As someone who has recently started my own software consultancy, I hear from people who are curious about getting started in business for themselves. I thought I’d jot down my own experiences. This post is not strictly software-related, but it’s about the business of software, so I thought I’d post it here for anyone who might find it helpful.
DISCLAIMER: I am not a lawyer or an accountant. Consult one or both of the above before making business decisions.
When I was first getting started with the process I thought I’d need to do lots of reading and getting advice from others. But it turns out the process is dirt-simple and the actual paperwork takes about ten minutes. The steps are spelled out in this article, but here’s the gist:
- Pick a name. Make sure it’s unique, and tack “LLC” or “limited” or something along those lines on the end.
- Fill out a Certificate of Organization. Line out the bits that don’t apply.
- Fill out a Docketing Statement.
- Send the certificate and the docketing statement, along with a check, to the PA Dept. of State.
- Wait a week or two to get your approval in the mail.
All the relevant forms are linked from this article. And before you let the paper work scare you, here’s the paperwork I had to fill out, in its entirety:
You might also want to register for an EIN, but I don’t think that’s strictly necessary for a sole-proprietor LLC.
More helpful info for PA entrepreneurs can be found at PA Open for Business.
Is an LLC the right choice?
After taking care of all that I later discovered that, according to my accountant, LLCs in PA actually afford very little liability protection. And that depending on your situation, other setups, such as an S-Corp, may have tax advantages over an LLC. As a result I recently completed re-categorizing my company as an S-Corp. For anyone considering going into business for themselves, I highly recommend having a sit-down with a well-recommended accountant.
I hope someone finds this helpful!