We can help you to determine which legal entity is right for your business during a consultation, whether that would be a limited liability corporation, a limited partnership, or a corporation. We can file the necessary legal papers with the Pennsylvania Corporation Bureau, obtain a Federal Tax Identification Number (TIN) for your business separate from your own social security number, draft bylaws for a corporation or an operating agreement for an LLC, recommend an accountant if you do not have one, and advise you on your sales, unemployment and other special business tax obligations to the Pennsylvania Department of Revenue.
The single most important thing any business owner can do to protect personal assets from liability caused by the business is to form a Corporation or an LLC (Limited Liability Corporation). We can also help you form partnerships, usually in the form of a Limited Liability Partnership (LLP), which will protect the partners’ individual assets from partnership liability.
We can also advise you of your mandatory responsibility under Pennsylvania law to carry workers’ compensation insurance on your employees. This insurance coverage is extremely important, because the failure to have it exposes the business owner to personal criminal penalties and direct personal liability for medical costs and Workers’ Compensation payments in the event an employee is injured and the business owner is uninsured.
Under the Workers’ Compensation Act, if an employee is injured on the job, the insurance will pay for both medical and rehabilitation costs and for unemployment compensation payments directly to the injured employee for as long as a Workers’ Compensation Judge determines the employee is still injured. There is no additional cost to the employer (aside from paying the policy premiums). However, if you do not have workers’ compensation insurance and an employee is injured on the job, you as the uninsured employer must pay all of the employee’s medical, rehabilitation, and any workers’ compensation payments as determined by a Workers’ Compensation Judge.
The registration of a fictitious name or designating your business “doing business as” (“d/b/a”) does not under any circumstances shield your personal assets from liabilities of the business. It is only by forming a business entity independent from yourself and carrying adequate business liability insurance that you can protect your personal assets from liabilities of your business.