Technically, no. However, there are many reasons why you should not incorporate your business without the help of a legal professional. Incorporating a business yourself or using an online service is akin to treating your own medical conditions using an online medical site. Neither one yields consistent, successful results. You might use the Internet for some preliminary research, but when your car breaks down you take it to a mechanic. When you’re feeling under the weather, you see a doctor. Why should it be any different when incorporating your business? Leave it to the professionals. Don’t let your future depend on a one-size-fits-all incorporation program. The only way to protect yourself and your assets is to consult a qualified, experienced attorney. The considerations involved in choosing a business structure are often complex and the paperwork involved can be daunting. The attorneys at Elliott & Davis have the expertise and business experience to offer you a unique perspective as you organize your company. Our attorneys understand that starting a company is an extension of yourself and they will do their part to make sure you have a solid foundation on which you can build your success.
Many factors can affect your decision as to which corporate entity is right for your business. The best way to make a final call is to consult an attorney so that you can go over all your options. Click here for a comparison of the basic incorporation options and significant characteristics of each entity type that you should consider.
The attorneys at Elliott & Davis can help you in choosing the right name for your business entity. It is wise to choose a business entity name that is easy to pronounce and spell, memorable, distinctive, has an available domain name, does not infringe on any trademarks and is legally available in the state of incorporation.
Pennsylvania requires that all companies maintain an office within the state OR have a CROP that is registered with the Secretary of State of Pennsylvania. Elliott & Davis is registered with Pennsylvania as a CROP and can provide that service to you whether you are out-of-state or merely concerned about privacy. Home-based businesses should seriously consider using a CROP. In Pennsylvania and many other states, service of process is done by a County Sheriff. Litigation often involves lot of served documents and many private citizens would prefer not to have frequent visits by law enforcement personnel to their home. The Pennsylvania Department of State website also shows the registered address of every business (P.O. Boxes cannot be used) and many people prefer not to publish their home address for reasons of maintaining privacy. There is also a certain amount of prestige in having a distinguished law firm like Elliott & Davis be your CROP. For this service, we charge $150 per year or $300 for three years.
The attorneys at Elliott & Davis have experience working with a variety of different business entities, including: S-corporations, C-corporations, Limited Liability Companies (LLCs), Partnerships, Professional Corporations, and Not-for-Profit Corporations.  No matter which entity you choose, they all require filing specific government documents.  It is also wise to consult with an attorney in order to get customized legal documents such as by-laws, articles of incorporation, sales contracts, subcontractor agreements, etc. You may also want to seek the advice of an attorney for help with any other legal issues not directly related to incorporating your business including tax, finance, and employment issues.
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Choosing where to form your entity is an important decision.  Incorporation costs, taxation and corporate laws vary from state to state, making some states advantageous for certain small business owners.

In most cases, incorporating your business in the state where your company is physically located makes the most sense.    No matter what form of entity you choose, you must pay filing fees to the state where incorporation documents are filed, and will be subject to ongoing requirements and fees imposed by that state.  Some business owners mistakenly think they will save money by incorporating in a state with low fees, even if their company is neither located nor conducts business in that state. Keep in mind that companies incorporated in one state but doing business in another state(s) must register as a foreign corporation and pay annual fees to transact business in those state(s).

The added costs of fulfilling the ongoing and taxation requirements imposed by the state of incorporation and state(s) of foreign qualification often outweigh the perceived benefits of incorporating outside the home state.

Pennsylvania is a great state to incorporate your business because it is a “business friendly”, Delaware Model state and there are not annual fees (except for restricted professional forms of entities).

Delaware and Nevada are two states in which some small business owners opt to incorporate a business. They offer unique advantages for certain types of businesses.

Some potential advantages of incorporating your business in Delaware include business friendly laws, courts that focus solely on business law that use judges instead of juries and taxation requirements that are more favorable to companies with a large number of authorized shares of stock, no personal income tax for nonresidents.  For corporations, there is no state corporate income tax for companies that are formed in Delaware but do not transact business there (but there is a franchise tax).

Some potential advantages to forming a corporation or LLC in Nevada include the fact that Nevada has no state corporate income tax and imposes no fees on corporate shares and there is no personal income tax or any franchise tax for corporations or LLCs (but initial and annual statement fees and business license fees apply).

If you form in Delaware or Nevada but you transact business in another state, it is likely that you will have to foreign qualify your business in that state.  In general, only larger entities or corporations that are seeking venture capital should incorporate in Delaware.  Although Nevada incorporations have become popular, the tax advantages are almost never worth the additional expense.

For questions about the best state of incorporation for your business, or to determine if you need to foreign qualify in another state, please give Eric Davis a call at 412.434.4911 ext. 11.

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