How to Form a Single-Member LLC in Pennsylvania

Solo business owners are classified as sole proprietorships by default. But you can register your business as a single-member limited liability company (SMLLC) if you want to take advantage of the many benefits of LLCs, such as limited personal liability and tax flexibility.

While forming an SMLLC can vary, you can generally follow the steps below to form an SMLLC in Pennsylvania. Forming an SMLLC is, in general, the same as forming a multi-member LLC. Be sure to follow Pennsylvania's LLC laws.

1. Name Your SMLLC

Naming your SMLLC is an important first step to creating your business. Your name should be unique. Pennsylvania requires that your business name be distinguishable from any business name that's on record with the Pennsylvania Department of State (DOS). Your SMLLC's name also shouldn't use a designator that requires authorization, licensure, or approval. For example, your name shouldn't imply that it's associated with the state government, if it's not, or it shouldn't use the word "bank," "college," or "insurance," if it doesn't hold the proper licenses or authorization. (15 Pa. Cons. Stat. § 202 (2023).)

Your business name should indicate that your company is an LLC. Pennsylvania law requires that your LLC contain the words:

• "company"
• "limited" or
• "limited liability company,"
• an abbreviation of one of those terms above.

For instance, your name could include "Co.," "L.L.C.," or "Ltd. Co." (15 Pa. Cons. Stat. § 204 (2023).)

You can make sure your proposed business name is available by using the DOS's free business search. You can reserve a business name for 120 days by filing a name reservation with the DOS. You can reserve your business name by mailing a completed name reservation form to the DOS or by filing online through Business Filing Services. As of 2023, the filing fee is $70.

2. File a Certificate of Organization

To register your SMLLC with Pennsylvania, you'll need to file a Certificate of Organization Domestic Limited Liability Company with the DOS. You must include the following information on the certificate:

• the official name of your new SMLLC
• the address of your SMLLC's registered office
• the name and address of each SMLLC organizer
• a statement as to whether the SMLLC will be manager-managed
• for certain specified professionals, a brief description of the professional services to be rendered, and
• a few other basic details.

You must file a completed New Entity Docketing Statement (Form DSCB:15-134A) with the certificate. To complete the statement you'll need to provide certain tax-related information about your new SMLLC, including the person responsible for initial tax reports, the SMLLC's EIN (if any), and its fiscal year end.

You can download blank forms for the certificate of organization and docketing statement by going to the DOS website. You can file online through Business Filing Services or by mail. As of 2023, the filing fee is $125.

Every Pennsylvania SMLLC must have a registered office (most other states require a registered agent). A registered office effectively is an individual or business entity that agrees to accept legal papers on behalf of the SMLLC. The registered office can be the SMLLC's office or a commercial registered office. The registered office must have a physical street address in Pennsylvania. The DOS provides a database of Pennsylvania commercial registered office providers.

All of the paperwork and procedural steps to start an SMLLC in Pennsylvania can be done online using our online LLC formation application.

3. Prepare an Operating Agreement

Like every other state, Pennsylvania doesn't require SMLLCs to have an operating agreement. However, having one is recommended, even for SMLLCs. The operating agreement is usually made between the single member and the LLC itself.

The agreement typically covers the LLC member's rights, duties, and obligations, as well as the SMLLC's management structure (whether it's member-managed or manager-managed). If you choose to have your SMLLC be manager-managed, then either you (as a member) or someone outside the LLC (a nonmember) can serve as the manager. In Pennsylvania, if your operating agreement doesn't specify that your SMLLC will be manager-managed, then your SMLLC will be treated by default as member-managed. (15 Pa. Cons. Stat. § 8847 (2023).)

Having an operating agreement in place has multiple benefits. An agreement can help with liability protection by separating your business from you personally. It also can be useful with lenders and other businesses when entering into business transactions.

For more information and help with creating an SMLLC operating agreement, see Nolo's Guide to Single-Member LLCs, by David M. Steingold (Nolo).

4. Do You Need an EIN?

For tax purposes, SMLLCs are treated as disregarded entities (same as a sole proprietorship) by default. If your SMLLC doesn't have employees and is treated as a disregarded entity, then you're not required to obtain a federal employer identification number (EIN). Instead, an SMLLC owner can report their business profits and losses on their personal tax returns using their own Social Security number or tax identification number.

If your SMLLC has employees or if you choose to have your SMLLC taxed as a corporation rather than as a disregarded entity, you have to get an EIN from the IRS.

Even if you don't need to obtain an EIN for your SMLLC, there are often business reasons for doing so. For example, banks often require an EIN to open an account in the business's name. Also, companies could require an EIN to process payments. In many instances, it makes sense to have an EIN for your SMLLC even if it's not required for federal tax purposes.

You can get an EIN by completing an online application on the IRS website. There's no filing fee.

5. Register With the Pennsylvania Department of Revenue

Many companies will need to register with the Pennsylvania Department of Revenue (DOR). For example, if you have employees or collect sales tax for goods and services, you'll need to register to pay taxes. (Pennsylvania also has other LLC-related taxes and DOR filings not covered here.)

In many of these cases, the process starts by registering online through myPATH, Pennsylvania's tax hub. For more information on state LLC tax registration, see our article about LLC annual report and tax filing requirements in Pennsylvania.

6. Obtain Business Licenses

You could need to apply for one or more licenses for your business. You might need a license based on:

• your profession or occupation
• specific goods or services you'll sell or provide
• an assumed or fictitious name for your business, and
• health and safety matters.

Learn which licenses, permits, and registrations your business might need in our article about getting a small business license in Pennsylvania.

7. LLC Annual Reports Required Starting in 2025

Beginning in 2025, every Pennsylvania LLC will be required to submit an annual report every year. Before 2025, LLCs were only required to submit a report every 10 years. The fee for these new annual reports is $7.

Getting Help Forming Your SMLLC in Pennsylvania

Most business owners can form an SMLLC on their own. You can find many free or inexpensive self-help resources that can help you through the process. If you have any specific legal questions, consider reaching out to a business attorney in your area.

If you're looking for additional guidance on how to form and run your SMLLC, check out the single-member LLC section of our website.