Regardless of the nature of the business you plan to establish in Pennsylvania, you are going to run into areas where you face possible exposure to liability. Just how much it can hurt your personal assets when someone sues or files a judgment against your company will depend on the type of business structure you operate, with some business structures protecting your personal assets far better than others. At Huckabee, Weiler & Levengood, P.C., we understand the benefits and drawbacks associated with each type of business structure, and we have helped many people looking to create their own businesses determine which business type best suits their needs.
According to QuickBooks, if you are looking to minimize personal liability within your business, you may want to consider creating a limited liability company or an S corporation, as opposed to a sole proprietorship. Why? In a sole proprietorship, there is nothing acting as a shield between you and your business, meaning if someone sues you and your business cannot cover it, your personal assets may be at risk.
When you operate a limited liability company, you are essentially protecting yourself from personal liability, as long as you stay current on all compliance requirements and pay any necessary fees, if applicable. This business formation type is also relatively simple to create and operate, which is why it is a popular choice among many of today's small business owners.
Another option that can help reduce personal liability within your business involves establishing an S corporation. While this type of structure involves a bit more effort in terms of operations and compliance requirements, it also offers tax and other benefits. You can find out more about business formation by exploring our webpage.