If you’re looking for a reliable DIY guide for starting an LLC in Pennsylvania, look no further. Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.
That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire an LLC formation service – they’ll take care of the paperwork so you can spend more time growing your business.
Recommended: Compare the Top LLC Services
If you’re new to the process of starting an LLC, you might also be unfamiliar with the LLC formation services that are reliable and offer great value – like ZenBusiness. As a reference point we compared them to the two most well known LLC formation services, IncFile and LegalZoom. See our comparison guides for more information:
Step 1: Name Your LLC
What’s in a name? Quite a bit, actually. Your business name is your Pennsylvania LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.
Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.
While you can (and should) be creative with your business name, there are certain commonwealth requirements that it must follow.
Your name’s validity is dependent on a few key conditions. It must include the words “Limited Liability Company,” “Limited,” “Company,” or any abbreviation thereof. Further, it cannot contain any language that implies affiliation with a business corporation, government agency, bank or trust, insurance company, public utility, credit union, or higher education institution. On top of all that, it must be distinguishable from every other business name on record with the Department of State.
If your desired name is already in use and you need to distinguish it, you may wonder how to go about it. The following differences will NOT make your name unique:
- Changing corporate designators like LLC, Inc., Corp., Ltd., etc.
- Using singular or plural versions of the same word
- Adding, removing, or changing articles (“a,” “an,” or “the”)
- Using a geographic designator after the name
- Using a numeral or spelled number after the name
- Punctuation, capitalization, and spacing
If your name is deemed “confusingly similar” to any existing name, you will need to make significant changes to its keywords rather than simply its syntax.
Consider this: your friend Fanny wants to open a flower shop in Harrisburg, Pennsylvania. The name she is considering, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Department of State’s records.
Determine the Name is Available
Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Certificate of Organization without first confirming it’s available. Use the Department of State’s Business Entity Search to see if there’s an existing business using your desired name.
Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.
Optional: Name Reservation
You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in Pennsylvania for a total of 120 days.
Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold through the PENN File online system or by sending a Name Reservation/Transfer of Reservation form and $70 payment to:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
You can also deliver your form in person to 401 North Street, Room 206, Harrisburg, PA 17120.
Fax is an option as well. Just send your document to (717) 705-0927 or (717) 783-2244. To use this method of filing, the LLC organizer must pay the $70 fee using a Bureau Customer Account Number with the Bureau of Corporations and Charitable Organizations.
Standard processing is 7-10 business days. Not fast enough for you? You can request same-day processing for an extra $100, three-hour service for $300, or one-hour service for $1,000.
Step 2: Choose a Registered Office
Fanny’s LLC is quickly taking shape, and if it’s going to operate in Pennsylvania, she’ll need a go-between for legal communications and notifications from the commonwealth. This is called the registered office.
Most states require LLCs to have a registered agent’s name on file, but Pennsylvania does not. Instead, your company only needs to have a registered office address. This is where your legal and commonwealth communications will go.
A registered office is a key component of your budding LLC, handling all of its sensitive communication with the commonwealth so you don’t have to. But maintaining this office isn’t just a convenience, it’s required. Pennsylvania’s LLC Act says “every limited liability company shall have and continuously maintain in this Commonwealth a registered office which may, but need not, be the same as its place of business.”
Taxes, lawsuits, maintenance requirements, and more – the registered office takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, the office makes your business available to receive documents even when you’re out of town. This is especially important if your LLC’s physical office is outside Pennsylvania.
Your registered office can be either a personal or corporate address.
Personal Address as Registered Office
You can use an individual’s home address as your registered office, as long as it’s a physical address in Pennsylvania, not a P.O. box. Feel free to use your own personal address – or that of a friend or family member – as long as whoever lives at that location agrees to take on the registered office repsponsibilities.
Registered Office Service
The Department of State provides a list of Commercial Registered Office Providers (CROPs), companies that will provide registered office services. It can be a lot easier, though, to use an LLC formation service like IncFile or Northwest Registered Agent, so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered office service. Or, if you’d rather start your Pennsylvania LLC on your own, you can use a national registered office service to provide a registered office address.
During the life of your LLC you may, at some point, need to change your registered office. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered office holder resigns. Either way, you’ll want to make the change as soon as possible because operating without an office address on file can lead to administrative dissolution.
Step 3: File the Formation Documents with the Commonwealth
This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.
She’s reserved her unique business name, designated a registered office, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Certificate of Organization. This filing creates a record for Fanny’s Florals and Design, LLC with the Pennsylvania Department of State, giving it the authorization to commence business in the commonwealth.
The commonwealth is pretty flexible with how you file your Certificate of Organization, providing options for online, mail, in-person, and faxed filings. So, go ahead and choose the one that works best for you. Regardless of which route you take, you will need to pay a $125 by card or check.
If you prefer to file from the comfort of your own home, head over to PENN File, Pennsylvania’s online filing system. Create an account, select the appropriate form, and you’re on your way.
Download and complete the paper application, then send it, with your payment, to:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
After completing the the application linked above, send it to (717) 705-0927 or (717) 783-2244. Faxed forms require the LLC organizer to pay the fee using a Bureau Customer Account Number with the Bureau of Corporations and Charitable Organizations.
In Person or Courier
Drop your finished application and payment off at 401 North Street, Room 206, Harrisburg, PA 17120.
The Department of State processes filings in the order that they’re received, regardless of submission method, and processing typically takes 7-10 business days. If you can’t wait that long, there are three expedited processing options: same-day service ($100), three-hour service ($300), and, for extreme time-crunch situations, one-hour service ($1,000).
Step 4: Create an Operating Agreement
The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.
Even though your LLC isn’t required to adopt an operating agreement in Pennsylvania, doing so provides the procedural underpinning and legal safety net vital to your business success. Without an agreement in place, your company will lose legitimacy in the eyes of courts, banks, and other businesses, so think long and hard before you kick off business activities without one.
Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decided to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to tax structure.
If you’ve decided to draft an agreement, there are two ways to go about it:
- Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but we recommend getting one through ZenBusiness, which includes a free LLC operating agreement with every package. This will save you a lot of time and money.
- Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with commonwealth law, includes all necessary information, and avoids the commonwealth’s default laws.
What are default laws?
Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the commonwealth will make that decision for you.
Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.
Step 5: Get an EIN
There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.
Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation or partnership, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.
The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:
Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.
You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.
Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Okay, so you’ve filed the Certificate of Organization, designated a registered office, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!
Step 6: Taxes, Licensing & Income Reporting
For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep a Pennsylvania LLC running smoothly and in good standing with the commonwealth.
Before you start doing business, create a plan for the following potential LLC requirements:
As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.
Fortunately for your LLC, Pennsylvania’s income taxes are equally simple. They operate much like federal ones do “passing through” to be reported on the owner’s personal return. Plus, the commonwealth doesn’t impose any “franchise” or “privilege” taxes on its LLCs, so you won’t have to worry about that either.
But don’t celebrate just yet, because you’re not completely in the clear. Your LLC may be responsible for more specific commonwealth taxes based on its circumstances. For example, if you sell merchandise, it must pay a Sales Tax and Use Tax. And if you hire employees, it will owe a Withholding Tax and an Unemployment Compensation Tax. The Pennsylvania Online Business Entity Registration is your one-stop shop to register for any of these taxes that might apply.
Plus, depending on your LLC’s location, it may owe a local tax to its city, municipality, or county. Consult your local government’s website to find out.
The Certificate of Organization may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.
As an example, a car dealership would need to obtain licensure from the State Board of Vehicle Manufacturers, Dealers, and Salespersons. Or, let’s say our friend Fanny wanted to offer massage therapy out of her flower shop. She would need to apply for a license through the State Board of Massage Therapy. Check out the Department of State’s Licensing Services page to find a complete list of required licenses.
Certain cities and counties require their own specific licenses on top of any commonwealth-issued ones, so you should also check with your local government.
Some states require business entities to update their information every year by filing annual reports, but Pennsylvania does not. Unless you run a professional LLC or a foreign LLC that provides professional services, you will not need to submit any type of annual filing.
And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your Pennsylvania LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.
Need Help Creating Your LLC?
If you even skimmed this guide to look over the steps, you likely got a sense of how many moving parts there are when starting an LLC. Can you do it all yourself? Absolutely. We have complete confidence in you.
But if you’d rather hand it off to someone else and not have to worry about it again, we recommend using an LLC formation service. This way, you can go about your other business responsibilities with the confidence that everything will be submitted correctly and punctually.
Plus, an LLC formation service can handle maintenance items like Annual Reports, so you can take them off your to-do list. And on top of that, many services also provide a registered office.
Sound good? Whether you know that you’ll need an LLC service or you’re just exploring your options, take a look at IncFile and Northwest Registered Agent. These are two of the top services available. And you can take our word for it because we’ve done a whole lot of research on the topic.