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Benefits of LLC in Pennsylvania | Tax Credits, Pros and Cons

Benefits of LLC in Pennsylvania | Tax Credits, Pros and Cons published on

Benefits of an LLC in Pennsylvania

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There are many options available for starting an LLC, but few outweigh the benefits of an LLC in PA. Pennsylvania is one of the most prosperous North American states as one of the original 13 U.S. colonies—offering multitudes of tax incentives, credits, and programs for entrepreneurs to use. Before we get into the state-specific benefits of a Pennsylvania LLC, let’s go over the top advantages of forming a limited liability company in general.

Limited Liability Protection

Starting with the most crucial benefit of a PA LLC, limited liability can separate the financial and legal obligations of the company from its members. In case of a lawsuit, members can be protected due to a legal shield the entity provides, which defends personal assets. Keep in mind that this liability protection is limited and will not shield a member from wrongful or illicit acts.

Pass-Through Taxes

Another vital benefit of a PA LLC is its ability to avoid federal income taxes. Taxation will bypass the LLC and go directly for the members’ profits. In this scenario, all of the money earned by the LLC can go straight to the member, and taxation will only occur on their income. Other entities such as a C-Corporation don’t have this advantage, and its leaders are essentially taxed twice.

Simplicity and Flexibility

Other PA LLC benefits include its ease in formation and simplicity to sustain when compared to other entities. You don’t need to maintain certain company formalities or file taxes for the single-member LLC. You also have the flexibility of functioning as a single-member LLC, a multi-member LLC, or a multi-member LLC led by an operating manager.

Increased Perception of Credibility and Reliability

As a formal business entity, a limited liability company receives the perception of a more trustworthy business structure when compared to an individual or a sole proprietorship. Starting a PA LLC adds an extra layer of reliability for employees, customers, and other businesses. Your LLC is required to adopt ‘LLC’, ‘L.L.C.’ or ‘limited liability company’ into its name, which immediately lets people know that you are a formal business and not just a fly-by-night company.

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Pennsylvania LLC Advantages: Tax Credit Programs

The benefits of an LLC in PA don’t end with the general advantages; Pennsylvania is currently hosting several different tax credits and programs to aid economic development in the State. Depending on the nature and location of your business, you may be able to qualify for these incentives.

Research and Development Tax Credit Program

LLCs in Pennsylvania get incentivized to conduct certain types of research that qualify for tax credit compensation.

Mixed-use Development Tax Credit Program

This program grants PA LLCs tax credits for eligible construction or rehabilitation projects.

Malt Beverage Tax Credit Program

Are you in the business of manufacturing malt or brewed beverages? Well, you may be able to qualify by forming an LLC and applying for this program.

Educational Tax Credits

This tax credit applies to a PA LLC contributing to scholarship organizations that provide scholarships for students in underachieving schools.

Keystone Innovation Zone Tax Credit

This incentive nurtures entrepreneurship in Pennsylvania by offering tax credits to certain types of companies within the Keystone Innovation Zones.

Keystone Special Development Zone

This tax credit incentivizes the redevelopment of abandoned or deteriorated commercial and industrial sites.

Historic Preservation Tax Credit

This tax credit compensates a PA LLC for rehabilitating eligible historic structures.

Neighborhood Assistance Program

The NAP motivates the engagement in activities that improve community economic development in poor neighborhoods.

Resource Enhancement and Protection Tax Credit

Farmers and agriculture businesses can benefit from this tax credit under the tone that they implement proper management practices in agricultural operations.

Entertainment Production Tax Credit

Film or video game production companies can benefit from this tax credit.

Entertainment Economic Enhancement Program

This program rewards tax credits to tour operators representing musicians for live musical performances within the state.

Pennsylvania Resource Manufacturing Tax Credit

You’ll be awarded a tax credit of five cents per gallon of ethane bought and utilized in producing ethylene, with the condition that the company invests at least $1 billion in capital and creates a minimum of 2,500 full-time jobs while constructing the manufacturing facility.

Coal Refuse Energy and Reclamation Tax Credit

Certain facilities that generate electricity by using coal refuse to generate power, control acid gases for emission control, and use ash produced by the facilities to reclaim mining-affected sites, may be compensated with this tax credit.

PA LLC: Disadvantages

While an LLC in Pennsylvania may be a fantastic option for many entrepreneurs, it doesn’t come without its downsides—and in the context of certain types of businesses, it isn’t feasible or even possible. Let’s list the disadvantages:

  • More expensive than a Sole Proprietorship or Partnership in both formation and maintenance.
  • Annual report fee
  • An LLCs’ income is subject to self-employment tax due to profits passing through directly to its member(s). A corporations’ shareholder only pays such taxes on their salary and not on the corporate profits. For this reason, depending on your business, an LLC may not be the most tax-friendly entity for you.
  • Employee benefits such as medical insurance may get treated as taxable income in an LLC. For employees of a corporation, it may not be the case.
  • Raising capital may be limited by the inability of an LLC to issue stocks and bonds like corporations, discouraging investors.

Businesses that can’t start an LLC in Pennsylvania

Certain types of businesses are ineligible for PA LLC formations, some of these include:

benefits-of-an-llc-in-pennsylvania
  • Real Estate Investment Firms
  • Rare Coin or Stamp Dealers
  • Banks, Finance, Leasing, and Insurance Firms
  • Pyramid Sales
  • Charities
  • Churches
  • Loan Packaging
  • Multi-channel Distribution

Should the legal formation of an LLC get handled by Attorneys or an LLC formation service?

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“The formation of your PA LLC is a legal process; would you go to a mechanic for a medical procedure?”

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Starting an LLC in PA: Business Attorneys VS LLC Formation Services

In all fairness, LLC formation services have their place, but the concern lies in their inability, by law, to give you legal advice based on your business and personal needs. There are many cases of entrepreneurs unwittingly piercing the corporate veil and losing their limited liability protection for not having a map and compass of their judicial landscape. When forming and operating an LLC in Pennsylvania, those misinformed and misguided often overlook the legal implications and pitfalls concerning their business endeavors, such as transferring assets to other entities, failing to maintain proper separation of business and personal assets or identities, and failure to follow corporate formalities.

At no extra cost, Spiegel & Utrera, P.A. includes legal and business advice along with your PA LLC formation. You’ll speak to attorneys with a combined 175+ years of legal experience and cover all your bases.

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Wisconsin LLC Lookup Search for a Name

Wisconsin LLC Lookup Search for a Name published on

WI LLC LOOKUP – WISCONSIN LLC PRELIMINARY NAME SEARCH

Starting an LLC in Wisconsin begins with a WI LLC lookup; we will perform a preliminary Wisconsin LLC name search during the initial steps of LLC formation and ensure that your desired business name is available to you. Avoid choosing the wrong company name, and instead, learn how to create an advantageous one with the tips below.

WI LLC Lookup
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STEPS TO CREATE A NAME TO USE IN YOUR WI LLC LOOKUP

Before searching for the availability of a business name in the WI LLC lookup database, let’s go over how to craft great names for your Wisconsin LLC. We know how hard it can be to create an available limited liability company name that follows legal requirements, gives your business a competitive advantage, and represents your business values. Here are some steps to keep in mind:

Step 1: Make your LLC name memorable, catchy, and easy to pronounce

  • Consider a business name that insinuates what you’re offering, what you do, or what sets you apart.
  • You may use acronyms such as CVS or BMW, which help to shorten long names and make them catchy, memorable, and easier to pronounce.
  • Use word mash-ups for your WI LLC, such as Nabisco (former name of Nabisco Biscuit Company), Garmin (based on founders Gary Burrell and Dr. Min Kao).
  • Gain inspiration from mythology or classic literature to create a name, such as Nike (goddess of victory in ancient Greek religion).
  • Use foreign words or even your name, alias, or nickname.
  • Use map locations to identify potential LLC name variations based on your target market.

Step 2: Ensure it’s brandable

Brandable LLC names are typically undescriptive, such as Google or Amazon. Company names like these owe their branding potential to uniqueness and memorability. One of the main downsides to words like these is their non-descriptive nature, requiring additional investment in creating brand awareness.

Step 3: Confirm website domain name and social media availability

Apart from confirming your Wisconsin LLC name is legally attainable with the state in the WI LLC lookup database, some may also suggest verifying social media and website domain name availability, ensuring uniformity across all platforms.

Step 4: Make it timeless

An evergreen name that will always be relevant and stand the test of time.

Step 5: Consider the future

You want a name that won’t limit your growth, expansion, mergers, locations, and changes to your product line or services in the future.

WISCONSIN LLC SEARCH FOR A NAME

In performing a Wisconsin LLC search in the WI LLC lookup database, you will find out whether or not your name is legally available. Below we will outline standards, restrictions, and suggestions based on Wisconsin state business name guidelines.

  • The name of your Wisconsin limited liability company must be distinguishable from all others; none may be the same or deceptively similar.
  • Company names that use words that describe or convey the impression that the business is engaged in practices that it isn’t, such as using ‘insurance’ in the name while it isn’t an insurance company—unless the name makes it clear that it isn’t.
  • Avoid unimportant words (the, and, of), including numbers and letters (unless using acronyms). Also, discard generic verbiage (corporation, incorporated, company, etc.) or their abbreviations.

wisconsin-llc-name-search

Legal considerations when naming your Wisconsin LLC

Using a name that is too similar to the one used by your competitors, that company may accuse you of a trademark violation; you might get forced to adopt a different name and may even have to pay monetary damages. Part of our complete company formation package includes, at no additional cost, our attorneys helping you find and choose a name that avoids any potential legal penalties. Unlike many Wisconsin LLC formation services, we provide you with legal counsel and advice from our in-house business attorneys.

WISCONSIN FICTITIOUS NAME REGISTRATION – DBA IN WISCONSIN

A Wisconsin fictitious name registration or DBA in Wisconsin (doing business as) may highlight the services or products you offer and include the locations you service. Registering a fictitious name in Wisconsin is valuable for companies. The company may permanently use its name. However, if it wishes to use any other, it must file a Wisconsin fictitious name registration. Once you have your Wisconsin fictitious name registered, you can use your localized DBA in Wisconsin name in your advertising copy.

What you need to know about a Wisconsin Fictitious Name Registration

You can use your localized Wisconsin DBA on print and online ads, billboards, bus stops, etc. If a business does not comply with the Wisconsin laws on fictitious or DBA name registrations, the results may be unfavorable in a court of law.

Expiration of a Wisconsin Fictitious Name Registration

If you have a Wisconsin fictitious name registration now, consider that it will be effective for a lifespan of five years—expiring on December 31st of the fifth year.

Call (800) 603-3900 to register your fictitious name over the phone or online at: AmeriLawyer.com

Form your LLC and get a FREE Wisconsin LLC lookup to ensure name availability

When you form an LLC with Spiegel & Utrera, P.A., you get so much more for your money and time:

  • A completed corporate kit that includes all legally required documents, seal, and book
  • Legal and business counsel from experienced in-house attorneys
  • Free WI LLC lookup or preliminary name search
  • 110% lowest price guarantee

Building In Financial Forecasts For Your Business Plan

Building In Financial Forecasts For Your Business Plan published on

To attract investors and build a line of credit you need to project business finances

Essentially, you must make educated guesses about how much money will be spent and how much will be taken in. Then you can use these estimates to calculate whether your business will be sufficiently profitable to sustain a bottom line. Usually a business will start off operating lean until you start building a customer base. If your projections show your business losing money initially, then you must consider raising prices or cutting costs while still in the planning stage. This can help you avoid sinking money into a business that cannot be profitable. On the other hand, if your business model shows profitability, then you can start to invest more and build your enterprise.

Business Plan

Understanding projected financial situation through estimates and calculations

Start off with a break-even analysis by estimating income and expenses over the first year. In theory you should be able to turn a profit by the end of the first year. If not, then you must reconsider the business model. After determining the business can turn a profit, then turn to a month-by-month projection of your business’s net profits for the first year. Keep in mind that some businesses will be more or less profitable during certain months due to seasonal turnover. Finally, determine a start-up cost estimate. There are few generic costs that are common to all business types, they include, research expenses, insurance, business license, incorporation costs, permit fees, equipment and supplies, advertising and promotion, borrowing costs, employee costs and technological expenses.  These costs should be included in your business plan to give a true picture of how much money you will need to get off the ground.

 

 

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service,Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Funding Your Small Business: Consider Crowdfunding

Funding Your Small Business: Consider Crowdfunding published on

The recession of 2008-2009 made it increasingly difficult to obtain a small business loan. Most lenders want to see an existing financial record that reassures them you will be able to repay the loan. Remember that banks are lenders. They are not investors and they’re not interested in making equity investments in businesses. What is an entrepreneur to do? Most entrepreneurs start their small business with personal savings, credit cards, and personal loans from family and friends.

Crowdfunding

An alternative that is popular with entrepreneurs is Crowdfunding through websites such as Kickstarter and Indiegogo. Crowdfunding essentially utilizes other backers to finance your product or business. To date, Kickstarter startups have raised over $2,500,000,000 and Indiegogo has funded over $800,000,000.

There are several reasons why crowdfunding may be the answer to financing your business. In an economy where e-commerce allows us to easily make online purchases with the click of the mouse, many consumers still crave more personal connections and are opting for small startups. Investors are always eager to be a part of a startup’s success. Additionally, entrepreneurs who can’t qualify for a bank loan or have decided the risks associated with obtaining a bank loan far outweigh the benefits can pursue crowdfunding without worrying about risks.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Keep Shareholders Happy & Avoid Lawsuits

Keep Shareholders Happy & Avoid Lawsuits published on

Tesla Motors, Inc. (“Tesla”) is a publicly traded company on the NASDAQ. Tesla develops, designs, manufactures, and offers for sale fully electric performance vehicles and advanced power-train components for electric vehicles. Although Tesla was founded here in the United Sates, it now has more remote locations and delivers its cars to consumers all over the world. Tesla has enjoyed great success recently. Tesla’s stock has made early shareholders of the company very happy.

Tesla

Nevertheless, several U.S. law firms attempted to bring class-action shareholder derivative claims when reports of Tesla vehicles catching fire after accidents emerged, which caused a temporary sell-off of Tesla’s stock. The lawsuits claimed that Tesla violated SEC disclosure rules by failing to disclose to shareholders that the vehicle had safety issues. However, the lawsuits did not move forward because shareholders rejected the formation of the shareholder class. Shareholders claimed that they did not need the protection of a class-action lawsuit because they did not believe that the vehicle has a design defect that makes it prone to fires. This illustrates that although shareholder derivative claims are a valid concern for any publicly traded company, an excellent way to defend your business against such lawsuits is to keep your shareholders happy through outstanding financial performance.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Two Ways Your Business Can Raise Money

Two Ways Your Business Can Raise Money published on

There are several ways that businesses can raise money. Some are very well known while others are not as familiar to business owners. Below are two ways your business can raise money that may be unfamiliar:

Raise Money

1. ROBS Programs on a 401(k): Rollovers as Business Startups (ROBS) are programs tat allow a business owner to take tax-deferred retirement funds and use them to start or buy a business without early withdrawal penalties. Do be careful as these programs have a very complex rules provided by the IRS and if not handled correctly could result in penalties and other issues.

2. Vendors: If you are a good customer you could ask a vendor if he or she offers any extended repayment terms. Vendors may have their own financing programs or terms. “Pay on scan” could be one option, where the supplier is paid for the inventory only when it is sold to a customer. There are many costs that can be eliminated to allow your business to operate more efficiently and save money.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service,Trademarks,Copyrights,Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

If You Are Looking To Buy Or Sell A Business, Seller Financing Is Key To Success

If You Are Looking To Buy Or Sell A Business, Seller Financing Is Key To Success published on

With the changing state of the economy it is becoming harder and harder for entrepreneurs to acquire loans for buying or selling a business. However, this can be easily solved through Seller Financing. Essentially, the seller will be paid for the business over time instead of one lump sum. In turn the seller can protect himself by assuming ownership if the buyer misses payment.

Seller Financing

Additional seller protection can be achieved by securing a loan against the business’s hard assets, a mortgage on the buyer’s home along with personal guarantee signed by the buyer and the buyer’s spouse. Safety when selling a business can only be accomplished through carefully drafted agreements and proper documentation.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have questions about SBA 504 Loans, call (800) 734-9900 orclubassist@amerilawyer.comfor assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights,Estate Planning, Legal Counsel, Wills, Trusts, Agreements & Leases, Corporate & Company

Small Business Loans, SBA 504 Loans

Small Business Loans, SBA 504 Loans published on

If you have a small business, you could obtain a small business loan with lower interest and with payment terms of up to 10 to 20 years. The Small Business Administration, (SBA) will cover 40 percent of the project costs, the maximum limits are over $5 million.

small-business-loan-application-557x217

These 504 loans have to be for certain types of business; they cannot be speculative businesses by nature such as real estate investment. However, a vast majority of businesses are eligible, such as franchises, recreational facilities and clubs, farms and agriculture businesses, fishing vessels, medical facilities, etc. Proceeds from the loan can be used for financing of fixed assets, purchase of equipment, acquiring new facilities, updating existing locations. It is all about helping small business get to the next level.These 504 loans do not come directly from the SBA, but are rather provided by local Certified Development Companies which are nonprofits. The business is expected to contribute 10% to the project.

It’s a good idea to have a business plan and to have someone assist you to navigate through the government bureaucracy. These loans are meant to help small businesses, and you should allow our law firm to assist you in seeing if it is something you can benefit from.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have questions about SBA 504 Loans, call (800) 734-9900 orclubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights,Estate Planning, Legal Counsel, Wills, Trusts, Agreements & Leases, Corporate & Company

How Much Of Your PPM Is Mere Opinion

How Much Of Your PPM Is Mere Opinion published on

A recent ruling by the Supreme Court may make businesses think twice about what to add to Private Placement Memorandum when trying to raise new working capital. The Court addressed the use of opinion statements in PPMs as investors rely on the information presented when deciding whether to make an investment. As Congress specifically confronted the issue at the time of passing the pertinent securities law, the Court has further tackled the same by looking at the over-reliance of opinion in the PPM.

The Court did not want the business to get around the requirement of having correct, factual information in the PPM by attempting to simply make all statements a matter of opinion. Also, the Court looked at the omission of fact when including the opinion that would otherwise make the opinion misleading such as leaving out potential risks in the venture to make the worthiness of the investment seem much more lucrative.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights,Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

IdentityTheft.Gov Upgraded To Better Assist Identity Theft Victims

IdentityTheft.Gov Upgraded To Better Assist Identity Theft Victims published on

The Federal Trade Commission’s www.IdentityTheft.gov website has been updated making it easier for consumers to start the process of regaining their identity. The website has many tools that allow identity theft victims to alert law enforcement, the credit bureaus, and the IRS, as well as other necessary parties. The website will also allow victims to file a complaint with the FTC on the same site.

Identity theft2

The website, using the information entered, will create a recovery plan based on the information that the consumer provides. This website, which can also be viewed on mobile devices, should be a great help to many victims of identity theft with the ever increasing use of mobile devices as well as other devices to make purchases as well as store and provide our information for various services and products.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

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