If you want to learn how to form an LLC in Pennsylvania, you’ve come to the right place. We cover everything you need to know in this step-by-step guide so that you can ensure it is done correctly to prevent issues from arising in the future.
Ready to get your Keystone State business off the ground? Then let’s begin.
Pick a Name for Your Pennsylvania LLC
One of the very first things you should do when forming a new business is to choose a name. It’s good practice to choose a name that your potential customers will find easy to remember and pronounce. We also recommend choosing an LLC name related to your business activities. This way, your potential clients and customers will know what you are selling as soon as they hear your name.
Every LLC formed in Pennsylvania must also comply with the Pennsylvania naming requirements and guidelines. So, be sure to abide by the following general guidelines and rules:
- Your chosen LLC name must be unique and distinguishable from other LLCs in Pennsylvania.
- Your name must include the phrase “limited liability company” or its acronym “L.L.C.” or “LLC.”
- Your Pennsylvania LLC name should not include words that confuse your LLC with government agencies and other business entities.
- Restricted words, such as Trustee, University, Attorney, etc., might need additional paperwork and a licensed professional, e.g., a lawyer or doctor, to be part of your LLC.
You should also check your chosen name is available by doing a Pennsylvania business name search.
Finally, check whether your chosen LLC name is available as a URL. This can easily be done by running a web domain search using sites like Namecheap. Be sure to buy the .com version of your web domain to prevent others from acquiring and using it.
Get a Registered Agent
After choosing an LLC name, you must nominate a registered agent for your Pennsylvania LLC. It’s something all LLCs in Pennsylvania are legally required to do. Your LLC’s registered agent is any person or business entity authorized to receive and forward legal and official documents and correspondence on behalf of your company.
While you can appoint yourself or any other LLC member to be a registered agent, there are some requirements that must be met, including being a Pennslyvania resident, available to work during all regular business hours, and being 18+ years old.
If you don’t know where to begin, you can consider one of the following three recommendations for registered agents in Pennsylvania:
Northwest is a popular registered agent company that serves the whole of the US, with hundreds of thousands of satisfied customers and excellent online reviews.
A comprehensive Northwest registered agent package costs just $125, and includes document scanning, mail forwarding, annual report reminders, pre-filled state forms, compliance alerts, and document storage.
Additionally, it is popular for its excellent customer support. For instance, Northwest’s customer support team can always help you with all compliance and registered agent issues.
Northwest is a great choice if you own multiple businesses. If you purchase Northwest’s registered agent package in more than four states, you get a discounted annual fee of only $100.
Our second registered agent recommendation for your Pennsylvania LLC is IncFile. It is a reputable company that has helped over 800K businesses stay compliant.
When you purchase their registered agent package, you can access tailored SMS and email notifications, a personalized dashboard, and automatic mail forwarding. In addition, you will get regular compliance reminders. This means you will never need to worry about missing deadlines and getting fined or in legal trouble with the state.
IncFile’s’ annual fee for their registered agent services is $119.
Another top option for a Pennsylvania registered agent is ZenBusiness. Ranked #1 across various influential sites, such as MarketWatch and Forbes, you can rest easy knowing that your LLC is in safe hands.
As your registered agent, ZenBusiness will give you access to document scanning, a personalized dashboard, fast turnaround, and email notifications.
ZenBusiness’ annual fee for their registered agent services is $199.
Register Your Business
After hiring a registered agent, the next step in forming your Pennsylvania LLC is registering your business with the Pennsylvania Department of State.
The simplest and fastest way to register a business in Pennsylvania is by filing an Article of Organization online via the Pennsylvania Business Formation System, which takes between five and six weeks. You must create an account using your LLC name and an active email address. You will also need a payment option to complete your purchase. The state fee for filing an Article on Organization online in Pennsylvania is $125.
You can also register your business in Pennsylvania via mail by downloading the Pennsylvania Certificate of Organization Form and filling in the required information. You will need to mail the copy together with the Docketing Statement Form and the filing fee of $125 to the following address.
Bureau of Corporations and Charitable Organizations: Pennsylvania Department of State
P.O. Box 8722
Harrisburg, PA 17105
Either way, the Article of Organization for your LLC in Pennsylvania must include the following details:
- The purpose of your Pennsylvania LLC
- The registered LLC name and physical address
- The correspondence name and email address
- The name, address, and signature of the appointed registered agent
- The effective date of your Pennsylvania LLC.
Draft an Operating Agreement
An Operating Agreement is an internal document that defines how your Pennsylvania LLC will run. This includes outlining the roles and responsibilities of each member, the management structure of your LLC, the operating procedures, and the ownership over the LLC.
While the Pennsylvania Department of State does not require LLCs to have an Operating Agreement, we recommend creating one as it goes a long way in helping LLC members agree on business procedures, preventing legal issues, and solving conflicts among members.
A well-drafted Operating Agreement for your Pennsylvania LLC must include the following critical information:
- The LLC management structure and style
- The management details, including how meetings will be held and voting rights
- The profit and loss distribution
- Roles, duties, and responsibilities of each member.
- The ownership percentage of each member.
- Procedures for adding and removing members.
Acquire Licenses and Permits
You may require a business license and permit to run your LLC in Pennsylvania, depending on your business industry. These include local licenses, regulatory permits, sales tax permits, professional licenses, health and safety licenses, environmental licenses, and zoning permits.
At a minimum, you will need to obtain a sales tax permit, which is a state requirement for all LLCs or business entities selling taxable goods and services. You can check with the Pennsylvania Business Licenses page, which lists most licenses and permits you will require for your Pennsylvania LLC. You may also want to check with your county or local city clerk to make sure you get the proper licenses and permits for your specific business entity.
Get Federal and State Tax IDs
A Federal and State Tax ID is like a Social Security Number or Employee Identification Number for your LLC. You will require a Federal and State Tax ID to get credit cards, pay income tax, file LLC tax returns, and open a business bank and credit account.
However, there are some instances where your LLC may not need a Federal and State Tax ID. For example, if you have a single-member LLC or do not have plans to hire employees, you can use your Social Security Number instead of obtaining a Federal and State Tax ID.
Open a New Business Bank Account
It is vital to maintain separate liability between the LLC owner and their business. Failure to do this may result in your business being dissolved. That is why we recommend opening a business bank account for your Pennsylvania LLC.
It is easy to open a business bank account in Pennsylvania. You only need to visit your preferred bank with the following documentation and information:
- The Federal and State Tax ID of your LLC.
- Your LLC’s Article of Organization or Certificate of Formation
- The LLC’s Operating Agreement
- The date your Limited Liability Company was formed.
Some banks may also require you to have a minimum initial deposit amount. There are many financial institutions in Pennsylvania, but the following three banks may be suitable:
Buy Pennsylvania Business Insurance
You may be required to obtain proper business insurance policies depending on the nature of your Pennsylvania business. General liability insurance is one of the most common types of insurance purchased by most LLCs in Pennsylvania. It protects the business against lawsuits and claims of personal injuries and property damages.
If you plan to hire employees, your LLC will be legally obliged to purchase workers’ compensation insurance. It covers employees against on-the-job illnesses, injuries, and even death.
If you offer professional services, such as plumbing, accounting, etc., you must purchase a professional liability insurance policy. This insurance covers the costs if a client/customer sues your LLC for offering subpar services or negligence.
Get a competitive quote for your business insurance needs by visiting a comparison site like Insureon.
Accelerate Things with an LLC Formation Package
If you find forming an LLC in Pennsylvania daunting, complex, or time-consuming, you can hire a commercial LLC formation service provider to streamline and speed up the process.
The good thing is that many companies offer LLC formation packages. One great example is LegalZoom. Its Basic LLC formation package is entirely free except for the state filing fee. With this package, you will get access to all the essential tools and services to form your LLC in Pennsylvania. You can also opt for its paid packages: The pro formation package ($249 plus state filing fee) or the Premium formation package ($299 plus state filing fees).
Another great LLC formation company is ZenBusiness. Its Starter LLC formation is free of charge, excluding the state filing fees. It includes all the essential tools to form your LLC in 2-3 weeks. In addition, with its Pro package ($199 plus state filing fee), you will have your Pennsylvania LLC formed in 4-6 business days. Moreover, its Premium package costs $299 plus state filing fees, and your LLC will be formed in 1-2 working days.
FAQs About Forming an LLC in Pennsylvania
How Long Will It Take to Form My Pennsylvania LLC?
You can get your Pennsylvania LLC formed in 5-6 weeks if you file your Article of Organization online. On the other hand, mail filing will take eight weeks for your LLC to be formed.
How Much Does It Cost to Set Up an LLC in Pennsylvania?
It costs $125 to form an LLC in Pennsylvania. This is the fee for filing an Article of Organization with the state. There may be additional costs for obtaining the relevant licenses, purchasing insurance policies, etc.
Can I Act as my Own Registered Agent in Pennsylvania?
Yes, you can nominate yourself as a registered agent for your Pennsylvania LLC. However, there are some requirements for being a registered agent in this state that you should consider. These include being at least 18 years old with a permanent street address in Pennsylvania. You must also be available to work during all regular business hours in Pennsylvania.
Can I Form a Single-Member LLC in Pennsylvania?
Yes, you can seamlessly form a single-member LLC in Pennsylvania by following the steps and guidelines outlined in this article. You must also comply with the state requirements for forming a single-member LLC.
Get Your Pennsylvania off the Ground Today
Forming your Limited Liability Company (LLC) in Pennsylvania is a huge step in starting your business. While the process’ legalities can be daunting, it only comes down to a few straightforward steps. If you take your take and complete each step carefully, you will have your LLC formed correctly.
However, if you find everything time-consuming and challenging, you can hire an LLC formation company to streamline and speed up the process on your behalf.