Want to launch your new company as a limited liability company (LLC)? Pennsylvania entrepreneurs frequently choose this business structure because it offers flexibility and protection of personal assets.
To form a Pennsylvania LLC, you need to follow a specific process. When completing these steps, it’s important to be accurate and thorough. After all, you want to start your business off on the right foot and remain compliant.
We know starting an LLC in Pennsylvania may seem more scary than yelling “Go Giants!” at an Eagles home game. But that’s why we’re here to help! Keep reading to discover a step-by-step guide to forming an LLC in the Keystone state.
Along the way, we’ll also explore how our services help you cut through the red tape, so you can focus on what you do best: running your exciting new business venture.
The reason so many new business owners choose an LLC as their business structure is because it offers flexibility and liability protection. This formation type separates a business owner’s personal assets from the company’s assets. Members (which are what LLC owners are called) can also choose between a member-managed and manager-managed operating structure.
To form a Pennsylvania LLC, you’ll need to register your business with the state. That means filing formation paperwork with the Pennsylvania Department of State (typically referred to as the Secretary of State’s office in other states). This formation paperwork is called a Certificate of Organization. In Pennsylvania, your Certificate of Organization needs to be accompanied by a New Entity Docketing Statement.
Before filing your documents, however, you’ll need to name your limited liability company and appoint a registered agent.
Once your formation paperwork is filed, you need to create an operating agreement and obtain an EIN. These steps designate how your business will be managed and set your company up as a legal entity in the eyes of the Internal Revenue Service (IRS).
Below, we’ll show you how to start a Pennsylvania LLC in 5 steps. We’ll also cover a few pro tips to help you set your LLC up for success.
Note: These guidelines are for forming a domestic LLC in PA. A domestic LLC is a company formed in the same state as the one in which you reside. If you live in a different state but want to form your LLC in Pennsylvania, you’ll need to register a foreign LLC (which will require different steps and fees).
The first step in forming a Pennsylvania LLC is to name your business. This is a crucial decision as your business name is the public’s first impression of your company. It should accurately reflect your brand image.
When naming your Pennsylvania LLC, you must adhere to certain rules:
Prioritize confirming the availability of your desired business name. Utilize our Pennsylvania business search page for this. Following confirmation, register the name as part of your business formation documents.
If your business operates under a name different from its registered LLC name, consider applying for a fictitious business name (FBN) or “doing business as” (DBA). To conduct business under an assumed or fictitious name, you’ll need to file a Registration of Fictitious Business Name form (DSCB:54-311) with the Pennsylvania Department of State.
To safeguard your business name or logo, you might consider trademarking them. This involves checking availability and filing the appropriate forms with either the Pennsylvania Department of State or the USPTO for broader protection.
In today’s digital age, having an online presence is essential. Ensure your LLC name is available as a domain and consider securing relevant social media handles to enhance brand consistency and recognition.
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The next step for starting your LLC is to designate a Pennsylvania registered office. In most states, this is known as a registered agent. Your registered agent is an individual or business entity that receives legal notices on behalf of your business.
Every Pennsylvania LLC is required to appoint a registered agent. Your Pennsylvania registered agent must:
A registered agent’s responsibilities include:
Legally, you are allowed to serve as your own registered agent. However, there are a few reasons why this isn’t the best idea.
For starters, you’re busy running your business. Having to be available during all regular hours to receive legal notices would be quite inconvenient for a business owner.
Secondly, you could be embarrassed in front of clients, investors, or colleagues when being served with subpoenas or notifications of a lawsuit in front of them. For these reasons and others, many LLC owners opt to hire professional services instead.
By using a registered agent service, you can free yourself up to focus on running your business. The benefits of using professional services for your registered agent service include:
A professional registered agent service can go a long way toward giving you peace of mind and keep your Pennsylvania LLC compliant with the state’s registered agent requirement.
One of the most important steps to forming your LLC is to file a Pennsylvania Certificate of Organization. This document (also referred to as Articles of Organization in other states) registers your business with the state of Pennsylvania.
Filing such important documentation for your business can be intimidating. Our business formation plans exist to handle the filing for you, and make sure everything is done accurately and efficiently. However, we’ll also walk you through the process below.
You’ll file your Certificate of Organization (Form DSCB: 15-8821) via the Pennsylvania Department of State. After filling in all of the required info, you can submit the form via mail or online along with your $125 filing fee.
To file your Certificate of Organization by mail, or if your specific situation requires it, you can send the completed form along with the filing fee to the Pennsylvania Department of State. The mailing address for the Department of State is:
Pennsylvania Department of State Corporation Bureau
401 North Street, Room 206
Harrisburg, PA 17120
Ensure that your envelope contains all the necessary documents, including the New Entity Docketing Statement and the appropriate payment for the filing fee.
When filling out your Certificate of Organization, you will need to include:
Along with your Pennsylvania Certificate of Organization, you are also required to submit a New Entity Docketing Statement (Form DSCB: 15-134A). This form should include:
If you need to make changes to your Certificate of Organization after it’s filed, you will need to file a Pennsylvania Certificate of Amendment. Include all of the required information in this form, along with the changes that need to be made, and then submit the form and your amendment filing fee. Need some help? Use our amendment filing services to handle the process quickly and easily.
Next, you will need to create a Pennsylvania operating agreement. While an operating agreement is not required by Pennsylvania law, it is crucial in determining how your LLC will be managed and run.
Your operating agreement also helps you to avoid disputes among members by outlining things like allocation of responsibilities and assets.
The benefits of an operating agreement are vast. By laying out all the details about how your company will be run, you can:
Your operating agreement should include all the pertinent details regarding management of your LLC, such as:
Figuring out what all you need to include in an operating agreement can be overwhelming. That’s why we created a comprehensive, easy-to-use operating agreement template. You can use our template to fill out all the information you need to provide, and rest assured nothing falls through the cracks.
If you are the only owner of your LLC, your business is called a single-member LLC. In this case, you may wonder if you even need an operating agreement.
The short answer is that it’s still a good idea. That’s because this internal document does more than lay out allocation of responsibilities and assets among owners. Your operating agreement also dictates what will happen in the event the owner passes away, and rules for adding new members.
Furthermore, your operating agreement can give you a leg to stand on in legal disputes. By showing the courts that you’ve taken the time to draw up a legal document as an LLC, your company will look more like an official business than a sole proprietorship.
In order to pay taxes for your LLC, you will need a Employer Identification Number, or EIN. Much like a Social Security Number (SSN) does for individuals, your FEIN identifies your LLC in with the Internal Revenue Service (IRS). This is sometimes also referred to as a Federal Employer Identification Number, or FEIN.
An EIN isn’t just needed for paying business taxes, either. You will also likely need one to conduct other types of business, such as opening a business bank account. Use our EIN services to obtain an EIN for your business today.
Depending on your specific business activities, your LLC may need to report things like sales and use tax or employer withholding. In order to register your LLC for state tax and employer accounts, you’ll need to complete the Pennsylvania Enterprise Registration Form (PA-100).
This form enables Pennsylvania LLCs to establish multiple accounts, including:
Employers can file and pay state taxes online by using Pennsylvania’s Electronic Tax Information and Data Exchange Service (eTIDES).
Opening a business bank account is another important task when starting an LLC in PA. By opening a business bank account, you can avoid commingling funds and keep your personal finances and business finances separate. You may also want to obtain a business credit card for this purpose.
When it comes to managing your business’s finances, you have a lot to juggle. You can use ZenBusiness Money to manage everything from invoices to tracking tax-deductible expenses all in one place.
Depending on your industry, you may also need to obtain any necessary business licenses or permits. This step isn’t necessary for all Pennsylvania LLCs, but is instead industry-dependent.
For example, insurance agents will need the proper licensure to bind insurance policies in Pennsylvania. Anyone selling alcohol will need the appropriate license for their business, etc.
If you want to check and see if you’ll need a business license in your industry, use our business license report service. You can also check with the Pennsylvania Department of State.
One of the main benefits of the LLC business structure is its flexibility. That flexibility also shows up in the fact that LLC owners can choose how they want their business to be taxed.
By default, LLCs are taxed as either a partnership or a sole proprietorship, depending on whether they have one or multiple members. However, LLCs may opt to be taxed a C corporation or S corporation if it benefits them financially.
It’s true that a C corporation is taxed twice (once on the company tax return and once on the individual’s tax return). However, filing as a C corporation can also result in tax deductions that still save an LLC owner money in certain cases for certain LLCs. For example, insurance premiums can be written off as a business expense.
S corporation is short for “Subchapter S Corporation.” This structure is geared toward small businesses. Like a standard LLC, S corps have pass-through taxation. But there’s another bonus, they can also save you money on self-employment taxes.
This is because S corps allow you to be an “employer-owner,” and split your income into your salary and company profits. That means you pay self-employment taxes on your salary, but not your company profits. (Those profits will still be subject to income and other taxes, of course.)
The drawback is that the IRS scrutinizes S corps more closely. That means you are more likely to get audited as an S corp.
While you may save money filing as an S corp, we must stress that taxes are extremely complicated. To understand what would best benefit you and your LLC, it’s best to consult with an accountant or tax professional before making decisions regarding how to file.
Another big part of staying compliant in the state of Pennsylvania is filing your decennial report. A decennial report (commonly known as an annual report in other states) is required for all businesses that operate in the state of Pennsylvania.
Your decennial report must be filed every 10 years, in the year ending in “1” (2011, 2021, 2031, etc.). A decennial report lets the state know that your business still exists and whether anything with your business has changed. To file your report, you’ll complete the Decennial Report of Association Continued Existence. You will then submit your form and filing fee to the Pennsylvania Department of State. We can also take care of this part for you with our annual report filing service.
Understanding the available tax credits and incentives is crucial for LLCs in Pennsylvania, as they can significantly benefit your business financially.
To apply for these tax credits, LLCs should submit the necessary forms and supporting documents to the Pennsylvania Department of Revenue. The application process and eligibility criteria can vary, so it’s essential to consult with a tax professional or accountant for guidance. These tax credits not only help in reducing tax liabilities but also support the growth and development of your business in Pennsylvania. Being well-informed about the available state-specific incentives can be a crucial aspect of your business’s financial strategy, contributing to overall success and sustainability.
You have several options when it comes to forming an LLC in Pennsylvania. Here’s a breakdown of the different types:
Domestic LLC: A domestic LLC is one that’s formed within the borders of Pennsylvania.
Foreign LLC: If you’ve formed your business outside of Pennsylvania and want to do business within the Commonwealth, you’ll need to register as a foreign LLC. For more information on how to do that and what constitutes doing business in Pennsylvania, see our Pennsylvania foreign qualification page.
Single-member LLC: A single-member LLC is one that has only one member (owner).
Multi-member LLC: As the name suggests, a multi-member LLC is one with more than one member.
Member-managed LLC: When an LLC is managed by its members, it’s known as a member-managed LLC. This management system works best when there are just a few members who all take part in running the business.
Manager-managed LLC: If an LLC has many members and/or some members that don’t want to take part in running the business, the members may choose to make it a manager-managed LLC. With this paradigm, the members appoint one or more members to serve as manager(s) or hire a manager from outside the LLC membership.
PLLC: A Pennsylvania professional limited liability company (PLLC) (also known as a restricted professional LLC) is a specialized legal structure designed for professionals in certain licensed fields, such as doctors, lawyers, accountants, and architects. It offers limited liability protection to its members, shielding personal assets from business liabilities, while allowing professionals to practice their licensed professions within the state.
Benefit LLC: A Pennsylvania benefit LLC, also known as a public benefit limited liability company, is a unique legal entity that combines aspects of a traditional LLC with a commitment to achieving a specific public benefit or purpose. While it operates as a for-profit entity, a benefit LLC is legally obligated to consider the broader social or environmental goals outlined in its Articles of Organization. This innovative structure allows businesses to pursue profit while also making a positive impact on society or the environment, and it requires accountability and transparency in achieving its stated public benefit objectives.
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From the City of Brotherly Love to the chocolate-lover’s paradise at Hersheypark, Pennsylvania is full of culture, history, and opportunity. What an amazing place to start your new business.
Ready to start your LLC in Pennsylvania? As you’ve just read, there are a lot of steps to follow in order to do so. Plus, there are tons of details you need to handle along the way. Luckily, we can help you throughout the entire process.
From filing your formation documents to providing registered agent services and helping you stay compliant, we’ve got your back. Don’t go it alone. Reach out to us today!
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As of this writing, the filing fee for starting an LLC in Pennsylvania starts at $125 for your Certificate of Organization. You may also pay additional fees for things like reserving your business name (if you choose to do so) or securing a fictitious business name. Expediting your filing speed will also result in additional fees.
If your business is at least 51% veteran- or reservist-owned, under Act 135 of 2016, you might be exempt from payment of certain business fees. This includes all fees required to be paid to the commonwealth to start and operate a business in Pennsylvania.
Check this page to view a full rundown of current Pennsylvania filing fees. Keep in mind that filing fees can also change. Consult with the Pennsylvania Department of State for the most up-to-date filing fee information.
An LLC is considered a “pass-through” entity. This means that earnings and profits are passed through to the members and claimed on their individual tax returns as personal income without first being taxed on the business level.
There are no separate federal income taxes for an LLC as a business unless the owners choose to have it taxed as a corporation. A single-member LLC will need to claim earnings on the owner’s tax return.
If there are multiple members, forms will need to be filled out and distributed to each member, indicating their share of the earnings for tax purposes.
There might be additional taxes if you have employees, sell taxable items, or engage in certain activities.
Visit the Pennsylvania Online Business Entity Registration page on the Department of Revenue’s website to view all possible taxes and register to pay those that apply to you. These include:
The statewide sales tax rate is 6%. If you sell items in Allegheny County, there is an additional 1% local tax. In Philadelphia, a 2% local sales tax also applies.
In addition to taxes paid to the state, you will need to pay federal self-employment and payroll taxes to the IRS. Business taxes, even for an LLC, can get complicated, so consult a tax professional for guidance. See our article on small business taxes for more information.
There are many reasons to consider forming an LLC in Pennsylvania. First, there are the benefits of the LLC business structure itself, which provide the protection of a corporation and the tax benefits of a partnership or sole proprietorship. An LLC:
Pennsylvania also contains many features that make it an ideal location for setting up a business. The benefits of starting a business in Pennsylvania include:
According to the Pennsylvania Department of State’s FAQs, you should allow approximately seven to 10 business days for processing. If you mail in your documents as opposed to filing online, it may take longer.
Pennsylvania has options for expediting your filing for an additional fee.
You do not need to file your operating agreement with the Commonwealth. However, they are legally binding documents that should be kept in a safe place if needed in the future.
In the absence of an operating agreement, your LLC will be subject to the default rules and regulations laid out in Pennsylvania law.
A Series LLC is a limited liability company with more than one series of members, managers, or LLC interests having separate rights, powers, or duties with respect to specified property and/or obligations of the LLC. Any series may also have a separate business purpose.
Currently, Series LLCs are not allowed in Pennsylvania, but Pennsylvania law upholds the protections of such LLCs formed in other states that do business in Pennsylvania.
Any LLC offering professional services needs to form as a restricted professional company such as chiropractic, dentistry, law, medicine and surgery, optometry, osteopathic medicine and surgery, podiatric medicine, public accounting, psychology, or veterinary medicine must be professionally licensed and form as a restricted professional company.
If you are selling taxable items, you will need to obtain a sales tax license through the Department of Revenue.
Business licenses you’ll need to make sure your LLC has all the licenses and permits it’s required to have by law. Unfortunately, because licensing varies by industry and location and can occur on the federal, state, and local levels, there’s no central place to check to see if you have all the licenses and permits you need. You’ll have to do some research.
If you don’t have the time or inclination to do all this business licenses research, or if you just want the peace of mind to know that your business has all the licenses and permits it’s legally required to have, our business license report service can do the work for you.
For details about business insurance, visit the Pennsylvania Insurance Department webpage to learn more about what might be required, including workers’ compensation if you have employees.
To remove a member, you will need to file a Certificate of Amendment and pay a processing fee. Note that removal of a member will be subject to any rules set forth in your operating agreement.
To dissolve your LLC, you will need to file a Certificate of Dissolution and pay a fee. This does not, however, end the existence of the LLC.
To fully terminate the LLC, all debts, taxes, and other liabilities must be paid or resolved, and a Certificate of Termination must be filed for an additional fee.
For more information, visit our Pennsylvania business dissolution guide.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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