Starting a new business is a major undertaking. In Pennsylvania, you’ll need to work with the Bureau of Corporations and Charitable Organizations of the Department of State to form a new corporation. All those who want to do business in the Keystone State must file applications and other documentation with the Secretary of the Commonwealth.
A corporation is a complex business structure. Pennsylvania allows the registration of business, professional, and nonprofit corporations. Check out our comprehensive guide below to help you get started on the path to business success.
How do I form a corporation in Pennsylvania?
Steps to Incorporate in Pennsylvania:
- Name Your Corporation
- Appoint Directors
- Choose a Pennsylvania Registered Office
- File the Pennsylvania Articles of Incorporation and Docketing Statement
- Create Corporate Bylaws
- Draft a Shareholder Agreement
- Issue Shares of Stock
- Apply for Necessary Business Permits or Licenses
- File for an EIN and Review Tax Requirements
- Submit Your Corporation’s First Report
To start a corporation in Pennsylvania, you must file the Articles of Incorporation and a Docketing Statement form with the Bureau of Corporations and Charitable Organizations of the Department of State.
Many documents can be filed online through Pennsylvania’s online business document filing system that is accessed through Keystone Login. Regular processing takes seven to 10 business days, after which your completed documents will be returned via email. There are many steps to take before and after legally registering your corporation with the state. To simplify the process of forming a corporation in Pennsylvania, we’ve put together 10 easy steps to form your business:
Step 1: Name Your Corporation
Naming your corporation is an important first step. After deciding on a name, you must ensure it’s available to register in Pennsylvania. The name can’t be the same as any other association’s name on record with the commonwealth. Pennsylvania law states the following about naming a corporation:
- The name of a business corporation must contain the word “Corporation,” “Company,” “Incorporated,” “Limited,” or an abbreviation of any of these words. It could also contain the word “Association,” “Fund,” or “Syndicate.” The name can’t contain “Limited Liability Company” or any abbreviation of this term.
- The name of a professional corporation may contain the word “Associates.” It may also contain the name of one or more of the present, prospective, or former shareholders.
- The name of a nonprofit corporation may but isn’t required to contain the word “Corporation,” “Company,” “Incorporated,” “Limited,” an abbreviation of any of these terms, “Association,” “Fund,” “Syndicate,” or words or abbreviations of like import.
- Corporation names can’t have any words, phrases, or abbreviations prohibited or restricted by statute or regulation. Approval to use restricted items may be granted by a government agency, board, or commission depending on the situation.
To see if the name is available, conduct an online name availability search by entering a partial or complete name into the business entity search engine. Be sure to choose the “corporate name availability” option from the type of search dropdown menu. You can also call the Bureau of Corporations at 717-787-1057 to verify name availability or submit a written request to:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
There is a $15 search fee for written requests, and you can only list up to three names per request. You should also conduct a domain name search to see how the name can be used as a website address. Reserving your corporation name and a domain name is necessary if you want to reserve your rights to their usage. ZenBusiness can help you with reserving a corporation and domain name.
A name reservation form can be filed with the commonwealth online or by mail for $70. If the name is available at the time of filing, it will be reserved for 120 days. If you haven’t registered your corporation with the commonwealth after this period, you can apply to reserve the name again for a further 120 days.
A fictitious name, or “doing business as” (DBA) name, is an assumed name under which you plan to do business other than your corporation’s legal name. According to the Fictitious Names Act, you must register a fictitious name with the Pennsylvania Department of State for $70. This registration establishes the identity of business owners; however, it doesn’t give owners exclusive rights to the name.
If your fictitious name registration lists one or more individuals with an interest in the business, you must fulfill the following advertising requirements:
- You must officially publish notices that your business has filed or intends to file an application for registration of a fictitious name.
- The advertisement must be placed in two newspapers in the county where your business will be located. The newspapers must have general circulation, and one must be a legal newspaper.
A trademark is used to identify your company’s goods and set them apart from the competition. A service mark is similar but represents services instead of goods. These marks can be any word, name, symbol, or any combination of such. Before using or registering a mark, you’ll need to search the commonwealth records and United States Patent and Trademark Office (USPTO) database to determine availability.
Pennsylvania trademark registration costs $50 and is valid for five years, after which you’ll need to file a renewal. Federal registration is valid for 10 years and costs $225 or $275 per class of goods or services. It’s usually easier to register a trademark with the state, but federal registration offers broader protection. This step is important when expanding your business outside of the state.
Step 2: Appoint Directors
A corporation is a business organization with rights, privileges, and responsibilities. Those who form a corporation are known as incorporators. In Pennsylvania, you can have one or more incorporators. They appoint directors who form a board whose job it is to manage the corporation. A director can be an incorporator but doesn’t have to be.
Incorporators elect the company’s initial directors at an organizational meeting before filing the Articles of Incorporation with the commonwealth. This meeting is also when you’ll create and approve corporate bylaws, determine your share structure, and execute an incorporator’s statement.
Pennsylvania law requires a business corporation to have at least one director to manage its business affairs. Provide details within your articles or bylaws for how directors will be elected, removed, or succeeded.
Step 3: Choose a Pennsylvania Registered Office
A registered office — commonly referred to as a registered agent in other states — is a person or provider that receives service of process and other legal correspondence for your company. Unlike other states, Pennsylvania doesn’t use registered agent services for corporations. Instead, legal documents are sent to your corporation’s registered office address as recorded on your Articles of Incorporation.
When you form a Pennsylvania corporation, you’re required to provide the state with a registered office address. If your corporation doesn’t have a physical location or mailing address in the commonwealth, you must choose a commercial registered office provider and list them on your articles instead. You can also choose this option if you would rather not receive legal notices at your place of business or if you aren’t available to receive them during regular business hours.
Step 4: File the Pennsylvania Articles of Incorporation and Docketing Statement
The Articles of Incorporation, also known as a Certificate of Incorporation in other states, is a document that legally forms your corporation. Each state has its own articles forms and filing requirements. You’ll probably want to form your corporation in the state that will be considered the “home base” for your business operations.
You may also want to consider business and tax perks. These incentives vary by state and can offer many benefits depending on your type of business. How much it costs to form a corporation varies by state, so that’s something else to consider when deciding where to start a business.
To file the Pennsylvania Articles of Incorporation, you’ll need:
- The name of the corporation that follows all naming laws
- The corporation’s proposed registered office or the name of the corporation’s commercial registered office provider
- The name and address of each incorporator
- The specified future effective date, if any
- Additional provisions, if any
- Signatures of all incorporators
- The number of shares the corporation is authorized to issue
Authorized shares are how many shares of stock the corporation can issue once it’s formed. Shares can be issued only once, but they can be sold and traded. Those who own or are given shares are known as shareholders. If you plan to issue more than one kind of share, you’ll need to add additional provisions to your Pennsylvania Articles of Incorporation.
Shares are used to gain investment money needed to start and grow your business. They can also be given to initial investors to reward them, as they’ll receive returns on their investment through dividends. You’ll learn more about issuing stocks in step seven.
The Articles of Incorporation form is filed with the Department of State for $125. You can do so online through the Keystone Login website or use an application. Veteran- or reservist-owned small businesses are exempt from this fee when they provide proof of status.
New entities in Pennsylvania must also file a Docketing Statement with the articles. It includes the following information:
- Entity name
- Tax responsible party
- Description of business activity
- Employer Identification Number (EIN) or Federal Tax ID Number (FEIN)
- Tax year or fiscal year-end
The Internal Revenue Service (IRS) allows companies to be taxed according to a calendar or fiscal year, which means a period designated for accounting purposes and preparing financial statements. There is no fee for filing a Docketing Statement.
Pennsylvania has an advertising requirement that must be met when filing the articles. You must publish the intent to file or the actual filing of the Articles of Incorporation. The ads must run in two newspapers of general circulation. If possible, one newspaper should be a legal journal.
The ads must contain the name of the corporation and a statement that it is to be, or has been, organized under the provisions of the Business Corporation Law (BCL) of 1988. You should run the ads in the county where your business is located.
Request affidavits, or proofs of the advertising, will be sent to you after the ads have run. It isn’t required to file this documentation with the commonwealth; however, you should file them with the minutes of the corporation should anyone ever need to reference them.
Step 5: Create Corporate Bylaws
Corporate bylaws are rules and regulations governing the operation of your business. They are created and adopted by your board of directors. In Pennsylvania, you aren’t legally required to file bylaws; however, they are very important and useful. Bylaws ensure your business will be well run and regulated. Keep your bylaws filed with your company’s other business records.
Corporate bylaws usually include information like the:
- Name of the corporation and business address
- Purpose or mission of the corporation
- Names of incorporators, the board of directors, and officers
- Qualifications, elections, and the terms of directors and officers
- Committee operations (groups of board members with specific duties)
- Details about issuing stocks
- Shareholder meeting requirements
- Disclosure of conflicts of interest
- Procedures to amend bylaws
Step 6: Draft a Shareholder Agreement
A shareholder agreement outlines the rights and responsibilities of your corporation’s shareholders or those who own stock in your business. It’s a legal document used to ensure equality and protect shareholders. The agreement should include shareholder and director names and contact information. You should also consider including important details about:
- Voting rights
- Distributing dividends
- Selling or transferring shares
- Amending the agreement
- Resolving disputes
You can draft a shareholder agreement by using an online template. You don’t need to file one with the commonwealth, but a copy should be kept with your business records. If you don’t have a shareholder agreement, your company must abide by Pennsylvania corporation law.
Step 7: Issue Shares of Stock
As a corporation, you’re required to issue shares of stock as detailed in the Articles of Incorporation. How many and what kind you issue is up to you. Please note that you must record who owns shares and how many shares have been publicly or privately issued.
A private corporation issues private stocks, usually to company founders, employees, managers, or a private investor group. Not issuing public stock allows you to keep ownership of the business with private owners. There’s less risk of staying private and more freedom to choose your investors and your company’s focus.
Sometimes, private companies go public when they’re ready to grow. When corporations issue shares on the public market, it means anyone can buy them. This often results in companies gaining access to large amounts of cash, but it’s also risky and could lead to failure.
Remember that if you issue public shares, you must file quarterly statements with the U.S. Securities and Exchange Commission (SEC). To learn more about Pennsylvania regulations, contact the Department of Banking and Securities.
Step 8: Apply for Necessary Business Permits or Licenses
Business permits or licenses may be necessary for your corporation to operate legally in Pennsylvania. Unfortunately, there’s no one-stop shop for local, state, and federal permits and licenses. It may be worth it to hire a service to conduct research for you, so you can save time and meet all legal requirements.
The Bureau of Corporations in the state department doesn’t issue permits or licenses. They recommend that if you conduct a regulated professional activity that you apply for a license from that regulatory agency, commission, or board. Additional licensing requirements can be found by contacting your county, city, borough, or township office.
Step 9: File for an EIN and Review Tax Requirements
Before you file the Pennsylvania Articles of Incorporation and Docketing Statement, you need to apply for and have an EIN. An Employer Identification Number (EIN) is given to you by the Internal Revenue Service (IRS). It’s a unique tax ID number for your corporation. You use it to file your Docketing Statement, hire employees, open business bank accounts, and file taxes. An EIN is also known as a FEIN.
You can file for an EIN online for free. You can also complete the SS-4 form, mark it Attn: EIN Operation, and fax it to 855-641-6935. The form can also be mailed to the Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.
Let us take care of this step for you. As part of our business services package, we can help you secure an EIN.
Step 10: Submit Your Corporation’s First Report
A first, or initial report, is information you file with the commonwealth about your corporation. Business, nonprofit, and professional corporations must file this report. They are required to file a Statement of Summary of Record only once with the state but can file it again as needed. The statement includes the corporation’s current name and the following, as applicable:
- Address of the current registered office or the name of its commercial registered office provider
- The statute by or under which it was incorporated or formed
- The date that the corporation was formed and under which name
- Statement of how the company was incorporated or formed
- The date that the original Articles of Incorporation were recorded and where
- If the statement is being delivered to the Department of State with amended and restated Articles of Incorporation
- If the currently effective articles are filed or recorded, plus the Recorder of Deeds book and page numbers
- If the amended and restated articles for a professional corporation are attached
- If the corporation has never adopted any name other than its original and current name
- A list of any names by which the corporation was known, other than its original name and current name, plus the date on which each name change became effective
The Statement of Summary of Record can be mailed with a $70 fee to:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
How much does it cost to start a corporation in Pennsylvania?
It costs at least $175 to $744 to start a corporation in Pennsylvania. Most documents can be filed online, but you’ll need to pay for postage for those filed through the mail. Costs may include name reservation ($70), fictitious name registration ($70), state trademark registration ($50), federal trademark registration ($225), Articles of Incorporation filing ($175), corporate bylaws template ($35), commercial registered office provider ($49), and first report ($70).
Be sure to take into account other costs, such as permits, licenses, and annual reports. Benefit corporations, those formed to create a public benefit, must file an Annual Benefit Report for $70 each year. Nonprofit corporations are also required to file an annual report; however, there is no cost to do so.
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What are the benefits of a corporation in Pennsylvania?
There are many advantages to forming a corporation in the Keystone State. The benefits of forming a corporation include personal asset protection and recognition as an official business within and outside of the U.S. Shares of stock can also be issued, so you can raise the capital needed to start, run, and grow your business.
In addition, Pennsylvania offers a variety of business incentives, credits, and programs. The state provides these benefits to support business startups and promote job and economic growth. Tax credits, rebates, refunds, and other monetary assistance programs may be available if your corporation is eligible.
A disadvantage of forming a corporation is that it’s a complex business structure, especially when compared to a limited liability company (LLC). It involves more time, paperwork, and people to get it started and keep it running. Some corporations are also subject to double taxation, where you have to pay taxes twice on corporate income.
How is a Pennsylvania corporation taxed?
How your corporation is taxed in Pennsylvania depends on the type of corporation it is. For example, most nonprofit corporations are tax exempt. They can qualify for sales, property, and income tax exemption. Be aware that you’ll need to meet certain state and federal criteria to qualify.
S corporations and C corporations are subject to taxes in different ways. All corporations are considered C corporations unless they elect to be an S corporation. You choose how you want your corporation to be taxed by the IRS, and that is how the state will tax you too unless you file an exception.
An S corporation is treated as a partnership arrangement and offers pass-through taxation. In this care, shareholders pay taxes on corporate net income personally. S corporations have a limited number of shareholders. It helps you to avoid paying double taxation on income.
There are a variety of state taxes that will need to be paid, such as:
Special classes of corporations are also subject to other selective business taxes. It’s best to consult with a tax professional to make sure your corporation is filing for all the applicable local, state, and federal taxes.
Pennsylvania Corporation FAQs
- Does running a corporation in Pennsylvania involve more paperwork than running other types of businesses?
Yes, forming and running a corporation usually involves more paperwork than running other types of businesses. A corporation may have to regularly deal with reports, renewals, article amendments, meeting minutes, bylaws, shareholder agreements and communication, tax reports, and more.
- What is the difference between an LLC and a corporation in Pennsylvania?
An LLC is a limited liability company. It is a simple business structure that is quick and easy to form. It can be managed by members or managers and does not issue any stock. An LLC can be run in-state according to an Operating Agreement. On the other hand, corporations can do business in the state, country, and world. They’re a more complex business structure managed by elected officers and a board of directors who operate according to corporate bylaws. Corporations issue stocks and are responsible for ensuring profits for their shareholders.
- How do I change my corporation’s name in Pennsylvania?
- How many people are needed to form a corporation in Pennsylvania?
A single person can form a corporation in Pennsylvania.
- Can I form my Pennsylvania corporation online?
Yes. By using the PENN File online filing system, you can take care of all of your business filings, including initial registration.
- How do I dissolve my Pennsylvania corporation?
To dissolve your corporation, you will need to file the Articles of Dissolution with the Bureau of Corporations and Charitable Organizations of the Pennsylvania Department of State.
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