Pennsylvania Franchise Forms - Pennsylvania Franchise Law

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Pennsylvania Franchise Forms FAQ Pa Franchise Example

What is a franchise?

There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.

What is the legal relationship between a franchisor and franchisee?

Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.

What laws govern franchises?

There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.


What are Articles of Incorporation?

Articles of Incorporation are legal documents that establish a corporation as a separate entity from its owners. In Pennsylvania, these articles need to be filed with the Department of State to officially form a corporation. They generally include important details about the corporation, such as its name, purpose, registered office address, and the names and addresses of its founders or directors. By filing the articles, the corporation gains legal recognition and protection, and it becomes capable of engaging in various business activities.


What to Include in Articles of Incorporation

Articles of Incorporation in Pennsylvania are a set of documents that legally establish a corporation. When preparing these documents, it is important to include certain information. Firstly, the full and accurate name of the corporation must be provided. Additionally, the purpose of the corporation needs to be clearly stated, explaining the nature of the business it will conduct. It is also necessary to include the names and addresses of the individuals forming the corporation, known as the incorporates. Additionally, the registered office address and the name of the registered agent, who will receive legal and official documents on behalf of the corporation, must be provided. Furthermore, the total number of shares the corporation is authorized to issue needs to be stated. When all the required information is included, the Articles of Incorporation can be filed with the Pennsylvania Secretary of State to officially create the corporation.


1. Full Name of Corporation

The full name of the corporation is a legal and official business entity registered in the state of Pennsylvania. It operates and conducts its activities within the guidelines and regulations set by the state authorities. The corporation is recognized by its unique name, which represents its identity and distinguishes it from other businesses operating in Pennsylvania. It follows the laws and policies of the state and is responsible for fulfilling its obligations as a corporate entity.


2. Principal Place of Business

The Principal Place of Business is an important phrase used in Pennsylvania to determine the main location of a company's operations. It refers to the primary and central physical address of a business where key managerial activities take place. This address is where decisions are made, financial records are kept, and important meetings are held. In Pennsylvania, this concept helps establish the legal jurisdiction and tax implications for a company. It is crucial for businesses to accurately identify and maintain their Principal Place of Business to ensure compliance with state laws and regulations.


12. Limitation of Director’s Liability

In Pennsylvania, there are limitations on the liability of directors. This means that directors of a company cannot be held personally responsible for certain actions or decisions made on behalf of the company. This protection helps to encourage individuals to take on the role of being a director, as they can have some peace of mind knowing that they will not be held personally liable for the company's debts or legal issues. However, it is important to note that directors can still be held accountable if they engage in fraudulent activities or act in a way that goes against their fiduciary duties. Overall, the limitation of director's liability in Pennsylvania provides a level of protection for directors while also ensuring that they are still responsible for their actions.