STEP 1: Name your LLC
Choosing a company name is the first and most important step in starting your LLC. Be sure to choose a name that complies with Pennsylvania naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines:
- Your name must include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
- Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
2. Is the name available in Pennsylvania? Make sure the name you want isn't already taken by doing a name search on the State of Pennsylvania's website.
3. Is the URL available? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
FAQ: Naming an LLC
What is an LLC?
LLC is short for Limited Liability Company. It is a simple business structure that offers much more flexibility than a traditional corporation, while at the same time providing many of the same benefits. Learn more here.
Or you can watch our 2 minute video, What is an LLC?
Do I need to get a DBA or Trade Name for my business?
Most LLCs do not need a DBA. The name of the LLC can serve as company’s brand name, and you can accept checks and other payments under that name as well. However, you may wish to register a DBA if you would like to conduct business under a name other than that of your LLC. Learn more here.
STEP 2: Choose a Registered Office
You are required to submit the address of your registered office for your Pennsylvania LLC.
What is a Registered Office? A registered office is the official mailing address for all legal mail from the state related to your business. Legal mail can include service of process (if you are sued) and state filings.
Where can my Registered Office be? A Pennsylvania registered office must be a street address within Pennsylvania. You cannot use a PO box for your registered office address.
TIP
Recommended: Northwest Registered Agent provides the first year of registered agent service free with LLC formation ($49 + State Fees)
STEP 3: File the Certificate of Organization
To register your LLC, you will need to file the Certificate of Organization with the State of Pennsylvania. This can be done online or by mail.
When filing, you will need to state whether your LLC will be member-managed or manager-managed. We recommend learning more about these two options before you file.
File the Certificate of Organization
OPTION 1: File Online with the State of Pennsylvania
OR
OPTION 2: File by Mail or In-Person
Download Both PDF's to get started:
State Filing Cost: $125, payable to Commonwealth of Pennsylvania (Nonrefundable)
Mail to:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105
If you’re expanding your existing LLC to the State of Pennsylvania, you need to form a Foreign LLC.
STEP 4: Create an Operating Agreement
An operating agreement is not required in Pennsylvania, but it's a good practice to have one.
What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.
Why are operating agreements important? An operating agreement is an important document because it ensures that all business owners are on the same page and reduces the risk of future conflict.
For more information on operating agreements, read our Pennsylvania LLC operating agreement guide.
Recommended: Use our free Operating Agreement Tool to draft a customized operating agreement for your LLC.
FAQ: Creating an Operating Agreement
Do I need to file my operating agreement with the state?
No. The operating agreement is an internal document that you should keep on file for future reference. However, many states do legally require LLCs to have an operating agreement in place.
STEP 5: Obtain an EIN
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.
Why do I need an EIN? An EIN is required for the following:
- To open a business bank account for the company
- For Federal and State tax purposes
- To hire employees for the company
Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.
NOTE
FOR INTERNATIONAL APPLICANTS: You do not need an SSN to obtain an EIN. Learn more here.
Get an EIN
Option 1: Request an EIN from the IRS
OR
Option 2: Apply for an EIN by Mail or Fax
Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax:
(855) 641-6935
Fee: Free
FAQ: Getting an EIN
How do I get an EIN if I don’t have a social security number?
An SSN is not required to get an EIN. You can simply fill out IRS Form SS-4 and leave section 7b blank. Then call the IRS at 267-941-1099 to complete your application. Learn more here.
What tax structure should I choose for my LLC?
When you get an EIN, you will be informed of the different tax classification options that are available. Most LLCs elect the default tax status.
However, some LLCs can reduce their federal tax obligation by choosing S corporation status. We recommend consulting with a local accountant to find out which option is best for you.
Considering Using an LLC Formation Service?
We reviewed and ranked the top 5 LLC formation services.
Find out which is best for you.
State Taxes for your Pennsylvania LLC
Depending on the nature of your business, you may be required to register for one or more forms of state tax:
- If you are selling a physical product, you’ll typically need to register for a seller's permit thorugh the State of Pennsylvania website.
- If you are selling a physical product, you’ll typically need to register for Pennsylvania Sales Tax. Your sales tax registration needs to be renewed every 5 years.
- If you have employees in Pennsylvania, you will have to register for Unemployment Insurance Tax and Employee Withholding Tax on the State of Pennsylvania website.
Business Banking for Personal Asset Protection
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
You can protect your business with these two steps:
1. Opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital later on.
Recommended: Compare business credit card offers at CreditCards.com. Learn more.
Accounting for your LLC
Even if you haven’t officially opened for business – it’s critical to get your books in order. A well managed accounting system will help you:
- Track your business finances, including bills, expenses, and income.
- Simplify your annual tax filings.
The right software makes accounting easy. Look for software that:
- Syncs with your bank automatically.
- Matches transactions to invoices, bills and purchase orders.
- Can be accessed from your phone.
Recommended: FinancePal is a one stop shop to meet all your accounting and tax filing needs.
Pennsylvania Business Permits and Licenses
To operate your LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.
Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.
Find out how to obtain necessary licenses and permits for your business or have a professional service do it for you:
Federal: Use the U.S. Small Business Administration (SBA) guide.
State: Use the Pennsylvania Department of State's website.
Local: Contact your local county clerk and ask about local licenses and permits.
Recommended: If you are a first-time entrepreneur, consider having a professional service research your business’ licensing requirements. Our friends at Startup Savant have reviewed and ranked the top five license research services.
Insuring Your Business
Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:
- General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
- Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Pennsylvania, businesses with one or more employees, excluding business owners, are required by law to have workers compensation insurance. Get a free quote with ADP.
How much will the right insurance cost you? Click here to find out.
Hiring Employees
If you plan to hire employees, stay compliant with the law by following these steps:
- Verify that new employees are able to work in the US
- Report employees as "new hires" to the State
- Provide workers' compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your work space
Find more information at the Pennsylvania Department of Labor & Industry.
Recommended: A payroll service saves you time and makes it easier to follow these requirements.
We understand that creating an LLC and getting your business up and running comes with many challenges. To help you succeed, we compiled the best local resources in every major metro area in Pennsylvania. You can get free assistance in the following areas:
Pennsylvania requires LLCs to file a decennial report with the Pennsylvania Department of State. This form can be submitted by mail.
File your Decennial Report
File by Mail with the Pennsylvania Department of State
Fee: $70 (Nonrefundable)
Mail to:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105
For more information, see the Department of State's Decennial Report FAQ.
How to Obtain a Certificate of Good Standing
A Certificate of Good Standing, known in Pennsylvania as a Certificate of Subsistence, verifies that your LLC was legally formed and has been properly maintained. Several instances where you might need to get one include:
- Seeking funding from banks or other lenders
- Forming your business as a foreign LLC in another state
- Obtaining or renewing specific business licenses or permits
You can order a Pennsylvania LLC Certificate of Subsistence online.
Order a Certificate of Good Standing
Request a Certificate of Subsistence Online
Fee: $40 (Nonrefundable)
Dissolve Your Pennsylvania LLC
If at any point in the future you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your LLC, there are two broad steps:
- Close your business tax accounts
- File the Articles of Dissolution
When you are ready to dissolve your LLC, follow the steps in our Pennsylvania LLC Dissolution Guide.
More Information
Report LLC Income
Most LLCs will need to report their income to the IRS each year using:
- Form 1065 Partnership Return (most multi-member LLCs use this form)
- Form 1040 Schedule C (most single-member LLCs use this form)
Read our LLC Tax Guide to learn more about federal income taxes for LLCs.
Avoid Automatic Dissolution
LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines, and even submitting reports on your behalf for an additional fee.
Recommended: Northwest offers a reliable registered agent service and excellent customer support.
Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in Pennsylvania, you will need to register as a foreign LLC. This can be done by mail.
Register as a Foreign LLC in Pennsylvania
File by Mail with the Pennsylvania Department of State
Download Both PDF's to get started:
Fee: $250 (Nonrefundable)
Mail to:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105
