Under Pennsylvania law, a business may incorporate. If it chooses to do so, it is thereafter identified as its own legal entity. As a separate entity from the owners, the business is then considered to be functioning on its own when it buys and sells property, assents to contracts and exercises legal rights. To incorporate in Pennsylvania, a business must file with the Secretary of State in compliance with certain guidelines.

Benefits of Incorporation in Pennsylvania

A corporation enjoys advantages that unincorporated companies do not. Primarily, it cannot be held accountable for an amount of debt greater than the value of the assets that the owners have invested in it. Without incorporation, the personal property of business owners is at stake should the company become unable to fulfill its debts. A corporation might also find it easier to finance itself through loans, allowing creditors in the Hershey area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. Finally, a corporations charter requires that ownership be divided into stakes or "shares" of stock, all of equal size. This makes the process of transferring control much more practical.

Costs of Incorporation

There are costs associated with incorporation, both short and long term. First, businesses in Pennsylvania might be charged a fee to incorporate. Also, a corporation is taxed as its own entity. The individual incomes of the owners are still taxed also, and this can mean the same income is taxed twice, known as double taxation. With proper planning and assistance from a local Hershey lawyer, you can avoid this disadvantage.