To form a corporation in Pennsylvania, you need to take the steps set forth below. To find out what's required to form a corporation in any other state, see Nolo's 50-State Guide to Forming a Corporation.
Your corporation's name must include a designator "incorporated," "corporation," "limited," "company" (or an abbreviation thereof), or "association," "fund," or "syndicate."
Your corporation's name must be distinguishable from the names of other business entities already on file with the Pennsylvania Department of State. Names may be checked for availability at the Pennsylvania Department of State business name database.
Your corporation is legally created by filing Articles of Incorporation with the Pennsylvania Department of State. The articles must include the corporate name; the address of the corporation in Pennsylvania or the name and address of agent for service of process; the number of shares the corporation is authorized to issue; the name and address of each incorporator; and the effective date of articles if later than the filing date. The articles must be accompanied by a completed New Entity Docketing Statement, form DSCB:15-134A. This form must include the corporation's name, the name and address of person responsible for initial tax reports; its purpose; its effective date, if any; its EIN, and its fiscal year end.
The articles must be filed online or by postal mail. The filing fee is $125.
Every Pennsylvania corporation must have an agent for service of process in the state. This is an individual or corporation that agrees to accept legal papers on the corporation's behalf if it is sued. The registered agent may be a Pennsylvania resident or a business entity authorized to do business in Pennsylvania. The registered agent must have a physical street address in Pennsylvania. A list of registered agents is available on the Pennsylvania Department of State website.The agent should agree to accept service of process on your corporation's behalf prior to designation.
Bylaws are an internal corporate document that set out the basic ground rules for operating your corporation. They are not filed with the state. Your corporation is not legally required to have corporate bylaws, but you should adopt them because they establish your corporation's operating rules, and help show banks, creditors, the IRS, and others that your corporation is legitimate. For corporate bylaw forms, see Nolo's website or Incorporate Your Business, by Anthony Mancuso (Nolo).
Keep your bylaws, meeting minutes, and other important corporate papers in a corporate records book. This can be a simple three ring binder or corporate records kit you order through a corporate kit supplier. Keep it at your corporation's principal office.
The incorporator—the person who signed the articles—must appoint the initial corporate directors who will serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders). The incorporator must fill in an "Incorporator's Statement" showing the names and addresses of the initial directors. The incorporator must sign the statement and place a copy in the corporate records book. The statement need not be filed with the state.
The first meeting of the corporation's board of directors should be held at which the directors can appoint corporate officers, adopt bylaws, select a corporate bank, authorize issuance of shares of stock, set the corporation's fiscal year, and adopt an official stock certificate form and corporate seal. The directors' actions must be recorded in corporate minutes prepared by the incorporator or any of the directors. Additionally, if the corporation will be an S corporation, the directors should approve the election of S corporation status. For corporate meeting minute forms, see Nolo's website or refer to Incorporate Your Business, by Anthony Mancuso (Nolo).
Issue stock to each shareholder in return for their capital contributions of cash, property, services, or all three. Small corporations usually issue paper stock certificates. Enter each shareholder's name and contact information in the corporation's stock transfer ledger.
The default rule in Pennsylvania is that corporate stock has no par value. Thus, the articles need not state whether the shares have a par value. Par value is a set amount below which the stock cannot be sold--it has nothing to do with the stock's actual value. See Nolo's article "What is Par Value Stock." Pennsylvania corporations have the option of establishing a par value for their shares. If desired, the par value can be listed in the articles, but this is not required.
A share of stock in your corporation is classified as a security under state and federal securities laws that regulate the offer and sale of corporate stock. However, federal law exempts "private offerings:" a non-advertised sale to a limited number of people (generally 35 or fewer). See Nolo's Corporations FAQ for more details.
Pennsylvania allows your corporation to sell an unlimited number of shares to "principals," including your corporation's officers and directors, controlling shareholders, key management personnel, and their immediate families. In addition, the small issuer exemption allows unadvertised share sales to up to ten investors. No state registration is required for either exemption. For more information about Pennsylvania's securities laws, see "Raise Capital by Issuing Securities" by the Pennsylvania Department of Banking and Securities.