It takes a lot of preparation to start a business. You will need to study and research your niche of the market, create a solid business plan, and potentially hire a staff and lease office space. In the early stages of planning out your entrepreneurial vision, you should also think about how you want to structure your business. There are several different pathways for doing this, including limited liability companies, S-corps, C-corps, sole proprietorships, and more. There are also what are known as limited liability partnerships, or LLPs. At this juncture, you may be asking yourself, “Can any business form an LLP in Philadelphia?”
Philadelphia is one of the largest cities on the east coast. Known as the City of Brotherly Love, in a way it is a fitting spiritual home for business partnerships. If you are curious about the process of forming an LLP and whether or not it is a fit for your line of work, read on to learn more.
What Does a Limited Liability Partnership Do?
It makes a lot of sense to go into business with one or more partners. One of the biggest impediments that prevents individuals from starting their own businesses is simply the fear of failure. It is understandable to be put off by the risk–chances are, you are putting your life’s savings into getting something off the ground that may not be a sure thing. By working with a partner, you can mitigate some of that risk. By sharing responsibilities and splitting some of your initial capital, you may not only achieve peace of mind–you may also better position your business to thrive.
A limited liability partnership can be considered as an evolved version of a general partnership. In a general partnership, two or more individuals have agreed to go into business together. In creating an LLP, an additional layer of legality is added to the arrangement. Similar to an LLC, an LLP establishes the concept of limited liability. In this scenario, partners cannot be found liable for lawsuits or debts incurred by another partner. In other words, it is possible for one partner to be found liable, but for others to not be.
This liability provision makes sense for certain lines of work. For example, doctors and attorneys typically form LLPs because they provide a professional service. If, say, one doctor in a partnership is found liable for malpractice, their actions will not necessarily sink the entire business.
Can Any Business Form an LLP In Philadelphia? Yes They Can
So, what businesses are eligible for creating an LLP? In short, any business can go this route, but a limited liability partnership suits some industries more than others. Most commonly, an LLP is used for accounting firms, legal practices, doctors and dentists, and architecture firms. As mentioned previously in this article, the liability provisions for this business structure make the most sense for professionals who provide a service.
How then, would you go about forming an LLP? Well, the first step would be to select a name. You will want to choose a name that is completely unique to your business. You can do this by searching through the Pennsylvania Secretary of State’s business database to check on your desired name’s availability.
Then, you will want to complete a Statement of Registration as an LLP and file it with the Pennsylvania Department of State. You can do this by sourcing the appropriate forms, filling them out, and getting them in the mail. You will also want to contact the Internal Revenue Service (IRS) to create an Employer Identification Number (EIN). Your EIN will be compulsory provided you will have employees besides yourself.
Once you have taken care of the necessary paperwork matters, you can go about establishing your day-to-day business operations. It may be helpful to create a formal partnership agreement so that individual roles and responsibilities are clearly defined. You may also find it prudent to consult with a tax attorney about your business’s financial structure.
Submit Your LLP Registration Form Today with Our Help
Are you and your partner ready to dive into your own business? If so, you probably have a fairly long to-do list. Why not free up some time by working with us at the Corporation Center? We are a private service that specializes in helping business owners complete their registration documents with the appropriate state office. By eliminating the need to find, download, print, and sign paperwork by hand, you can get precious time back in your day. Not to mention, working with our web portal means eliminating the headache of going to the post office.
Take a few moments to browse our site. We offer easy-to-complete online forms for business registrations in all 50 states. To learn more about how we can help you, contact us today.