Start your business
If you’re like most entrepreneurs, you’ve likely spent hours planning and brainstorming your new business. But before your business can get off the ground, you have to take care of the legal paperwork involved in registering your business with the state and setting up all the details so that you can stay compliant with state laws.
One of the first steps in that process involves deciding on a business structure. If you’re here, it’s because you’ve concluded that a limited liability company (LLC) is right for you.
There are many reasons you might be interested in forming an LLC in the commonwealth of Pennsylvania. Perhaps this is your home, which is the most logical location for your business idea. Or maybe you are branching out from another state and believe further business prospects await you in this great commonwealth. Whatever the reason, ZenBusiness is here to help.
Whether you are new to the world of business formation or you’ve gone through this process before, it’s easy to get bogged down in the details, laws, and requirements for getting your idea off the ground. No doubt you’re eager to get to the good stuff — gaining customers and providing services — but there is a lot of red tape between here and there.
Fear not! There is a reason we created this guide, and it is for people like you. We want you to feel confident and informed as you embark on your new business venture. Here we provide a detailed outline of all the steps required for forming your LLC in Pennsylvania. You will also learn how partnering with ZenBusiness can help you through this process quickly, efficiently, and affordably.
1Name Your Pennsylvania LLC
Choose a Registered Office in Pennsylvania
Officially forming an LLC in Pennsylvania begins with filing the Certificate of Organization with the Pennsylvania Department of State. However, there are unofficial tasks that must be completed before getting to that step.
To even be able to fill out the appropriate paperwork, you need to choose a business structure, develop a general plan, decide on a name, and choose a registered agent. By the time you get to filing officially, you need to have a solid handle on your business details.
Pennsylvania has a website dedicated to those in the process of planning and forming a business in the state. It includes resources to help you write a business plan, explore business structures, and get general advice. All of this can be extremely useful, particularly in the early stages.
A business plan, for which Pennsylvania provides a template, allows you to pin down your strategy and get a good handle on what you will need moving forward as you prepare to register.
Once you register, a public record of your business is created, which allows the state to communicate with you on important matters of regulation.
After filing comes the creation of an Operating Agreement, along with obtaining any necessary licenses or authorizations and setting your business up to pay taxes at the federal, state, and local levels.
This guide breaks these steps down into simple pieces so that you can keep it all straight. Read the following step-by-step guide to forming an LLC in Pennsylvania so that you can get started and take charge of your business formation with confidence.
The first step in preparing to register your business is choosing a name. You want a name that is descriptive of your services and not too generic or vague. Consider using words creatively, but avoid copying competitors or creating something too complex.
There are many naming requirements to consider when naming your Pennsylvania LLC. The first one to be aware of is that it cannot be a name already in use. You can do a business name search on the Department of State’s website to check if the name you want is available.
The next thing to consider with your business name is the requirement to include an LLC designator. Your LLC business name must include the term “company,” “limited,” or “limited liability company.” Alternatively, it can contain an abbreviation of one of those options. Words your business name cannot contain include:
In essence, your business name should not include any words that might suggest an alternate business entity type or association with an entity or service that it is not officially part of or engaged in.
Choosing a name is not the end of the naming process, especially if you are not immediately ready to file your Certificate of Organization. If you have a name you like, you can reserve it so that it will still be available to use when it comes time to file your paperwork.
To reserve your chosen name, you will need to file a Name Reservation/Transfer of Reservation form and pay a $70 fee. The name will then be reserved for 120 days, after which it becomes available to anyone again, including you, if you are still in the planning stages of your business.
Another consideration when choosing the name is the availability of website domains. Most businesses do best by having a website these days, and you don’t want to come up with a name, register it, and then realize there are no web domain names to be had that include your business name in a reasonable way. You want to make sure your business name lends itself to a catchy domain name that happens to be still available. So, be sure to do a domain name search, and consider allowing ZenBusiness to reserve your domain name once you settle on your business name.
Finally, you may want to consider a DBA (“Doing Business As”) or fictitious name. If there is a name you would like to do business under that doesn’t include the LLC designator or that pertains to a certain part of your business that you would like to distinguish from the rest, you can register a fictitious name by filling out a Registration of Fictitious Name form and paying a $70 fee. Be sure to visit the United States Patent and Trademark Office website to see whether your business name or logo is federally trademarked, too, before reserving. It’s also possible to have a trademark that applies only within Pennsylvania.
That was a lot of information! To summarize the naming process, here are the basic steps:
Foreign LLCs: If you operate your business from another state and would like to do business in Pennsylvania, you may use the same name that you already use, unless it does not meet Pennsylvania’s requirements. If the requirements are not met, you must supply an alternate name for use within Pennsylvania that does.
A registered agent’s role is to act as a third party between your business and any legal paperwork or summons that might come your way. A registered agent is a person or business whose primary purpose is to receive legal notices and communications.
Many states have an explicit requirement for a registered agent when the Certificate of Organization is filled out. Pennsylvania, however, is a little different. What you are asked to supply when filling out the form is the address of your LLC’s registered office within the state (street address; a P.O. box is not considered sufficient) or the name of your LLC’s commercial registered office provider along with their county of venue.
The registered office provider is essentially the same thing as a registered agent. If you are doing business from out of state, you will certainly need one. If your business’s location is in the state, however, you can get away with listing the street address of your business.
ZenBusiness, however, strongly recommends the use of a registered agent (or registered office provider) service for several reasons. The benefits of working with an outside registered agent service include:
Just as forming an LLC keeps your personal and business assets separate, using a registered agent service can put some distance between you and any service of process. By partnering with a registered agent service, you can spare yourself headaches and hassles. ZenBusiness can provide registered agent services for your LLC.
After finalizing your Operating Agreement, it’s time for all members to sign. It’s a good idea to have these signatures notarized to secure the legal foundation of the agreement. However, you do not need to file the finalized agreement with the state or any other entity. You just need to keep it in a secure location with any other business-related documents.
An Employer Identification Number (EIN) is required of your LLC unless it is a single-member LLC with no employees (and sometimes even then). Obtaining an EIN is as easy as completing the application on the IRS website.
The application must be completed in one session, and the system does not allow you to save and return later. Sessions expire after 15 minutes of inactivity. If you prefer not to complete the form online, you can complete and mail in Form SS-4. You will need to enter the information associated with your business and your Social Security number or Taxpayer Identification Number (TIN).
An EIN can be thought of as a Social Security number for your business. It is a way that the government can uniquely identify your business as an entity separate from you. It can also be used for opening a bank account and applying for business licenses.
When you fill out the EIN application online, your EIN will be available immediately; however, it may take up to two weeks before becoming part of the IRS’s permanent records.
ZenBusiness can help with many parts of the process via our business formation services, which include completion and submission of your business filing paperwork, serving as your registered agent, and an Operating Agreement template for your new LLC.
Our more comprehensive plans also handle other headaches, such as getting an EIN and complying with state regulations. By letting ZenBusiness handle everything for you, you can save money in the long run and never worry about compliance, late fees, or fines.
According to the Pennsylvania Department of State’s FAQs, you should allow seven to 10 business days for processing. If you mail in your documents as opposed to filing online, it may take longer.
Expedited service is available for an additional fee. Forms must be submitted in person to be expedited. Same-day service submitted before 10 a.m. is $100, three-hour service submitted before 2 p.m. is $300, and one-hour service submitted before 4 p.m. is $1,000.
Operating Agreements do not need to be filed 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 rules and regulations laid out in Pennsylvania law.
When you get an EIN, you will be informed of the available tax classification options. LLCs typically elect the default tax status, which means that owners pay state and federal taxes on income earned from the business as part of their individual taxes. Larger LLCs may opt to file taxes as a corporation.
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 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.
Licenses and permits are often industry-specific and can happen on the federal, state, and local level. You’ll need to research what licensing your LLC needs.
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 $70 processing fee. Note that any removal of a member will be subject to any rules set forth in your Operating Agreement.
Only Restricted Professional LLCs and Benefit LLCs are required to file annual reports or registrations. Annual registration for Restricted Professional LLCs varies in cost, depending on the number of members and other factors, but it is usually at least $500. Annual reports for Benefit LLCs are $70. All LLCs are additionally required to file decennial reports on years that end in “1” (2021, 2031, etc.) for a fee of $70.
Want to learn more about starting a business in Pennsylvania? Contact us today!
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