A limited liability company (LLC) is a great business structure for anyone looking to protect their personal assets. It offers the liability of a corporation with the freedom of sole proprietorship.
If you want to form an LLC in Pennsylvania all you need to do is follow these 6 steps:
How to Form an LLC in Pennsylvania – A Step-by-Step Guide
Forming an LLC in Pennsylvania is straightforward, just need to make sure you follow each step correctly so there are no errors in your application.
Any mistakes or discrepancies will slow down the process, or worse, the Pennsylvania state could deny your application. If you’re lacking confidence in following each step we’d advise hiring experts to file all your business paperwork for you (a more worry-free approach).
Otherwise, if you’re a do-it-yourself kind of person follow these 5 initial steps:
1. Name your Pennsylvania LLC
Pennsylvania has specific rules on naming your business and you want to make sure you meet all the requirements before applying. Under Pennsylvania law, your LLC has to be unique – which means you’re the only business operating under this name.
Before checking to see if you’re desired business name is available, to abide by Pennsylvania LLC law, make sure the name of your company contains one of the following:
- LLC (most common)
- Limited Liability Company
- Limited Liability Co
- Liability Co
For example, if you want your business name to be ‘GreenFox,’ it would have to be registered as ‘GreenFox LLC,’ ‘GreenFox L.L.C., etc.’
Check Name Availability
Once you’ve decided on your name you need to check to see if it’s available and there’s no other company in Pennsylvania using it. The quick and easy way to do this is by doing a quick google search using your desired name.
If after that, you don’t find any competing companies you can move onto the next step – checking your business’s potential name through Pennsylvania’s government online record searches.
If your name is available, but you’re not ready to file for your LLC yet, you can reserve the name through a Name Reservation form. The reservation lasts 120 days and costs $70 to file. You can apply online through the Pennsylvania Department of State’s application portal or by mailing it in.
Using a Fictitious Name
If you don’t want to use LLC in your business name then once your business is registered you can add a fictitious name. Also known as DBA (“doing business as”), or a trade name, a fictitious name allows you to run your business under a name that’s not the legal LLC registered name.
You can also use a fictitious name if you plan on running several different businesses under your LLC formation.
If you want to submit a fictitious name for your LLC business you need to register the name with the Pennsylvania state. To register a fictitious name costs $70.
Registration of Fictitious Name Application Form
Once you’ve figured out what your business name is and you’ve made sure it’s still available, the next step is to choose a registered agent who will help you with the legal side of your business.
2. Choose Pennsylvania Registered Office
In Pennsylvania, every LLC needs to have a registered office. A registered office is the official mailing address for any legal mail that has to do with your business. This includes state filings or legal papers (for example, if your company was ever sued).
The registered office acts as the main point of contact between your company and the Secretary of State. In other states, a registered office is called a registered agent, but they are responsible for the same thing.
An LLC registered office can be any of the following places
- Home address
- Office address
- Friend/family member’s address
- The office of a Commercial Registered Agent
Whoever you decide to use as your registered office they need to have a street address in Pennsylvania (not a P.O box).
Why you may want to use a commercial registered agent
While the easier route seems to have yourself, or one of your LLC’s members, act as the registered agent, there are some benefits in hiring a professional. Hiring a registered agent (as your registered office) will ensure your business is always in good standing with the state, helping you stay organized and up-to-date.
It also adds a layer of protection since they will help you in the case of a lawsuit or any penalties/fines, if this ever happens, going about it alone is not a boat you want to be in.
3. File a Pennsylvania LLC Certificate of Organization & Docketing Statement
Once you’ve decided who’s the best person to be your registered agent the next step is to submit your LLC application.
To create an LLC in Pennsylvania you need to file a Pennsylvania Certificate of Organization application form and submit it to the Secretary of State.
Be prepared to include the following information when filling out the form:
- The name of your LLC
- The physical address of your LLC’s office
- Name and address of your registered office
- The name of each organizer
- signatures of all the LLC’s organizers
Along with your certificate of organization form, you’ll need to fill out and send the Pennsylvania docketing statement, which is a supplement form needed in support of your application. You’re required to outline basic information about your company such as:
- Your business name
- Who is responsible for the initial tax report
- Business address
- Description of Business Activity
- EIN (Employer Identification Number)
- Fiscal Year-End
Important Note: You won’t have your EIN until after your LLC has been approved. While an EIN is requested on the docketing statement you shouldn’t get one before you have approval. Don’t worry though, if you don’t put down an EIN on the application all you need to do is update the information in your Penn state account (see registration steps below). If you’re using a registered agent this is something they can help with.
The filing fee for your LLC certificate and docketing statement is $125 and there are 2 ways to submit it – by mail to the Secretary of State or through the Penn State Keystone portal. To register with the online portal you’ll need to create a username and password then follow the prompts to submit your LLC application. It takes between 7-10 business days to get approved.
While you’re waiting for approval you can move onto step 4 – creating an LLC Operating Agreement. If you’re operating your LLC by yourself skip to step 5.
4. Create Pennsylvania LLC Operating Agreement
If your LLC has two or more members, it should have an operating agreement. Although it’s not required, it’s recommended as it will outline how the business is structured and how it will operate among its members.
Some of the sections you’ll typically find covered in an operating agreement include:
- Capital distributions
Again, while this is not a necessary step, as you don’t have to mail it to the secretary of state, it is recommended if your LLC has more than 2 members. It helps clarify the rules of your LLC and makes sure they are legally documented.
After you’ve agreed and created an LLC Operating Agreement the next and final step is to create your unique employer identification number.
5. Apply for your Pennsylvania LLC Employer Identification Number (EIN)
Once your LLC has been approved you’ll need to get an employer identification number (EIN).
An EIN is a federal tax ID number that registers you with the Internal Revenue Service (IRS). This number is used to identify your company when filing taxes.
How to register for an EIN in Pennsylvania :
- Apply online or,
- fill out the Employer Identification Number form and fax it to 855-641-6935, or mail it to:
Internal Revenue Service,
Attn: EIN Operation,
If you apply online you’ll get instant approval. If you apply by fax it takes up to 4 business days whereas mailing it in takes up to 4 weeks. Applying for your EIN is completely free, just don’t forget to update your EIN in your docketing statement.
After step 5, most companies have completed their LLC registration. However, if you’re a licensed professional there’s still one step left to do.
6. File Annual Registration (Licensed Professionals Only)
If you’re a licensed professional (or a foreign LLC) you are expected to file an annual certificate of registration. It needs to be filed yearly before April 15th and you can submit it through Pennsylvania’s Keystone portal or by mailing it in. It costs $560 for each LLC member.
If your LLC falls under what of these categories you’re expected to submit an annual certificate:
- Medicine and surgery
- Osteopathic medicine and surgery
- Podiatric medicine
- Veterinary Medicine
- Public accounting
If you’re using a registered agent, this is something they can help with.
Pennsylvania LLC Registration – Final Checklist & Summary
Ready to get started? Use this simple checklist to make sure you’ve dotted your i’s and crossed your t’s!
- Name your LLC – Your business name must include LLC, L.L.C., or Limited Liability Company and can’t be used by any other business in Pennsylvania. Make sure you confirm the availability of your business name through Pennsylvania’s government online record search.
- Choose a Registered Office – A registered office is the official mailing address for any legal mail that has to do with your business. This includes state filings or legal papers. Whoever you decide to use as your registered office need to have a street address in Pennsylvania. You can designate a home address, office address, or use a commercial registered agent.
- File a Pennsylvania LLC Articles of Organization & Docketing Statement – Complete the Pennsylvania Certificate of Organization form and submit it along with the Pennsylvania docketing statement. You can file both forms together, online through the Penn State Keystone portal, or mail them directly to the State. It costs $125 and takes around 7-10 business days to get approval.
- Create Pennsylvania LLC Operating Agreement – If your LLC has two or more members, you should create an LLC operating agreement that outlines how the business is structured, who is responsible for what, and how much of the LLC each person owns. You don’t have to send your operating agreement to the Pennsylvania state but you should have one so everything is documented and signed by all members.
- Apply for your Pennsylvania LLC Employer Identification Number (EIN) – Once you get approval for your LLC you need to apply for an employer identification number (EIN) through the IRS. This number is used to identify your company when filing taxes. You can apply online for free and approval is instant. Once you have your EIN don’t forget to add it to your docketing statement. You can do this through the Keystone portal or have your registered agent handle it for you.
- File Annual Registration (Licensed Professionals Only) – If you’re a licensed professional (or a foreign LLC) you need to file an annual certificate of registration. File it yearly before April 15th (you can submit it through Pennsylvania’s online portal or by mailing it in). It costs $560 for each LLC member.
While there are a few different pieces to making sure your LLC is filed correctly, make sure you follow each step as stated so there are no errors. If you can, we recommend going through service to make sure your LLC gets set up correctly from the get-go.
If you’re taking the time to form an LLC then make sure you do your homework and choose one of the best LLC services for your business.
Our first recommendation is to go with ZenBusiness, an LLC creation service that holds your hand from start to finish. Packages start as low as $49.
How To Apply for a Pennsylvania LLC Online
Now that you know the exact steps on what’s needed to form your LLC it’s time to start the application process. There are two ways of going about this:
1. Do it Yourself
Taking the DIY route is a good option if your budget is tight or you’ve previously opened an LLC and understand how it works.
2. Use an Online Formation Company
Using an online formation company is a better option if it’s your first time opening up an LLC and if it’s within your budget (formation services cost anywhere between $49 – $199). This is typically a better choice if you want to avoid headaches and have peace of mind knowing professionals are handling everything for you.
If using a professional service is more up your alley, here’s our top 3 recommendations:
ZenBusiness built its platform to meet the needs of your business throughout its lifetime. When you pay for their services, you’ll receive a personalized dashboard to your business to store documents, receive alerts, and manage your website.
ZenBusiness charges based on a tier system. There are three different tiers with pricing as follows:
- The Starter = $49 annually
- The Pro = $199 annually
- The Premium = $299 annually
IncFile provides you with a full suite offering startup services to best support your business formation.
Their pricing model also depends on the state you are filling. You can generate a personalized quote on their website by entering in the necessary information of your business.
LegalZoom is an online legal service provider that helps you to be able to create legal documents without having to pay the expensive lawyer fees. Some of the services they provide assistance to include business formation, copyrights, and trademarks.
LegalZoom has many different pricing options available. For their LLC service, pricing begins at $79 + the allotted state fee.
After Starting Your Pennsylvania LLC
You’ve been approved – now what? The journey doesn’t stop here – there’s still a handful of things you need to do in order to get your business off the ground. We recommend ticking off the following items to make sure your LLC gets off on the right foot.
Purchase A Domain For Your Business
Having an online presence, even if your business is local, is important in creating trust, professionalism and a way for people to find you. If you haven’t already thought about getting a website, now’s the time. In a tech-saturated world you need a domain to not only attract new customers but help create a good first visual impression of what your business does and how it can help.
Get A Business Phone Number
Since your business is now an approved Pennsylvania LLC you should think about getting a business phone number. Having a business number is a great way to show your professionalism to your clients and customers. It makes you more serious and more importantly – more trustworthy.
There’s a variety of different online phone services you can go with, or you could go the traditional route and open an account through a local branch. You can get a local number or a 1-800, the options are endless!
Open Your Pennsylvania LLC Business Bank Account
You’ll want to open a business account that’s separate from your personal banking. This will not only make accounting easier but you won’t have to worry about your personal finances mixing in with your business finances.
USA Business Bank Accounts
If you already have online banking through your personal bank account it might be easier to open a business account through your current bank so all your banking (although in separate accounts) will be accessible in the same place.
If you prefer to open a new account keep these checking accounts in mind:
Chase – Free checking account with no extra fees – as long as you keep a $1,500 minimum balance.
BlueVine – Free checking account with mobile banking and a debit MasterCard.
Bank Novo – Open a free checking account with Free transfers and free ATM fees.
Centric Bank – Open a personalized business checking account, plans are customizable based on your industry.
PSECU – Pay bills and accept deposits with a free checking account. No minimum balance required no monthly check limits, no monthly service charge.
Along with your business checking account, you should apply for a business credit card too.
Having a business credit card is a good way to establish your business credit score (which may help if you ever need a loan). It also makes it easier for online purchases and again, it will keep your personal and business finances separate.
Find Accountant/Buy Accounting Software
Taxes get complicated fast and can be a burden to deal with. We recommend getting an accountant or using accounting software to make sure all your spending actions are being tracked (payroll, bills, invoices, receipts, etc.).
Here are some popular options to look into:
Wave – Free invoicing & accounting software with credit card processing & payroll services.
Intuit Quickbooks – Online accounting software to track expenses, customize invoices, and run reports.
Freshbooks – Accounting software to send invoices, track time, manage receipts, expenses, and accept credit cards.
Directory of Federal Tax Return Preparers with Credential – If you want to use a local tax specialist you can search for a certified public accountant (CPA) through the IRS online directory.
Having all of your business reports in one spot is highly beneficial so you can keep an eye on your cash flow. To run a successful business you’re going to need to analyze how your business is performing and narrow down what’s working or what isn’t working so there’s always room for growth.
Pennsylvania LLC Decennial Report
A decennial report updates your certificate of organization and makes sure your LLC still exists. Its main purpose is to verify all your LLC information is correct and the state of Pennsylvania has the most recent information on file in case anyone from the state ever needs to contact you. You only have to update it once every 10 years and it costs $70 to file. You can apply online, by mail, or have your registered agent file it for you.
You need to file your report every 10 years starting in years that end in 1 (2021, 2031, 2041, etc.) If you register your LLC in 2021, or 2022 then your first report gets filed just shy of the 10-year mark. While there are no fees if you forget to file it, the following January (for example, January 2032) your LLC will lose its name.
Notify Pennsylvania Of Any Changes You Make To Your LLC
If at any time you make changes to your LLC you need to inform the state. If you’re using a registered agent they will do this for you. If you’re going about this alone then you can update changes by filling out the Docketing Statement changes form and mailing it in or uploading it in your Keystone portal.
8 Benefits of Forming an LLC in Pennsylvania
When you file your company as an LLC in Pennsylvania, it helps solidify your standing in the business world. This motion shows other businesses and potential customers that you are willing to do what it takes to be a legally operating business.
Choosing to form your business as an LLC in Pennsylvania allows you to take advantage of the benefits of both a corporation and a partnership structure. Some of these benefits include:
1. Protect Your Personal Assets
The LLC will have its liability that does not automatically extend to the owners, unlike a sole proprietor, where you are legally responsible for everything. That means the Pennsylvania LLC protects the liabilities and debts incurred from the business. In most situations, your assets, such as your car, home, or savings, will never be at risk if your Pennsylvania LLC is faced with lawsuits or bankruptcy.
2. Benefit From Business Profit Taxation
In an LLC in Pennsylvania, your profits and losses can pass through to your income without having to have corporate taxation.
3. Simple to Create and Maintain
The formation of a Pennsylvania LLC requires minimal paperwork and requirements. They are known for being easy to start and simple to maintain.
4. Minimal Restrictions
Your business matters can be managed by more than one owner or member while still being one main business to the public. This means all decisions and transactions behind the scenes can be equitably distributed while presenting one entity as you move forward.
5. Heighten Your Credibility
As you move forward, your Pennsylvania LLC will continuously be recognized as an entity. People and other businesses prefer doing business with a legitimate entity because it shows your level of professionalism.
6. Gain Access to Business Loans
When you form your Pennsylvania LLC, you will obtain a DUNS number and build your business credit, helping you to further build upon your business.
7. Benefit From Flexible Profit Distribution
In an LLC, you are not required to spread the distribution of profits equally across the owners. You have full control over profit distribution in your Pennsylvania LLC.
8. Good For Any Kind Of Business
An LLC business structure in Pennsylvania is an excellent choice for both medium and higher-risk level businesses. You might always want to consider opting to go with an LLC if you have a significant amount of personal assets to protect from your company. And lastly, LLCs are great for owners who are interested in paying lower tax rates than corporations.
F.A.Q. About Forming an Pennsylvania LLC
There’s several different steps you’ll need to do to legally form your LLC. It’s a lot of information to take in and can get confusing. To help out we’ve compiled some answers to the most frequently asked questions:
How Much Does It Cost to Start an LLC in Pennsylvania?
Expect to pay $125 to complete the Pennsylvania Certificate of Organization form and the Pennsylvania docketing statement.
How Long Does It Take to Form an LLC in Pennsylvania?
If you register online it takes around 7-10 business days.
Can You Start an LLC on Your Own?
Yes, you can start forming an LLC on your own by following the step-by-step instructions provided in this article. For additional help, look to hire an all-around service provider.
Do You Need a Lawyer to Start an LLC in Pennsylvania?
No, you can start an LLC without a lawyer just be prepared to file and report everything on your own. If you’re not interested in getting a lawyer but want to make sure everything is filed correctly then use an online business formation service, like the ones listed in this article, with ZenBusiness as our #1 recommendation.
Does an LLC Need to Make Money?
No, an LLC doesn’t need to make profits but if you’re claiming tax deductions with no income the IRS will likely audit your business.
What Are The Downsides to Having an LLC?
There are pros and cons to forming an LLC. The pros are tax reductions, protecting your personal assets and creating credibility for your business (and possible future business loans). The main con of an LLC is you’re considered self-employed. This is a disadvantage as you’d
be taxed under self-employment and responsible to pay Social Security and Medicare taxes. The amount you’d be required to pay depends on your business’s total net earnings.