Forming an LLC in Pennsylvania (or anywhere else in the country) can be scary, especially if this is your first time trying to set up a business entity. It isn't as straightforward as choosing a business name. But once you've learned how to start an LLC in PA, you'll understand why many big and small business owners choose this kind of business structure.
The best LLC formation service we reviewed can help you go through forming an LLC, so be sure to check our detailed IncFile review, Zen Business review here, or a Rocket Lawyer review for some top choices. You can also cross-reference Legal Zoom and Zen Business in this comparison.
For those who prefer to go through all the steps of forming an LLC on their own, this post has everything you need to know. Moreover, we give you a detailed article about the best states to set up an LLC in, such as Wisconsin as reviewed in this post, or how to form an LLC in Illinois, and how to start an LLC in Maryland here. Also, check on how to start an LLC in North Carolina and how to form an LLC in Colorado, to boot.
How do I start an LLC in PA?
The process of acquiring an LLC in Pennsylvania is simple. On the other hand, learning how to form an LLC in Ohio nearby, for example, can help you protect your personal liability. You just have to know what to do and go through all the following steps:
1. Pick an LLC Name
Deciding a business name is your first step. There are federal and state guidelines you must follow to make sure that the name is available and allowed to use. Generally, you have to follow these rules:
- The end of your chosen business name must include “LLC,” “L.L.C.,” “Limited Liability Company” or “Limited Company.”
- The business name cannot be intentionally misleading to consumers
- The LLC names you pick should not be similar to a trademarked brand, organization name, or company.
- The words “bank” and “lottery” are not allowed in Pennsylvania and the entire country. You also cannot use a name that may be associated with financial entities.
- Any term connected to the Armed Forces, Veterans, civil servants (firefighters, EMT, police), and the government is not allowed to be used.
2. Establish Ownership of LLC
In a limited liability company (LLC), you need to assign and name the owners of your LLC. The owners are referred to as members and/or managers.
All LLCs have members, but managers are not required for all LLCs. You have to decide what kind of management LLC structure you want: manager-managed (where you appoint someone to manage the day-to-day LLC operations without the members) or member-managed (where one or all members are hands-on in the actual operations).
A Pennsylvania LLC must have at least one member or manager. There are no age restrictions to become an LLC member. You can assign an authorized person to sign and file the Certificate of Organization if the LLC members are not available.
3. Find and assign a Registered Agent who is based in Pennsylvania
In Pennsylvania, LLCs are required to have a registered agent who is available during business hours. Also, the registered agent must have a registered office address that follows these guidelines:
- The address must be able to accept mail, but the registered office address cannot be a P O box
- The registered office address should indicate a street address
This means any PA resident or company with a Pennsylvania business license can be a registered agent even for foreign LLCs. However, because the name and contact information of an LLC’s registered agent will be publicly available, it is not recommended that you assign yourself and risk compromising your personal information.
If you're looking for a third-party company to hire as a registered agent on the behalf of your LLC, the Pennsylvania Department of State has a list of official Commercial Registered Office Providers (CROP) posted on their site.
4. File the Certificate of Organization
5. Develop your LLC Operating Agreement
6. Get an Employer Identification Number (EIN)
Pennsylvania LLC FAQs
How long does it take to get an LLC in PA?
Once you've submitted all requirements, you have to wait for 7 to 10 business days for the LLC to be approved. This doesn't matter if you've submitted online or by mail, the waiting time is the same.
Do you need a lawyer to form an LLC?
No, even without an attorney, you can get started and prepare all your requirements and file legal paperwork when starting an LLC.
How much does it cost to form an LLC in PA?
The main filing fee is $125 regardless if you submitted your application online or by mail. If you're hiring a third-party company to apply for a Pennsylvania LLC on your behalf, prepare to shell out around $300 to $500.
A foreign limited partnership may cost $500 or higher.
Copies of certificates cost between $15 and $125, depending on what kind of document you need.
If you wish to expedite the process, you can pay an extra $100 for same-day service, $300 for 3-hour service (if received before 2pm), or $1,000 for 1-hour service (if received before 4pm).
LLCs that require additional business permits/licenses may have to shoulder additional fees for every permit, license, and certificate needed. Annual reports are $70 per filing.
Can you start an LLC for free?
Unfortunately, this isn't possible. While you can avoid spending anything by not hiring a firm to create a Pennsylvania LLC for you, you still have to pay state filing fees, which range between $50 and $500 across the United States. In Pennsylvania, you only have to pay $125.
How to Maintain Your Pennsylvania LLC
Starting an LLC is just the first step. To be able to stay compliant with Pennsylvania state requirements, you have to:
- Register for Pennsylvania State Taxes – The LLC won’t be paying taxes, but the members of the LLC have to indicate their earnings when filing their state and federal income taxes. Check other state taxes that your LLC may need to pay.
- Apply for all permits – The business licenses and permits required for your PA LLC would vary depending on the city, industry, type of business, and so on.
- File your annual report – This annual (or “periodic”) report is a decennial report required by the Secretary of State on all PA LLCs. It keeps your public records up-to-date, so you would have to include your name and LLC address, registered agent details, and EIN. The filing fee for the report is $70 and you must submit this report once every 10 years.
- Request a Certificate of Good Standing – This certificate, also known as Certificate of Subsistence, is a document that confirms an LLC is formed properly and is in compliance with all state regulations. You will be able to request this certificate immediately after forming the LLC. It doesn’t have an expiration date, nor require annual registration.
You see, the process of filing and maintaining an LLC in Pennsylvania is pretty straightforward. While there are third-party services that could handle all of these steps for you, it's good to know you can be hands-on about forming your limited liability company and save several hundred or thousands of dollars in the process.