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. On this page, You’ll find all the steps that must be taken to ensure that your LLC has been correctly established in Pennsylvania. 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, you mainly 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 2022. Let’s get started! It is always recommended to hire a professional LLC formation service in Pennsylvania to set up your LLC.
Step 1: Decide a Name for Your Pennsylvania LLC
The very first step while forming an LLC in the state of 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.
LLC Naming Guidelines in Pennsylvania
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.
Recommended: You can do name search, get company logo, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
TailorBrands 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 TailorBrands, 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 an LLC in the state of Pennsylvania 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 for service of process 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 for the service of process 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 an 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 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 PA if you file it online or via mail. By paying an additional fee, it can be expedited.
Recommended: Online LLC Formation service can provide all these documents in lesser days along with lifetime customer support and 100% accuracy. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your LLC Operating Agreement in Pennsylvania
Moving on to the fourth step, filing your operating agreement. An operating agreement is an internal 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.
Recommended: You can get operating agreement templates at only $29 with TailorBrands. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Step 5: Filing an LLC EIN in Pennsylvania
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 –
TailorBrands – ($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 LLC in the state of Pennsylvania. 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 a 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. Along with business bank accounts, get a business credit card, business accounting tools, and other tools to check revenues and business expenses. Depending on the business structure, get the business accounting tools.
- File Pennsylvania business permits & licenses. Business licenses are mandatory to run a legitimate business. Before you get suitable business licenses, make sure to check all the details of business licenses you require.
- Get general liability insurance and professional liability insurance with coverage for employees. Before you choose what types of business insurance, you can explore all the details about business insurance companies.
- 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 Starting an LLC in the State of Pennsylvania
Forming an LLC in the state of 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 an LLC. LLCs have pass-through taxation. Hence, your 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 the state of 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 the state of 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 the state of 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 the state of Pennsylvania.
When it comes to business funding in Pennsylvania, women entrepreneurs can enjoy more benefits. A woman-owned business or women entrepreneurs in Pennsylvania not only get a reduction in tax liabilities but also get flexibility in getting loans. Pennsylvania has a bunch of banks for small business that provide short-term loans to support SMEs. LLCs, in general, do not have many business taxes to pay. Apart from federal income taxes, there aren’t a lot of business taxes to be paid by LLCs.
Loan and Grant Programs
The first benefit of starting an LLC in the state of 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 LLC requires in Pennsylvania.
- 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 the state of Pennsylvania, especially in that area, they will get some tax credits or maybe deferment gains on the fund that one been 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 the state of 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.
Anthracite 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 supports the 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 the state GDP.
The manufacturing businesses have helped the state by contributing around $93.75 billion, equivalent to 11.89%. Various businesses in metal and machinery production employ more than 569,000 people in the state.
Along with that, there is remarkable support from the manufacturing business to the export 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 has been crucial in the state’s economy. There are around 59,309 farms in the state, with the average size of the farm being 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 products 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 a Limited Liability Company 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.
Things to Consider While You Start an LLC in the State of Pennsylvania
In this article, almost all the essential steps are explained to form your LLC. However, apart from these broad steps, there are some other things to consider. For example, business formation plans, business formation documents, business fees, business strategies, business tax accounts, and such. These things are considered to be essential steps when starting your LLC.
By now, you already know about the business naming rules. You can check and find available LLC names in the business name database. If your desired name is not available, then you’ll find it in the database by doing a business search with the name. You can even start with fictitious business names to reserve your LLC name before you form your LLC. Your LLC formation service providers offer business name reservation services in their packages.
Annual costs for maintaining an LLC are much lesser than other business structures. LLC annual costs include the one-time cost of the formation process, fees for business licenses, amendment filing fees, and some other fees and charges.
As soon as your LLC is formed, you must consider a handful of things, such as deadlines. For example, upcoming filing deadlines, deadlines for tax filing, other government filings, and so on. You must be updated with the filings, especially government filings, to avoid late filing fees. If you are to file amendments, then you can hire professionals for amendment filings, as many professionals provide amendment filing services along with tax filing and such.
To form an LLC, along with filing fees, you must pay federal income taxes and some other business taxes. So, it is definitely not absolutely free. As you are about to start your LLC, you must have a business plan. Your business plan should have all requirements so that you can be prepared for all types of business challenges. As soon as you have a solid business plan, you can move further to bank applications for funding, etc.
In Pennsylvania, women entrepreneurs or first-time entrepreneurs can enjoy more tax benefits than others. LLC is a simple business structure to start with. If you’re a new entrepreneur, it is more profitable for you to start an LLC than a traditional corporation. As soon as the LLC is set up, your company must be up-to-date with coverage for employees if you hire employees. On the other hand, file employment taxes for your professional employees.
In the state of Pennsylvania, there is no mandatory rule to submit an operating agreement. It was mentioned above. However, it is useful to have this operating document along with formation documents. You can read the operating agreement guide to know more about its importance. Professional formation service providers help you with the operating agreement templates. Operating agreements have the name and share of the manager, the authority of manager, and also the names and shares of initial managers.
To form an LLC, you can apply online/by mail. The online application takes less time than filing by mail or any other way. The entire process takes a day or two. With the LLC formation service providers and their excellent customer care service, it is even easier to start your LLC.
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.
The first step in forming an LLC is to register the company with the state. In LLC lingo, people who form the company are called members. After registering the company with the state, you can then start working on establishing your company. You must remember the deadlines and costs that must be paid.
The next step is to file the company’s Certificate of Organization. This document must state the name of the business, address, registered agent, LLC organizer, and plan of management. If you choose to file your LLC online, you’ll need to create a Keystone Login account.
Before you file your LLC paperwork, you should choose a unique name. A unique name will avoid confusion among customers and the general public. You can search for available names on Pennsylvania’s website. However, you should make sure the name you choose is not already taken by another business. The state also prohibits the use of certain words in the name.
When registering your LLC, you need to choose a name that’s unique and recognizable. The name of your business must include “company” and “limited liability company” as well as the registered office address. It can be your home address or any street address in the state. It’s important to note that a Post Office Box is not acceptable for your Registered Office Address. Alternatively, you can register your LLC at a Commercial Registered Office Provider (CROP) registered with the state.
The processing of your Pennsylvania LLC will take approximately two to three business days. You can choose to file electronically or by mail if you want your documents back faster. You should also sign an operating agreement so that all of the business owners have the same understanding of how the business should run. If you have questions about your LLC, contact the state’s website for more information.
When filing your documents, you must make sure you open your company during normal business hours and have someone on hand to accept service of process. Once you have these documents approved, you will be able to file two important documents with the state. You must pay the fee by check or money order made payable to the PA Department of State. Then, you need to file your business name registration and Docketing Statement. The information on these forms will be part of the public record.
When it comes to naming your LLC, it is very important to choose a name that’s unique, but not one that is already in use by another business in Pennsylvania. To get an idea of whether your chosen name is available, check out the Pennsylvania business name list. You must also make sure the spelling is correct. The name of your LLC must contain the words “company”, “limited,” and “limited liability corporation.” The address must be in Pennsylvania.
The process for forming an LLC in Pennsylvania can be intimidating and complicated, but it is possible to do it yourself. Doing some research and having patience will help you navigate the process. By following these steps, you can form an LLC in Pennsylvania without an attorney. You should ensure the availability of the business name before you file the paperwork. To reserve a name, you need to fill out a Name Registration form, which costs $70 and secures the name for 120 days. You can submit your name reservation form online or by mail.
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 TailorBrands, which has an 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 LLCs, it is a default tax structure. Once you 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 the state of 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.