Guide to Getting a Pennsylvania LLC

Want to launch your new company as a limited liability company (LLC)? Pennsylvania entrepreneurs frequently choose this business structure because it offers flexibility and protection of personal assets. 

To form a Pennsylvania LLC, you need to follow a specific process. When completing these steps, it’s important to be accurate and thorough. After all, you want to start your business off on the right foot and remain compliant. 

We know starting an LLC in Pennsylvania may seem more scary than yelling “Go Giants!” at an Eagles home game. But that’s why we’re here to help! Keep reading to discover a step-by-step guide to forming an LLC in the Keystone state. 

Along the way, we’ll also explore how our services help you cut through the red tape, so you can focus on what you do best: running your exciting new business venture. 

How to Start an LLC in Pennsylvania

The reason so many new business owners choose an LLC as their business structure is because it offers flexibility and liability protection. This formation type separates a business owner’s personal assets from the company’s assets. Members (which are what LLC owners are called) can also choose between a member-managed and manager-managed operating structure.

To form a Pennsylvania LLC, you’ll need to register your business with the state. That means filing formation paperwork with the Pennsylvania Department of State (typically referred to as the Secretary of State’s office in other states). This formation paperwork is called a Certificate of Organization. In Pennsylvania, your Certificate of Organization needs to be accompanied by a New Entity Docketing Statement. 

Before filing your documents, however, you’ll need to name your limited liability company and appoint a registered agent. 

Once your formation paperwork is filed, you need to create an operating agreement and obtain an EIN. These steps designate how your business will be managed and set your company up as a legal entity in the eyes of the Internal Revenue Service (IRS). 

LLC in PA: 6 Steps

Below, we’ll show you how to start a Pennsylvania LLC in 6 steps. We’ll also cover a few pro tips to help you set your LLC up for success.

1. Name your LLC
2. Designate a registered office in Pennsylvania
3. File Certificate of Organization
4. Create an operating agreement
5. Apply for an EIN
6. File Pennsylvania BOI report

Note: These guidelines are for forming a domestic LLC in PA. A domestic LLC is a company formed in the same state as the one in which you reside. If you live in a different state but want to form your LLC in Pennsylvania, you’ll need to register a foreign LLC (which will require different steps and fees). 

1. Name your Pennsylvania LLC

The first step in forming a Pennsylvania LLC is to name your business. This is a crucial decision as your business name is the public’s first impression of your company. It should accurately reflect your brand image.

Pennsylvania LLC Naming Rules

When naming your Pennsylvania LLC, you must adhere to certain rules:

• The name must include “limited liability company” or an abbreviation (LLC, L.L.C., Limited, Ltd.).
• Avoid names that imply a corporation or a government agency.
• Ensure the name is not already in use by another business in Pennsylvania.

Registering and Reserving Business Names

Prioritize confirming the availability of your desired business name. Utilize our Pennsylvania business search page for this. Following confirmation, register the name as part of your business formation documents.

Fictitious Business Name

If your business operates under a name different from its registered LLC name, consider applying for a fictitious business name (FBN) or “doing business as” (DBA). To conduct business under an assumed or fictitious name, you’ll need to file a Registration of Fictitious Business Name form (DSCB:54-311) with the Pennsylvania Department of State.

Trademark

To safeguard your business name or logo, you might consider trademarking them. This involves checking availability and filing the appropriate forms with either the Pennsylvania Department of State or the USPTO for broader protection.

Securing a Domain Name

In today’s digital age, having an online presence is essential. Ensure your LLC name is available as a domain and consider securing relevant social media handles to enhance brand consistency and recognition.

2. Designate a Pennsylvania registered office

The next step for starting your LLC is to designate a Pennsylvania registered office. In most states, this is known as a registered agent. Your registered agent is an individual or business entity that receives legal notices on behalf of your business.

Registered Agent Requirements

Every Pennsylvania LLC is required to appoint a registered agent. Your Pennsylvania registered agent must:

• Be a resident of Pennsylvania
• Have a physical mailing address in the state of Pennsylvania (P.O. boxes will not suffice)

Registered Agent Responsibilities

A registered agent’s responsibilities include:

• Being available during regular business hours to receive notices (service of process)
• Accepting legal notices and important government mail

Legally, you are allowed to serve as your own registered agent. However, there are a few reasons why this isn’t the best idea.

For starters, you’re busy running your business. Having to be available during all regular hours to receive legal notices would be quite inconvenient for a business owner.

Secondly, you could be embarrassed in front of clients, investors, or colleagues when being served with subpoenas or notifications of a lawsuit in front of them. For these reasons and others, many LLC owners opt to hire professional services instead.

Registered Agent Services

By using a registered agent service, you can free yourself up to focus on running your business. The benefits of using professional services for your registered agent service include:

• Staying compliant with Pennsylvania’s registered agent requirement
• Knowing all service of process or legal notices will be received and passed along in a timely manner
• Avoidance of embarrassment when served with notice of a lawsuit or legal action against your LLC
• The ability to move your office location without having to update your registered agent’s address

A professional registered agent service can go a long way toward giving you peace of mind and keep your Pennsylvania LLC compliant with the state’s registered agent requirement.

3. File Pennsylvania Certificate of Organization

One of the most important steps to forming your LLC is to file a Pennsylvania Certificate of Organization. This document (also referred to as Articles of Organization in other states) registers your business with the state of Pennsylvania.

Filing such important documentation for your business can be intimidating. Our business formation plans exist to handle the filing for you, and make sure everything is done accurately and efficiently. However, we’ll also walk you through the process below.

Process for filing a Certificate of Organization

You’ll file your Certificate of Organization (Form DSCB: 15-8821) via the Pennsylvania Department of State. After filling in all of the required info, you can submit the form via mail or online along with your $125 filing fee.

To file your Certificate of Organization by mail, or if your specific situation requires it, you can send the completed form along with the filing fee to the Pennsylvania Department of State. The mailing address for the Department of State is:

Pennsylvania Department of State Corporation Bureau

401 North Street, Room 206

Harrisburg, PA 17120

Ensure that your envelope contains all the necessary documents, including the New Entity Docketing Statement and the appropriate payment for the filing fee.

Information to Include in Your Pennsylvania Certificate of Organization

When filling out your Certificate of Organization, you will need to include:

• The name of your Pennsylvania LLC, including the designator (“limited liability company,” or one of the abbreviations listed in Step 1)
• The mailing address of your business (P.O. box is not acceptable)
• Your registered office information
• The name of each organizer/member
• An election for the effective date of the organization (either as soon as the document is approved by the Department of State, or a future-effective date)
• A designation if your LLC is a restricted professional company (for instance, a legal firm, medical office, chiropractor, veterinarian clinic, or accounting office)
• A designation if your business is a benefit company (has the purpose of creating general benefit to the public)
  • If the business is a benefit company, you will also need to check a box if the benefits can be specified, and then list them in detail
• Organizer signatures

New Entity Docketing Statement

Along with your Pennsylvania Certificate of Organization, you are also required to submit a New Entity Docketing Statement (Form DSCB: 15-134A). This form should include:

• Your LLC’s name, including the designator
• The name and mailing address of the individual who is responsible for your LLC’s initial tax reports
• A description of your business activities
• Your LLC’s FEIN (Federal Employer Identification Number)
  • We explain how to obtain an FEIN in Step 5
• The month and year of the tax or fiscal year’s end

Certificate of Amendment

If you need to make changes to your Certificate of Organization after it’s filed, you will need to file a Pennsylvania Certificate of Amendment. Include all of the required information in this form, along with the changes that need to be made, and then submit the form and your amendment filing fee. Need some help? Use our amendment filing services to handle the process quickly and easily.

4. Create an operating agreement

Next, you will need to create a Pennsylvania operating agreement. While an operating agreement is not required by Pennsylvania law, it is crucial in determining how your LLC will be managed and run.

Your operating agreement also helps you to avoid disputes among members by outlining things like allocation of responsibilities and assets.

Operating Agreement Benefits

The benefits of an operating agreement are vast. By laying out all the details about how your company will be run, you can:

• Avoid disputes among members about who is responsible for what
• Customize your business’s rules, policies, and procedures to serve your LLC’s needs and interests
• Further separation of your personal and business assets in the eyes of the court
• Create a plan of succession in case a member dies or leaves the company
• Create a procedure for the event in which you ask another member to leave the LLC
• Define your business’s management structure (member-managed or manager-managed)

What should an operating agreement include? 

Your operating agreement should include all the pertinent details regarding management of your LLC, such as:

• Your LLC’s management structure (member-managed or manager-managed)
• Ownership and responsibility allocation
• Information regarding who has the authority to act on behalf of your LLC
• Policies for owner departure and admitting new owners
• How dissolution will be handled

Make things easier with an operating agreement template

Figuring out what all you need to include in an operating agreement can be overwhelming. That’s why we created a comprehensive, easy-to-use operating agreement template. You can use our template to fill out all the information you need to provide, and rest assured nothing falls through the cracks.

Do I need an operating agreement if I’m the only owner?

If you are the only owner of your LLC, your business is called a single-member LLC. In this case, you may wonder if you even need an operating agreement.

The short answer is that it’s still a good idea. That’s because this internal document does more than lay out allocation of responsibilities and assets among owners. Your operating agreement also dictates what will happen in the event the owner passes away, and rules for adding new members.

Furthermore, your operating agreement can give you a leg to stand on in legal disputes. By showing the courts that you’ve taken the time to draw up a legal document as an LLC, your company will look more like an official business than a sole proprietorship.

5. Apply for an EIN

In order to pay taxes for your LLC, you will need a Employer Identification Number, or EIN. Much like a Social Security Number (SSN) does for individuals, your FEIN identifies your LLC in with the Internal Revenue Service (IRS). This is sometimes also referred to as a Federal Employer Identification Number, or FEIN.

An EIN isn’t just needed for paying business taxes, either. You will also likely need one to conduct other types of business, such as opening a business bank account. Use our EIN services to obtain an EIN for your business today.

7: File the beneficial ownership information report

As of January 1, 2024, all LLCs (and some other small businesses) are required to file a beneficial ownership information report, or BOI report. This requirement was introduced by the Corporate Transparency Act, which strives to counteract illicit financial activities by making it hard for organizations to use shell companies to hide illegal transactions. The Act accomplishes this by requiring all businesses to disclose information about their beneficial owners. 

Under the terms of the act, a beneficial owner is anyone who holds 25% or more of the company’s ownership interest, exerts significant control over the business, or receives substantial economic benefit from the LLC’s assets. When you report your beneficial owners’ information, you’ll be asked to provide the full name, address, and identifying information for each owner.

To file, you can submit online or by uploading a PDF to the Financial Crimes Enforcement Network (FinCEN). The report is free to submit. If you create your LLC in 2024, you’ll have up to 90 days from the date the state approves your Certificate of Organization. LLCs formed before January 1, 2024, have until January 1, 2025. All LLCs formed after January 1, 2025, will have 30 days to submit the form. 
For additional info, please see FinCEN’s website. Our BOI filing report service can help with this step.

Next Steps After Forming a Limited Liability Company

1. Register for Pennsylvania business taxes

Depending on your specific business activities, your LLC may need to report things like sales and use tax or employer withholding. In order to register your LLC for state tax and employer accounts, you’ll need to complete the Pennsylvania Enterprise Registration Form (PA-100).

This form enables Pennsylvania LLCs to establish multiple accounts, including:

• Employer Withholding Tax (1099)
• Promoter License
• Public Transportation Assistance Tax License
• Sales, Use, Hotel Occupancy Tax License
• Tobacco Product’s License
• Transient Vendor Certificate
• Unemployment Compensation
• Use, Tax, Wholesaler Certificate
• Vehicle Rental Tax

Electronic Tax Information and Data Exchange Service

Employers can file and pay state taxes online by using Pennsylvania’s Electronic Tax Information and Data Exchange Service (eTIDES).

2. Open a business bank account

Opening a business bank account is another important task when starting an LLC in PA. By opening a business bank account, you can avoid commingling funds and keep your personal finances and business finances separate. You may also want to obtain a business credit card for this purpose.

When it comes to managing your business’s finances, you have a lot to juggle. You can use ZenBusiness Money to manage everything from invoices to tracking tax-deductible expenses all in one place.

3. Obtain any necessary business licenses or permits

Depending on your industry, you may also need to obtain any necessary business licenses or permits. This step isn’t necessary for all Pennsylvania LLCs, but is instead industry-dependent.

For example, insurance agents will need the proper licensure to bind insurance policies in Pennsylvania. Anyone selling alcohol will need the appropriate license for their business, etc.

If you want to check and see if you’ll need a business license in your industry, use our business license report service. You can also check with the Pennsylvania Department of State.

4. Consider S Corp status

One of the main benefits of the LLC business structure is its flexibility. That flexibility also shows up in the fact that LLC owners can choose how they want their business to be taxed.

By default, LLCs are taxed as either a partnership or a sole proprietorship, depending on whether they have one or multiple members. However, LLCs may opt to be taxed a C corporation or S corporation if it benefits them financially.

It’s true that a C corporation is taxed twice (once on the company tax return and once on the individual’s tax return). However, filing as a C corporation can also result in tax deductions that still save an LLC owner money in certain cases for certain LLCs. For example, insurance premiums can be written off as a business expense.

S corporation is short for “Subchapter S Corporation.” This structure is geared toward small businesses. Like a standard LLC, S corps have pass-through taxation. But there’s another bonus, they can also save you money on self-employment taxes.

This is because S corps allow you to be an “employer-owner,” and split your income into your salary and company profits. That means you pay self-employment taxes on your salary, but not your company profits. (Those profits will still be subject to income and other taxes, of course.)

The drawback is that the IRS scrutinizes S corps more closely. That means you are more likely to get audited as an S corp.

While you may save money filing as an S corp, we must stress that taxes are extremely complicated. To understand what would best benefit you and your LLC, it’s best to consult with an accountant or tax professional before making decisions regarding how to file.

5. File your decennial report

Another big part of staying compliant in the state of Pennsylvania is filing your decennial report. A decennial report (commonly known as an annual report in other states) is required for all businesses that operate in the state of Pennsylvania.

Your decennial report must be filed every 10 years, in the year ending in “1” (2011, 2021, 2031, etc.). A decennial report lets the state know that your business still exists and whether anything with your business has changed. To file your report, you’ll complete the Decennial Report of Association Continued Existence. You will then submit your form and filing fee to the Pennsylvania Department of State. We can also take care of this part for you with our annual report filing service.

Tax Credits for LLCs in Pennsylvania

Understanding the available tax credits and incentives is crucial for LLCs in Pennsylvania, as they can significantly benefit your business financially.

Available Tax Credits and Incentives

1. Keystone Innovation Zone (KIZ) Tax Credit: This credit, up to $100,000 annually per company, is applicable to businesses located in designated KIZs in Pennsylvania. It is applied against the KIZ company’s tax liability under the Pennsylvania Tax Reform Code of 1971​​. More information can be found in the Keystone Innovation Zone Tax Credits Fact Sheet provided by the Pennsylvania Department of Community and Economic Development​​.
2. Research and Development (R&D) Tax Credit: The R&D tax credit in Pennsylvania is based on qualified research expenses, aligning with the federal R&D tax credit definitions. It offers 10% or 20% of Pennsylvania qualified research expenses over a base amount, depending on the business size. This credit can be used against various taxes and is also transferable​​. Additional qualifications for the R&D tax credit can be found on the Pennsylvania Department of Revenue’s website​​.
3. Employment Incentive Payments (EIP) Tax Credit: The EIP tax credit is detailed under the Pennsylvania Code, Chapter 2, and is available for employers who hire certain welfare recipients, with an additional tax credit for providing day care services for the employees’ children​​. The EIP credit is equal to a percentage of the first $6,000 of qualified first-year wages for up to three years of employment. Employers can use this credit against 90% of their tax liability, with the possibility of carrying over excess credits for up to three years​​. The details of how to apply for the EIP credit, including the criteria for eligible employees and the credit amounts, are provided on the Pennsylvania Code website​​.
4. Work Opportunity Tax Credit (WOTC): This federal tax credit is available to Pennsylvania employers for hiring individuals from specific target groups facing significant employment barriers. Employers need to obtain certification for the individual’s eligibility and can earn a tax credit based on the employee’s first-year wages. The specific amounts and eligibility requirements are detailed on the Pennsylvania Department of Labor & Industry’s website.

Apply for Tax Credits with the Pennsylvania Department of Revenue

To apply for these tax credits, LLCs should submit the necessary forms and supporting documents to the Pennsylvania Department of Revenue. The application process and eligibility criteria can vary, so it’s essential to consult with a tax professional or accountant for guidance. These tax credits not only help in reducing tax liabilities but also support the growth and development of your business in Pennsylvania. Being well-informed about the available state-specific incentives can be a crucial aspect of your business’s financial strategy, contributing to overall success and sustainability.

Types of Pennsylvania LLCs

You have several options when it comes to forming an LLC in Pennsylvania. Here’s a breakdown of the different types:

Domestic LLC: A domestic LLC is one that’s formed within the borders of Pennsylvania.

Foreign LLC: If you’ve formed your business outside of Pennsylvania and want to do business within the Commonwealth, you’ll need to register as a foreign LLC. For more information on how to do that and what constitutes doing business in Pennsylvania, see our Pennsylvania foreign qualification page.

Single-member LLC: A single-member LLC is one that has only one member (owner).

Multi-member LLC: As the name suggests, a multi-member LLC is one with more than one member.

Member-managed LLC: When an LLC is managed by its members, it’s known as a member-managed LLC. This management system works best when there are just a few members who all take part in running the business.

Manager-managed LLC: If an LLC has many members and/or some members that don’t want to take part in running the business, the members may choose to make it a manager-managed LLC. With this paradigm, the members appoint one or more members to serve as manager(s) or hire a manager from outside the LLC membership.

PLLC: A Pennsylvania professional limited liability company (PLLC) (also known as a restricted professional LLC) is a specialized legal structure designed for professionals in certain licensed fields, such as doctors, lawyers, accountants, and architects. It offers limited liability protection to its members, shielding personal assets from business liabilities, while allowing professionals to practice their licensed professions within the state.

Benefit LLC: A Pennsylvania benefit LLC, also known as a public benefit limited liability company, is a unique legal entity that combines aspects of a traditional LLC with a commitment to achieving a specific public benefit or purpose. While it operates as a for-profit entity, a benefit LLC is legally obligated to consider the broader social or environmental goals outlined in its Articles of Organization. This innovative structure allows businesses to pursue profit while also making a positive impact on society or the environment, and it requires accountability and transparency in achieving its stated public benefit objectives.