Laputka, Bayless, Ecker & Cohn, PC
TOLL FREE 800-582-6452
Laputka, Bayless, Ecker & Cohn, PC

LOCAL 570-861-5905
TOLL FREE 800-582-6452

Trusted Attorneys in Hazleton,
Serving All Northeastern Pennsylvania Communities

Our Blog

What happens to my online accounts after my death?

Your estate plan may include a digital executor and instructions to carry out specific wishes for your online accounts. If they contain digital assets, such as downloadable songs or books, you may need to list them in your will or trust, along with a beneficiary....

Choosing the right formation for your business

To run a successful business, you need to establish a strong foundation for your company to grow. The right foundation starts with selecting a formation for your newest venture, which depends on a multitude of factors. Luckily, there are several business formations to...

How do wills and trusts compare?

As you create your estate plan, you do not necessarily have to choose between a will and a trust. Because they are different documents that accomplish different things, many people include both in their estate plans. However, in some situations, it is better to have...

Laputka, Bayless, Ecker & Cohn, PC
One South Church Street
Suite 301
Hazleton, PA 18201

Toll Free : 800-582-6452
Phone : 570-861-5905
Hazleton Law Office Map

Strategies for business entity selection: a step-by step guide

Everybody enterprising to form a business should ask some basic questions about what their goals are in order to form the most effective business entity.

When taking the steps to forming a business, Pennsylvania entrepreneurs and investors have a variety of different forms that their businesses could take. There are limited-liability corporations, S and C corporations, partnerships, sole proprietorships, non-profit corporations and benefit corporations. Is there a single “best” structure for a business to take? There is not a simple answer to this question. In preparation for choosing the right business entity, there are a few preliminary evaluations that aspiring business owners can make to ensure they are working towards the most sensible and profitable setup.

What are the goals of the business?

The first question any smart aspiring business owner should ask is what is the business aiming to accomplish. A major part of this consideration is the idea of allocation of profits. The University of Pennsylvania School of Law provides a clear breakdown of this process as described in the following list:

· If a business is not looking to make a profit or get any investments, a non-profit may be the type of business to consider forming.

· One of the more diverse business entities that have varying options for how the company will be managed is a limited-liability corporation or LLC. LLCs still welcome investments from private financiers, and allows certain tax-breaks not possible for other entities.

· An S-corporation is an entity that still allows investors to privately finance the company, but the way things are managed and how taxes are paid are both more set in stone.

· Those who don’t want their investors to get pass-through tax treatment, and who are alright with having a straightforward management structure will probably be looking to form a C-corporation.

· Another option that is not always considered is forming a benefit corporation. This type of business entity is different from non-profits. It is reserved for those who do have a social mission, but who also aim to make a profit in conducting their business.

There are a lot of factors that come into the formation of each business entity, including how retirement plans will work, the method for accounting, and whether there will be a self-employment tax. For instance, companies with a sole proprietor, even non-profits, are still subject to self-employment taxes, while C-corporations, S-corporations, and LLCs are not.

How an attorney can help strategize

While it is possible to lay out the different business entities and choose which one seems to fit best based on a comparison, it remains true that there are many different implications for each type of business entity. Once someone in Pennsylvania has chosen which business entity their corporations will be, it becomes more difficult to go back and revise the initial decision. It may be a good idea to seek the counsel of an attorney who practices business and commercial law in the local area to make sure all factors have been considered before making any final decisions.

Laputka, Bayless, Ecker & Cohn, PC
One South Church Street
Suite 301
Hazleton, PA 18201

Toll Free : 800-582-6452
Phone : 570-861-5905
Hazleton Law Office Map