Pennsylvania Business Organization, Business Formation and General Business Law Information

Provided below is information for you to review. Whether you are staring a new business or have an operating business, just click on the topic you are interested in to be directed to the section that contains the information. From time to time, and as time allows, we will be adding additional information about Business in Pennsylvania. You can always get back here by clicking the "Back to Top" button. We hope you find this information about starting a business in PA and when to consider retaining a business attorney helpful.

• To Incorporate or Not Incorporate My Pennsylvania Business, That is the Question
  
• Should I Use a Form Service Such as Legal Zoom to Form My Business in Pennsylvania?
• Should I Get Insurance for my Pennsylvania Business and, if so, What Kind?
• What about Business Policies and Procedures? Should I Have Them?
• Do I Need a Pennsylvania Business Lawyer When Dealing With Contracts?
• Should I Contact a Pennsylvania Lawyer When Entering Into Leases?
• When Should I Hire a Pennsylvania Business Attorney and What For?
• Why Choose Dougherty Law As My Pennsylvania Business Lawyer?

To Incorporate or Not Incorporate My Pennsylvania Business, That is the Question

The method you choose in business formation, also known as business organization and business incorporation, can have a significant impact on the level of liability and how your business is taxed. For example, owning your business in the form of a sole proprietorship provides you little, if any, liability protection. The method you choose will have advantages and disadvantages. The choice of formation is also important when it comes to whether you are starting the business by yourself or if you will be sharing ownership with someone else. You may be accepting liability for those you are in business with. Getting into business is also an expensive proposition. You could owe tax without ever having "conducted" a day of business. The act of formation and putting assets in the business alone can create taxable liabilities that you may not even be aware of.

The form of organization you choose should fit with your comfort level in terms of liability. It should fit with the goals. You should consider the products and services you are offering and the liabilities associated with those as well. It should fit with your expectations of the start-up phase, continued operations and future goals.

Many lawyers advise that every business should be incorporated or operate in another form that offers some type of structure that limits liability. Again, while incorporating is no guarantee against personal liability exposure, it is an effective shield against the inherent risks and dangers of operating a business. While incorporation does add to the start-up costs, it very well may be the best decision you made in the long run.

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Should I Use a Form Service Such as Legal Zoom to Form My Business in Pennsylvania?

Well, first, we are not associated with Legal Zoom or any other "Form Farm". These services are typically not provided by an attorney and may not even be provided by someone in your state or where you are forming your business. Some are attorneys, but still cannot offer advice as they are not licensed in your state. As such, they are not acting in the capacity of an attorney nor are they allowed to unless licensed to practice in the state in which you are forming your business. Beware of any "Form Farm" who offers you what appears to be legal advice of who provides an opinion as to what you should do unless they are a qualified attorney. If you look closely at these "Form Farm" sites, you will normally find disclaimers that state things such as "This website is not intended to provide legal advice,” or this site does not create a client attorney relationship" which includes the products you buy. Quite simply, it is because they cannot.

You may have noticed that this website has similar disclaimers. That only applies to the website however, and not to the services that are offered. WE provide services for anyone who is interested in starting a business in Pennsylvania. However, once you enter into a contract for legal services from our firm, there is an attorney-client relationship and then we CAN PROVIDE YOU LEGAL ADVICE. You can discuss your goals, your ideas, your future plans with us and other factors that might assist you in deciding the choice of business formation. We are licensed to practice law in the state of Pennsylvania and are subject to the Laws of Professional Responsibility in the State of Pennsylvania. We are insured in the advice we provide and the products we create. A law firm that is not insured must disclose to you that they are not. These are protections that you simply will not find with nearly any "Form Farms" such as Legal Zoom."

We advise clients not to engage in setting up any businesses without having consulted with a legal professional first. Even the state of Pennsylvania suggests that you consult a legal professional on their business website.

In some cases, you may set up a business that you believe protects you and your personal assets from liability. However, the "Form Farm" is interested in a quick buck and often will not provide you with the advice you need to protect yourself from becoming personally liable no matter what form of organization you choose. They may even say things like you save some amount using their services rather than a lawyer. I have found these estimates in savings to be excessive and it is also my opinion that they are misleading as they cannot provide the protection, assurance and advice that only a qualified attorney can and they simply cannot make such a claim as attorneys fees vary widely. Some "Form Farms" will send you your product and then suggest you have it reviewed by an attorney but will not tell you that up front. So be careful when you read such statements and claims.

Another reason for hiring an attorney to start your business is that in doing so you form a relationship with a qualified, licensed business attorney who can help you avoid the pitfalls and help reduce the chances of your making mistakes. You also will have formed a relationship with someone whom you can go back to later if problems arise. An added bonus in this respect is that if you set up your business with an attorney, they will already have an understanding of your unique situation which may help reduce legal costs, assist you better with your issue and perhaps provide a better outcome or service deepening on what your situation is. Face it, businesses involves assessing your risks, reducing those risks and forming business relationships, something you will not be able to do adequately with any "Form Farm" such as Legal Zoom as they simply cannot advise you before you form your business, exactly when you need sound advice. That simple. The attorney may also help direct you toward good resources or other qualified professionals.

Why not start out by forming a relationship with a qualified, licensed attorney who can be in your corner for years to come? As legal advice can only be rendered by an attorney and going into business can have significant effects on liability, we recommend that anyone who is going into business always seek the advice of a qualified business lawyer such as Attorney Raymond Dougherty and Dougherty Law Associates, LLC.

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Should I Get Insurance for my Pennsylvania Business and, if so, What Kind?

Insurance is often an overlooked issue. People get sued all the time. And, unfortunately, there are those out there ready, willing and able to file unscrupulous lawsuits against you. We see the results in the news all the time. Assets need protection from things such as theft and fire. One recent theft from an art museum resulted in $52 MILLION in losses that there was no insurance for. It is entirely possible that some on that board of directors and some of the employees may be subject to personal liability for such a failure.

Business interruptions can have a devastating impact on income from operations, and your own income. Not having he appropriate insurance could also subject you to personal liability if your business field requires it. Having employees also may require mandatory insurance such as worker's compensation and unemployment insurance. At a minimum, we recommend that every business have a comprehensive general liability policy. Other insurance may also be appropriate for your business, such as professional errors, acts and omissions, malpractice insurance or products liability coverage.

If a claim is filed, an insurer may be required to defend you depending upon your coverage under the policy. If so, the insurance company may have to pay for the costs of the litigation, and perhaps the full cost of any judgment rendered against you depending on your limits. The litigation costs and judgment alone may be enough to drive your business out of business and without the insurance you could even find your personal assets such as your home at risk and could even be forced into business and/or personal bankruptcy.

Insurance presents very complex issues. We at Dougherty Law can assist you with assessing your risks and recommend things that you can do to reduce that risk even without insurance. We can also provide some information about insurance. However, Dougherty Law and Attorney Dougherty always recommend that you talk to a Qualified, Licensed Insurance Agent familiar with business issues. We also recommend that you speak with the insurance professional BEFORE starting your business as what you may learn may impact your decision in the choice of formation for your business and the costs will impact your financial projections and business plan.

Finally, ALWAYS read the policies. Most of us have heard this time and again but for whatever reason this is something that so many people fail to do business as well in our private affairs as well. There is nothing worse than upon the happening of some event, you learn that you are not covered when all along you believed you were, but you just did not read the policy. If, after reading the policy, you still are not sure if you are covered for a particular issues, ask your agent and also ask that they show you the answer in the policy as you should be concerned anytime someone is acting in a sales capacity. Pay particular attention to the EXCLUSIONS section as your particular policy may not cover something that someone else does.

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What about Business Policies and Procedures? Should I Have Them?

Policies and Procedures serve a number of functions. From an obvious perspective, they serve as guiding principles to those in the organization about how your organization should conduct business, who has authority to engage in certain activities or handle certain matters, and what happens when the rules are violated. Behind the lines, they also serve as a risk reduction tool. In providing clear directives, you can also reduce the risk of your getting sued, or, if you do get sued, perhaps assist you in prevailing against the claim. At a minimum, if you are going to have employees, you should have an employee handbook. This will also help you in handling your human resource activities and in hiring, firing and discipline. We also recommend that you do not stop there. It is good to have policies and procedures for many aspects of your business.

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Do I Need a Pennsylvania Business Lawyer When Dealing With Contracts??

Reviewing and drafting of business contracts can be a tricky proposition. The language may not be understandable to you and a particular clause may seem unimportant when in reality, it has very important implications. Contracts may not be even-handed putting you at a severe disadvantage. Perhaps they asked for you to agree to terms that are far reaching. And believe it or not, some contracts may even allow a party to obtain a judgment against you without actually having to sue you to do so. In business, you need the completive edge when you can gain it. And you certainly do not want to give away things away for free which may very well be the case when you give concessions unnecessarily, or perhaps agree to things that are not normally asked for. A good business lawyer should be able to identify the unusual things and tell you what you should or should not accept. Your attorney may find things that are not even handed and may be able to level the playing field. He, or she, may be able to suggest ways to reduce or entirely eliminate a risk. You may be the smartest person in the world, but have no experience with contracts. You simply would not know what to look for and may not feel very smart if something comes back at you later. As contracts are everything in business, you should take care in entering contracts and should read them completely and assure you understand them completely. The contract may dictate how to handle your assets and perhaps keeping the assets in a different form of corporate ownership to protect them. Dougherty Law recommends that at a minimum you should have an attorney review every contract that will significantly affect the business or income of the business. If necessary they can renegotiate the contract for you. Or you can involve the business attorney from the outset. Attorneys are trained in the art of persuasion and negotiations. They money you spend on the business attorney may often be saved up front or on the back end or in the short term or the long run. Lawyers love to say "Pay Me Now or Pay Me Later", but the words often come back to haunt business owners. Don't get caught off guard. Hire the right business law attorney ahead of time. 

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Should I Contact a Pennsylvania Business Lawyer When Entering Into Leases?

As with contracts, leases can be very tricky as well. Everyone has heard the old adage "Location. Location. Location". So you have found the perfect location and now you think you are ready to sign the lease. But have you thought of all of the considerations? Do you even know what they are? Does you lease give you the options to renew if you want to stay and/or alternatively let you get out if you need more room? Are they making you personally guarantee. Are you putting up all of your assets. What happens if they do not perform proper upkeep? Shopping centers are notorious for one-sided leases that enable them to take control of your assets, your bank accounts or your business. They can exceed one hundred pages. If they know you are acting on your own and without an attorney, chances are you will be taken advantage of. They will try anything and everything to give them the best deal possible and to get you, your money and your assets whether you succeed or fail. Dougherty Law recommends seeking the advice of an attorney before signing any leases and having the attorney read over the lease to protect. If necessary renegotiate the lease for you or you can involve the business attorney from the outset. Attorneys are trained in the art of persuasion and negotiations. The money you spend on the business attorney may often be saved up front or on the back end, in in the shot term or the long run. Lawyers love to say "Pay Me Now or Pay Me Later", but the words often come back to haunt business owners. Don't get caught off guard. Hire the right business law attorney ahead of time.  Call business Attorney Ray Dougherty at Dougherty Law.

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When Should I Hire a Pennsylvania Business Attorney and What For?

The following is a list of when we recommend you should retain a business lawyer. It is certainly not exhaustive as there are many reasons you might need a business attorney. Some of this list is covered more in depth elsewhere within this information. Dougherty Law recommends that you seek the advice of an attorney in the following circumstances:

Before starting your business and before forming your business. Before entering into leases or during lease negotiations; Before entering into contracts or in drafting contracts for your business; When changing the formation of your business; When Buying or Selling a Business; When Terminating a Business; Before you accept any personal liability beyond what your form of business organization usually allows for. Upon being noticed that you are going to be sued or upon actually being served with any suit; or Whenever you feel it is necessary

You should be sure to retain you attorney with enough advance time for them to be able to adequately address your issues and for you to then make decisions based upon the advice you obtain. Being served with a lawsuit requires that you respond within a certain amount of time and often in as little as twenty (20) days or even less. Your business attorney may need to prepare, draft and file an answer or motion. Arriving at their desk one day before the deadline will not serve your best interests or the best interests of your business and may leave you in a position where you cannot find counsel. Failure to respond may result in a Default Judgment against you which may be costly to try and reopen if you can even open the judgment at all. Rarely, indeed very rarely, would you ever let a complaint go and you should never do so without the advice of a business attorney or other attorney.

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Why Choose Dougherty Law As My Pennsylvania Business Lawyer?

Dougherty Law is about relationships. We offer competitive rates to get your business. We offer free initial consultations in the belief that we will get that business and keep it. And, we believe that those we serve will show us that they are pleased with us by referring others to us, the ultimate compliment in the legal industry.

Business Attorney Dougherty knows and understands the complexities of business. And he understands both the difficulties of operating a business day to day. He has owned several businesses and is the founder of the firm. He holds a number of business degrees including a Bachelor of Business Administration, a Master of Business Administration and Master of Science all earned at Temple University's highly rated Fox School of Business and Management. In addition to these and his law degree, he will have a Master of Tax and a Certificate In Estate Planning Certificate in May after completing one final class in the Spring of 2008. He has worked for and helped small businesses and large corporations as well and in many areas of business including accounting and finance, operations and consulting. Make Dougherty Law and Business Lawyer Ray Dougherty your partner in business. Your successes are our successes. To learn more about the firm and Business Attorney Ray Dougherty, Click Here.

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Dougherty Law engages in a number of practice areas including.