How to Start an LLC in Pennsylvania: If you’re interested in setting up an LLC in PA, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. Pennsylvania laws make it easy to establish your LLC in Pennsylvania. On this page, You’ll find all the steps that must be taken to ensure that your Pennsylvania LLC has been correctly established. We recommend you read the whole article very carefully word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Pennsylvania
- After Starting Your Pennsylvania LLC
- Pennsylvania Foreign LLC
- Pennsylvania LLC Formation Review
How to Start an LLC in Pennsylvania
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.
If you wish to start an LLC in PA, mainly you have to file your Certificate of Formation with the State and pay a filing fee of $125. There are some more steps to follow to get your LLC established in Pennsylvania. The following steps explain everything you need to create your LLC in Pennsylvania in 2022. Let’s get started!
Step 1: Decide a Name for Your Pennsylvania LLC
The very first step while forming an LLC in Pennsylvania is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
Pennsylvania LLC Naming Guidelines
There are a few specific requirements all the LLCs in Pennsylvania have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Pennsylvania can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
- “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Pennsylvania State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|Pennsylvania Business Entity Search – Online Name Search|
Name Reservation Form – PDF
Name Availability Standards – Guidelines
Pennsylvania LLC Name Search – Instructions
|Secretary of State|
P.O. Box 5616
Montgomery, AL 36103
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 120 days. To keep the name, you have to file a name reservation application and pay $70 to reserve your name with the Pennsylvania Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Pennsylvania Secretary of State by submitting an Application to Register Trade Name in Pennsylvania along with the filing fee of $70.
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Tailor Brands offer DIY website templates and incredible logo designs. If you plan to get a website then it is wise to have a “.com” domain for your business but these days you can also use other TLDs like “.company”, “.xyz” etc. With Tailor Brands, you can get everything you need at an affordable price.
It is not legally mandatory to use the word LLC in your domain name or email. If you want you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Pennsylvania
The second step to forming a Pennsylvania LLC is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Pennsylvania. Hence, hiring a competent Pennsylvania Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Pennsylvania or has a physical street address. Their business address or the principal address should be in Pennsylvania. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year) you also get registered agent service and other services at a reasonable price.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Pennsylvania. Some LLC formation services offer standalone Pennsylvania registered agent services. You can purchase only Registered Agent services from them without purchasing any other LLC formation services.
A person who is above 18 years of age and has a physical address in the state of Pennsylvania can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One who is responsible for handling all the legal documents.
Yes, you can be your own registered agent if you are a resident of the state of Pennsylvania and you are above 18 years of age. To become a registered agent you must have the authority to conduct any type of business in Pennsylvania.
Registered Agent Consent Application
In Pennsylvania, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $5 should be paid for it. For more information on the same, read our guide on Pennsylvania Registered Agent.
Step 3: File Certificate of Organization in Pennsylvania
The third and most important step in forming a Pennsylvania LLC is to file the Certificate of Formation. This Pennsylvania Certificate of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $125 (by mail and online) to file your formation certificate in Pennsylvania. (Read more on LLC cost in Pennsylvania).
The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in Pennsylvania LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) to Pennsylvania then you need to register as a Pennsylvania Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. Go to the “Business Filing Forms” section to find the filing form. You can directly start filing your LLC by clicking on the “Online Filing” button below. Read more about the Pennsylvania Certificate of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your Pennsylvania LLC registration, then you can download Domestic LLC Formation Form. Read the form thoroughly, fill it out, and mail it to the following address,
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105
Processing Time: It takes 2 to 3 business days to get an LLC in Pennsylvania if you file it online or via mail. By paying an additional fee, it can be expedited.
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Tailor Brands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your Pennsylvania LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Pennsylvania LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like Alab, there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve Pennsylvania LLC later. Hence, having an operating agreement may not be necessary but it is definitely ideal.
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Step 5: Filing a Pennsylvania LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Pennsylvania LLC requires following specific rules and regulations. On the other side, EIN for Pennsylvania foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
Tailor Brands – ($49 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your Pennsylvania LLC. If you do it yourself it should take you a long time to properly understand and do all the steps.
However, if you use TailorBrands it should take fewer hours and you always have live chat with expert support for any help you need.
After Starting Your Pennsylvania LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Pennsylvania business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File a Pennsylvania LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Cost of Pennsylvania LLC
Forming an LLC in Pennsylvania is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form a Pennsylvania LLC. LLCs have pass-through taxation. Hence, your Pennsylvania LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in Pennsylvania,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee||$70|
|Certificate of Organization Fee||$125 (by mail and online)|
|LLC Annual (Decennial) Fee||$70|
In Pennsylvania, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 120 days without registering your LLC. It can be done by paying $70.
In Pennsylvania, an Annual Report has to be produced every year. It costs $70. Also, the State of Pennsylvania requires LLCs to pay a Sales Tax of 6% every year. Read our guide on LLC costs in Pennsylvania for more information.
Pennsylvania Foreign LLC
If you are interested in forming a Foreign LLC in Pennsylvania then you need to file the Certificate of Foreign LLC to the Pennsylvania Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Pennsylvania SOS to form your foreign LLC in Pennsylvania. To know more in detail, check out our guide on Pennsylvania Foreign LLC.
Reasons to Start an LLC in Pennsylvania
Pennsylvania State, also known as the country’s Quaker state, is considered one of the most innovative states of the country. This innovation is also shown through the great landmark structures made in the state, which is also great for starting a business. The state is home to plenty of skilled labor force and business opportunities. Apart from that, various business funding options and reductions in tax liabilities are beneficial to start an LLC in Pennsylvania.
Loan and Grant Programs
The first benefit of starting an LLC in Pennsylvania is the loan grant programs available in the state. Various programs started by the government in the state are very beneficial for new startups that lack investment. All an entrepreneur needs to have is an innovative idea or forefront technology usage with the help of which they can easily enroll in the loan program.
The below-mentioned loan programs fulfill all the basic assistance that the Pennsylvania LLC requires.
- The first one is the Alternative and Clean Energy program. A grant is provided to companies working to better the energy sources and improve the environment.
- After that, there is a Business opportunity Fund provided to a range of businesses only after examining their business idea and the possible outcomes.
- A High-performance Building program for an LLC grants to LLC for their construction purpose and sets up a high technology building that can cater to better business opportunities and jobs.
- One more important grant program is the Neighborhood Stabilization Program which helps the non-local residents to stabilize their business and personal housing space in the state.
Job Creation Tax Credit
When an LLC starts developing jobs and helps in the state’s economic development, then a tax credit is provided to them. It helps them to expand more and create more such jobs in the region. To gain eligibility for this tax credit, an entrepreneur has to create more than 25 jobs within three years of their LLC startup. If one gets the enrollment, they will get a maximum tax credit of $1000 per employee hired. Read more on Pennsylvania’s classification of LLC tax.
The Opportunity Zone of Pennsylvania
There are more than 300 areas in the state which the government has started considering as opportunity zones. When entrepreneurs start an LLC in Pennsylvania, especially in that area, they will get some tax credits or maybe deferment gains on the fund that one is investing in for more than 5 years. The government’s main motive is the economic development of backward areas by creating jobs and a business environment.
Top 3 Businesses in Pennsylvania
If you want to start an LLC in Pennsylvania, it would be best to get a complete knowledge of established industries. You must know all the top industries based in the state to understand the business environment than before better.
Anthracites coal which is known for its highest carbon percentage is found only in Pennsylvania. Some of the state’s mining regions are Northumberland, Columbia, Schuylkill, etc., producing this coal. Other than coal, there are deposits of limestone also that are found in the state. The limestone is supporting a vast cement industry of the state.
With the help of all the large-scale mining and small mining products like petrol, gravel, and natural gas, the contribution of mining businesses is around $36.86 billion to state GDP.
The manufacturing businesses have helped the state by contributing around $93.75 billion, equivalent to 11.89%. Various businesses of metal and machinery production are employing more than 569,000 people of the state.
Along with that, there is remarkable support of manufacturing business to the exports sector. They have managed to export around $35.85 billion worth of goods around the world. Some food production industries for which the state of Pennsylvania is famous are:-
- Bakery products like cakes, cookies, bread, and beer.
- There is a massive production of canned mushrooms, potato chips, and ice cream in the state.
Since the year 1682, when the state was formed, agriculture’s role is crucial in the state’s economy. There are around 59,309 farms in the state, with the average size of the farm is 130 acres. Some of the crops that are grown in the state are:-
- 63.8% of mushrooms in the USA.
- The fifth-largest producer of grapes
- Livestock product like milk, eggs, and beef
Some small businesses that are well established in Pennsylvania are:-
- Property management
- Virtual Assistant
Pennsylvania LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Pennsylvania. Click on the steps in this list to read the full detail.
- Name your Pennsylvania LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Pennsylvania, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services like NorthWest Registered Agent to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in Pennsylvania. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Pennsylvania but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in Pennsylvania
The filing procedures for LLC in Pennsylvania, may take up to 2-3 business days, both online and in person. As soon as you make the payment the process will start.
How fast can you form an LLC in Pennsylvania? It depends on the type of business and the state you’re in. Some states take up to a week to process your application, while others can approve your limited liability company application within three days. Filing times may also vary at certain times of the year, such as the beginning and end of the year, when the state sees a large amount of filings.
The Department of State processes your application, which will grant you a certificate of organization. This process takes about a week unless you submit it late. If it’s more than a week, you can refile your application, but you’ll likely pay a higher fee if your application is rejected. This is particularly important for people who want to start their own businesses but are worried about the delay in processing.
To form an LLC, you’ll need to submit a certificate of organization to the Dept of State. Then, you’ll need a physical address for your company. This is where your business records will be kept. Your home address, which is also known as your Registered Office Address, can be your business’s physical address. However, you cannot use a Post Office Box for this address. Instead, you’ll need to register with a Commercial Registered Office Provider (CROP).
There are some basic steps to form an LLC in Pennsylvania. First, you must choose a unique name for your company. Your name should be distinctive enough to avoid confusion and be available in the business name database. Pennsylvania’s business name database is a great way to check if the name you want is already in use by another company. Your name must end in the words “company” or “limited liability company” to be unique. Lastly, there are some restrictions on certain words.
Filing an LLC in Pennsylvania can take a couple of weeks. Filing by mail takes 5-6 weeks, and it’s important to note that Pennsylvania does not offer expedited services for LLCs. In addition, it’s important to check whether your chosen name is available before filing. Name reservation forms are necessary for a limited time. You should keep in mind that name reservation forms hold names for 120 days and cost about $70.
Once your business is registered with the Pennsylvania Department of State, you need to choose a registered agent. The registered agent receives important legal and tax documents on behalf of your business. Your registered agent must be a Pennsylvania resident or a registered business. If you’re not sure, you can designate a person or firm within your company to act as registered agent. They’ll keep track of all of your legal matters.
Choosing an organizer is essential for attracting funding. A name that has been registered with the Department of State is important to show potential investors that you’ve put thought into your business. An operating agreement should force you to think about scenarios you’d like to avoid, while being flexible. When preparing Articles of Organization, make sure to include the name of your business, your “Doing Business As,” your registered office, and any capital contributions that may be relevant. You’ll also need to decide how you want your profits to be split, so make sure to include all relevant information in your operating agreement.
If you are a resident of Pennsylvania, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $125 (domestic LLC) and $125 (foreign LLC), LLC costs in Pennsylvania include $70 for Decennial Reports every 10 years. LLCs are liable to pay sales tax of 6% every year.
It takes 2 to 3 business days to get an LLC in Pennsylvania if you file it online or via mail. If you hire a professional LLC service, then it might take less than that. We recommend Tailor Brands which has impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $70 to the Pennsylvania Secretary of State every 10 years and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Pennsylvania Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in Pennsylvania at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.