formation attorney to determine which entity is the best choice for your needs before filing the formation paperwork.

Organizational documents form the legal backbone of any new business entity. For LLCs, the primary governing document is the Operating Agreement, which outlines members’ rights, the management structure, profit-sharing, and procedures for significant decisions. Corporations, on the other hand, rely on Bylaws and Board Consents to define governance rules, corporate formalities, officer roles, shareholder rights, and approvals for key actions.

Regardless of entity type, every business should also maintain a suite of essential template agreements, such as customer contracts, employee confidentiality and IP assignment agreements, vendor agreements, and NDAs—to protect the company’s interests, establish clear expectations, and reduce legal risk in day-to-day operations.

Business Formation Lawyers

While you do not legally need an attorney to start a business in Pennsylvania, the Commonwealth strongly recommends consulting with legal counsel before choosing and registering a business entity. The experienced business formation attorneys at Spengler & Agans can help you form your entity correctly, potentially saving you from significant future financial liability. Call 610-778-2034 or contact us online to get small business help within your budget.