Despite what some websites would have you believe, properly forming a new business is not as simple as filling out a few forms online. In order to form any new business – and particularly one in a regulated industry such as medical marijuana – you need to thoughtfully and carefully prepare a comprehensive set of documents that are custom-tailored to your unique business plan, business arrangement, and business goals.
At The Slocum Firm, we assist clients ranging from first-time entrepreneurs to large, established companies in all aspects of the business formation process. From choosing the type of entity that best fits your needs to negotiating funding documents and obtaining business licenses, we can represent you every step of the way.
Choice of Entity
Generally speaking, the process of forming a new business in Pennsylvania starts with choosing a form of business entity. There are several options available, and making a decision requires a careful assessment of the tax, funding, liability, and other implications involved with each entity type. At The Slocum Firm, we can help you make an informed decision about your choice of entity, and we regularly represent clients in forming:
- Sole proprietorships
- General partnerships
- Limited Partnerships
- Limited Liability Partnerships (LLPs)
- Limited Liability Companies (LLCs)
- C-Corporations and S-Corporations
The Process of Forming a New Partnership, Corporation, or LLC
There are several steps involved in forming a partnership, corporation, or LLC in Pennsylvania. The following is a general overview of the process once you have decided on the entity structure for your organization:
- Complete and file the necessary forms with the Pennsylvania Department of State. Depending on your choice of entity and the name you intend to use for your business, these may include: Articles of Organization, Articles of Incorporation, a Certificate of Limited Partnership, a Docketing Statement, and a Registration of Fictitious Name.
- Protect your company’s trademark. This may include filing for trademark registration with the Pennsylvania Department of State and/or the U.S. Patent and Trademark Office.
- Prepare your company’s organizational documents. These, too, will depend on the type of entity you choose, and may include the following: Membership Agreement, Partnership Agreement, Shareholder Agreement, Stock Certificates, Subscription Agreements, bylaws, resolutions, meeting minutes, and more.
- Apply for an Employer Identification Number (EIN). Your company’s EIN is similar to your personal Social Security number, and it is a requirement to file your taxes, hire employees, open a bank account, and perform various other company-level functions.
- Establish a bank account and apply for company credit. You will need to keep your new company’s funds separate from your personal accounts. This means opening a business bank account in the name of the new organization. While you may not need it now, it is worth considering filing a credit application now as well – but be careful to avoid granting a personal guaranty.
- Prepare and negotiate the key contracts for your company’s operations. Depending on the nature of your business, you may need a real estate lease, client or customer contract, vendor contracts, and various other forms of standard agreements.
- Consider your new company’s insurance needs. Securing appropriate insurance coverage is a critical first step as well. Things can (and do) go wrong from day one, and you want to make sure that you and your company are adequately protected.
- File for any necessary business licenses and permits. Many businesses in Pennsylvania, including medical marijuana organizations, must obtain various licenses and permits before they can lawfully open for business. Ideally, you will have researched your business’s license and permit requirements already, so you will know what to expect during this phase of the process.
- Docket your annual and renewal deadlines. Finally, businesses in Pennsylvania must comply with a number of reporting and record keeping requirements. Once your company is formed, you should make sure you know the deadlines for your Corporate Tax Report, license and trademark renewals, and any other filings you will need to make in order to keep your company in good standing.
Special Considerations for Medical Marijuana Organizations in Pennsylvania
With the passage of the Medical Marijuana Act in April 2016, Pennsylvania welcomed the medical marijuana industry within its borders. If you are seeking to establish or invest in a medical marijuana organization in Pennsylvania, you can now do so – provided that you comply with the Medical Marijuana Act’s complex and onerous requirements. At The Slocum Firm, we have been tracking the Medical Marijuana Act since its introduction as Senate Bill 3, and we can assist you in establishing, investing in, and maintaining a compliant medical marijuana business or healthcare practice under the law.
Speak with an Attorney at The Slocum Firm in Scranton, PA
For more information about establishing a new business in Pennsylvania, we invite you to contact us for an initial consultation. To speak with an experienced business law attorney at The Slocum Firm about your needs, please contact us online or call (877) 410-2341 today.