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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. Your business name provides the public with a first impression of your company, so it’s important to choose one that conveys your desired brand image.
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You also need to adhere to Pennsylvania LLC and business naming rules. For example, Pennsylvania requires all LLC names to include the phrase “limited liability company” or an abbreviation of the term, such as:
LLCs are also prohibited from using names that contain any variations of the word “corporation” or make it seem as if the business is a government agency. Finally, a Pennsylvania LLC cannot use a name that is too similar to any name already being used by another business in the state.
Before you can reserve or register a business name for your Pennsylvania LLC, you need to make sure it isn’t already taken. Our Pennsylvania business search page can help you with that part.
Once you’ve decided on your business name, registering it is as simple as filing your business formation documents (which we’ll cover in a later step). Found the perfect name, but aren’t quite ready to start your business? Use our business name reservation service to make sure no one else takes your name before you’re ready to register.
If you’re starting an LLC in PA, you may also want to consider applying for a “fictitious business name” or FBN. Also referred to as “doing business as” or DBA names, fictitious business names are used when a business wants to conduct business under a different moniker than its official company name.
A few examples of when an FBN would be used include:
If you want to conduct business under an assumed or fictitious name, you will need to file a Registration of Fictitious Business Name form (DSCB:54-311) with the Pennsylvania Department of State.
On this form, you will need to provide information such as:
Note: You may or may not also be required to “officially publish” an announcement of your fictitious business name. If there is anyone listed in Box 4 of the form (interested individual), then you will need to run an advertisement in two newspapers of general circulation in the county where your business is registered. If there is no interested party, you are not required to advertise.
If you want to further protect your business name and/or logo from being used by other entities, you may want to apply for a trademark. Placing a trademark on your company name or logo helps keep it from being copied, and also gives you standing ground in case of copyright infringement.
Trademarks are meant to protect intellectual property from being copied. Intellectual property includes things like:
To register a trademark in Pennsylvania, you will first need to make sure your desired name or design hasn’t already been trademarked in the state. You can do this by checking with the Pennsylvania Department of State. Then, you will need to complete the appropriate form (DSCB: 54-1112), and submit it to the Department of State.
If you want to register your trademark at the national level, you can check its availability with the United States Patent and Trademark Office (USPTO). If your desired intellectual property hasn’t already been federally trademarked, you can apply through the USPTO to trademark it yourself. This provides you with broader protection even outside the state of Pennsylvania.
A big part of doing business today is being available online. That’s why you’ll also probably want to secure a domain name for your Pennsylvania LLC.
You can do a quick domain name search to make sure your desired domain name is available. Then, we can register your domain name for you.
When you’re naming your LLC in Pennsylvania, a major factor to consider is whether your desired name is also available as a web domain. This step ensures that your business name will match up with your domain name for branding and recognition purposes.
To see if your desired name is also available as a URL, use our web domain name search tool.
Social media marketing is especially beneficial and important in today’s market. Many brands use Facebook, Twitter, Instagram, and other platforms to get the word out about their brand and to interact with potential and current customers. For that reason, you may also want to check to see if your desired social media handles are available for use (and snag them if they are).
Our domain name service can help you find and purchase a domain name for your business. We can also help you create a business website and even obtain domain name privacy.
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 who 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 are 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.
It’s extremely important that the Pennsylvania Department of State is able to contact your registered agent office when sending legal notices. If they can’t, you risk not receiving important notification of things like lawsuits and legal actions against your business.
If your registered office can’t be reached, your business could also fall out of compliance with the state of Pennsylvania. This could result in your LLC being dissolved by the state, which means you would lose your liability protection.
By using a registered agent service like ours, 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. Use our affordable registered agent services to keep your Pennsylvania LLC organized and compliant with the state’s registered agent requirement.
By using a registered agent service such as ours, you can gain peace of mind that you will receive notices from the state in a timely manner.
That means you can go out of town, take vacations, etc., without worrying that your registered office can’t be reached. You can also change office locations without having to update your registered agent address.
With professional registered agent services, you can rest assured that someone will always be available during business hours to receive legal notices on behalf of your business. Finally, a registered agent service will spare you the embarrassment of being served with legal papers (such as lawsuit subpoenas) in front of clients or colleagues.
One of the most important steps to forming your LLC is to file a Pennsylvania Certificate of Organization. This document (also referred to 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. You will also need to include your New Entity Docketing Statement, which we will cover in a moment.
When filling out your Certificate of Organization, you will need to include:
Choosing between a member-managed or manager-managed structure is situationally dependent. The decision really comes down to your members’ preferences and availability.
Most LLCs choose to be member-managed, as they are usually owned by one or just a few members. In this case, the members themselves have a hand in all day-to-day business activities, and have plenty of insight into the operational needs and circumstances of the business.
On the other hand, if your members don’t all have the time, availability, or inclination to manage your business on a daily basis, you can hire appoint one or more members or hire an outside manager to take care of things. When doing so, you’ll just want to properly and thoroughly vet your manager to make sure you can trust them with the operations of your company.
Along with your Pennsylvania Certificate of Organization, you are also required to submit a New Entity Docking 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.
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.
If it’s near the end of the fiscal year, entrepreneurs may sometimes decide to delay their LLC filing date. This is typically done to avoid the hassle and cost of having to pay taxes for a year that they were only open for a month or two.
Obviously, this would only be done when you don’t need to form your LLC right away.
Typically, your business’s formation date is the date your Certificate of Organization is filed. This is true whether the Pennsylvania Department of State approves your documents immediately or takes a few weeks. However, you also have the option of specifying a future-effective date when filling out your formation documents.
This is also another thing we can help you with. When you form your LLC in Pennsylvania with us, we give you the option of paying an extra fee to delay your LLC’s effective date. (Note: This service is only offered from October through January.)
Store your documents in a digital dashboard
If you have us file your formation documents, once your Certificate of Organization has been approved, your paperwork will be available in your ZenBusiness dashboard. Here, you can also keep all of your important documents organized and centralized in one convenient place.
Restricted Professional LLCs
Pennsylvania law requires entrepreneurs forming certain types of business to form a restricted professional LLC rather than a standard LLC. This is typically the case for individuals forming businesses such as medical offices, law offices, veterinarian clinics, accounting firms, and the like.
Check with your state’s licensing board in your industry to find out whether you need to form a restricted professional LLC.
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.
Operating Agreement Benefits
The benefits of an operating agreement are vast. By laying out all the details about how your company will be run, you can:
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.
What should an operating agreement include?
Your operating agreement should include all the pertinent details regarding management of your LLC, such as:
Make things easier with an operating agreement template
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.
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:
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.
Employers can file and pay state taxes online by using Pennsylvania’s Electronic Tax Information and Data Exchange Service (eTIDES).
Open a business bank account
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.
To further help you get your company off the ground, we offer a discounted bank account. This account allows unlimited transactions, online banking, a debit card, and more. We even offer a banking resolution template so you can authorize others to use the account.
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.
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!
Disclaimer: The content on this page is for informational 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.
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.