How To Launch A Business In Philadelphia, Pennsylvania
How To Launch A Business in Philadelphia
The Pennsylvania Business One-Stop shop is a new resource for budding entrepreneurs and established businesses alike. This guide will take you step-by-step through the process of starting a business in Pennsylvania, including how to choose a name, what licenses are required, where to find support, and much more.
Set up a Philadelphia tax account
To start a business in Pennsylvania, you'll need to register it with the state. It's called "doing business," and it requires filing a form called DBA. But there are some things you'll need to know first.
First, you'll want to choose what type of business organization you're setting up. There are different types of businesses, each with their own advantages and disadvantages. For example, sole proprietorships don't require much paperwork because it's just one person running the show. A corporation requires more work, but you'll still save money since you won't pay taxes twice. And a partnership is great for small groups of people working together.
Once you've chosen your business structure, you'll need to file a document called a Business Entity Identification Number (BEIN). This tells the state how to identify your business. If you have employees, you'll need to provide an EIN. Otherwise, you can use your SSN. Either way, you'll need to obtain a Federal Tax ID number, which can be obtained online. Once you do that, you'll be ready to go.
Understand the taxes you'll have to report
There are more than a dozen different business taxes in Philadelphia, each with its own set of rules and requirements. And while most businesses don't pay many of them, those that do can end up spending thousands of dollars every year just to comply with the law. So how do you know what you're supposed to report and where? Here's everything you need to know about the city's business taxes.
How To Launch A Business In Philadelphia, PennsylvaniaGet a Philadelphia commercial activity license
Starting Jan. 1, 2018, businesses are required to pay the city’s business tax. Businesses that operate within the city limits are subject to the city’s commercial activity taxes, which include a gross receipts tax and a transaction privilege tax. To comply with the law, businesses must register with the Department of Licenses & Inspections.
The registration process requires filling out a form called Form A-9, which includes information about the type of business, the address where it operates, how many employees it employs and whether the business is incorporated. Once the form is completed, the business owner or manager must submit it to the department along with $10.
To learn more about the registration process, including what documents you need to provide, go here.
Determine your business structure
The first step you must take in establishing a business in Philadelphia is deciding whether it will be a sole proprietor, a partnership, a Corporation, or a Limited Liability Company (LLC). This decision affects how much tax you owe, how many employees you can hire, and how much revenue you can generate. You might want to consult a lawyer or accountants to help you make this important choice.
If you are unsure about what type of entity to choose, here is some advice from the IRS:
A Sole Proprietorship: A sole proprietorship is one where you are personally liable for paying taxes and filing returns. In addition, you cannot claim deductions on losses because there are no legal entities involved. However, you are generally free to deduct expenses against income earned; therefore, you can write off certain expenses such as rent, utilities, advertising, etc.
A Partnership: A partnership is similar to a sole proprietorship, except that each partner is legally responsible for paying taxes and filing his/her own return. Partnerships allow partners to file joint returns, but each partner still pays taxes individually. Partnerships are often used to form small businesses, including partnerships among friends or family members.
Corporation: Corporations are separate legal entities that exist apart from their owners. They can be formed for several reasons, including raising capital, avoiding personal liability, and protecting intellectual property. Many corporations are taxed differently than individuals, and they can pay dividends and issue stock.
Limited Liability Companies (LLCs): An LLC is a hybrid of a corporation and a partnership. Similar to corporations, LLCs can raise capital, protect intellectual property, and pay dividends. Like partnerships, LLCs are usually set up to avoid personal liability. Unlike corporations, however, LLCs are treated like partnerships for tax purposes. Therefore, LLCs are subject to self-employment payroll taxes, and pass through profits and losses to their individual owners.
Philadelphia Pennsylvania - Tag Cloud
trading as, t/a, credit, limited liability company, sole proprietorship, venture capitalist, employer identification number, llcs, doing business as, vc, credit card, upcounsel, small business, startups, ein, crowdfunding campaign, 501(c)(3), unemployment compensation insurance, northumberland, business insurance, corporation
Chamber of Commerce, Wikipedia
The Whistleblower Advocates
This content is made possible by The Whistleblower Advocates in Philadelphia.
The Whistleblower Advocates is a Philadelphia-based whistleblower law company. They help anyone who wants to report unlawful, fraudulent, or dishonest behavior by a person or organization. They routinely engage with whistleblowers in the healthcare, construction, mortgage, and other industries where fraud is committed against local, state, and civil governments, as well as environmental fraud. They are devoted whistleblower lawyer serving the Philadelphia area. Norristown, Plymouth Meeting, King of Prussia, Elkins Park, Wayne, Andalusia, Springfield, and Swarthmore are among the communities served by the legal firm.
They are located at 123 S Broad St #1670-B Philadelphia, PA 19109, and can be reached at (215) 402-2183.
Apply for zoning permits and licenses
The next step in starting a business is applying for zoning permits and licenses. This process varies depending on the type of business.
If you plan to open a retail store, restaurant, barbershop, beauty salon, or similar establishment, you must obtain a permit from the city's Office of Business Development. You'll pay a fee based on the square footage of space you want to lease or rent. If you don't know how much space you need, consult with the office about the amount of space you need to operate profitably.
You'll also need to file an application with the city's Office of Building Inspection. In addition to providing information about the intended use of the space, you'll need to provide a list of references and certifications, such as insurance policies and proof of workers' compensation coverage.
Once you've completed the forms, you'll submit them to the appropriate office. Once approved, you'll receive a certificate of occupancy, which allows you to begin operating.
If you plan on offering home repair services, you'll need to register with the state's Bureau of Consumer Protection. After registering, you'll need to complete a training program and pass a test administered by the bureau. Your registration will remain active for three years.
In some cases, you may be required to take additional steps, such as getting a building inspection or obtaining a food handler's license. Check with the city's Office Of Business Development or the local health department for specific requirements.
Report any changes to your business
The Department of Revenue requires businesses to report any changes to their information within 10 days of the change. This includes changes such as a partnership, location, phone number, mailing address, etc. Failure to comply could lead to fines up to $500 per violation. Businesses must submit Form DR-1, Change of Information, to the Department of Revenue.
Apply for zoning permits and licenses
The next step in starting a business is applying for zoning permits and licenses. This process varies depending on the type of business.
If you plan to open a retail store, restaurant, barbershop, beauty salon, or similar establishment, you must obtain a permit from the city's Office of Business Development. You'll pay a fee based on the square footage of space you want to lease or rent. If you don't know how much space you need, consult with the office about the amount of space you need to operate profitably.
You'll also need to file an application with the city's Office of Building Inspection. In addition to providing information about the intended use of the space, you'll need to provide a list of references and certifications, such as insurance policies and proof of workers' compensation coverage.
Once you've completed the forms, you'll submit them to the appropriate office. Once approved, you'll receive a certificate of occupancy, which allows you to begin operating.
If you plan on offering home repair services, you'll need to register with the state's Bureau of Consumer Protection. After registering, you'll need to complete a training program and pass a test administered by the bureau. Your registration will remain active for three years.
In some cases, you may be required to take additional steps, such as getting a building inspection or obtaining a food handler's license. Check with the city's Office Of Business Development or the local health department for specific requirements.
Expand Your Horizons
Pennsylvania offers many resources for entrepreneurs looking to start or expand their business. From free workshops hosted by local chambers of commerce to free training programs offered by area colleges and universities, there are plenty of opportunities to learn about growing your business. If you're interested in learning how to manage a successful business, check out our "Business Growth" course.
From Idea to Action
We know it can feel overwhelming to start planning your business. We understand how important it is to find the best path forward, and our team of experts are here to guide you every step of the way. Our Plan: From Idea to Action program helps small businesses navigate the process of developing a business plan. This comprehensive approach includes expert coaching, access to resources, support groups, and much more. You'll learn about marketing strategies, financing options, legal considerations, and more.
How do I start a small business in Philadelphia?
- Determine your company's structure.
- Obtain an Employer Identification Number.
- Obtain a City tax account number.
- Obtain a Commercial Activity License.
- Understand your city's business taxes.
- Any changes to your company should be reported.
Is Philadelphia a good place for business?
Philadelphia is one of the worst cities in the United States for doing business, with high taxes and onerous regulations. Most big cities confront comparable issues.
How much does it cost to get a business license in Philadelphia?
All business owners in Pennsylvania who are obliged to obtain a business license must pay licensing and application costs. A business license costs $125 in most cases, however additional fees may apply for organizations constituted as partnerships, corporations, or sole proprietorships.