If you own a business that was created in a state other than Pennsylvania, you will need to qualify or register that business in Pennsylvania if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Pennsylvania) limited liability company (LLC) to do business in Pennsylvania.
Note: Unlike other states, Pennsylvania does not have laws specifically for registering foreign LLCs. Instead, Pennsylvania has a set of laws that cover registration of foreign businesses generally. Pennsylvania law refers to these businesses collectively as “foreign associations.”
For Pennsylvania purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Pennsylvania. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Alabama is a foreign LLC in Mississippi.
According to Pennsylvania foreign associations laws, you are required to register your foreign LLC with the state of Pennsylvania if you are “doing business” or “transacting business” in Pennsylvania. (Pennsylvania law uses both terms.) What does this mean? Well, like most states, Pennsylvania law does not specifically define either “doing business” or “transacting business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, Pennsylvania law for foreign businesses specifies certain activities that do not constitute doing business in the state. The items listed include:
For the full, legal description of each of these items, check Title 15 Pa.C.S., Section 403 of the Pennsylvania Statutes. (This is a section of Pennsylvania’s foreign associations laws.) If your LLC’s only activity in Pennsylvania is one or more of the listed items, you should not need to register with the state.
To register your business in Pennsylvania, you must file a Foreign Registration Statement with the Pennsylvania Department of State (DOS). You can download a copy of the application form from the DOS website.
To complete the registration statement, you must provide more or less the same information that you need to create an LLC in your home state. Unlike other states, Pennsylvania’s uses one paper form to cover all types of business entities (corporations, partnerships, LLCs). To complete the registration statement, you need to provide:
If you need to use an alternate name in Pennsylvania, you must include a resolution adopting the alternate name. You can file the application on paper or online. The filing fee is $250.
If your LLC does business in Pennsylvania without being registered, it cannot bring a lawsuit in the state. However, not being registered does not invalidate your LLC’s contracts or prevent your LLC from defending a lawsuit in the Pennsylvania. Also, a member of the LLC is not liable where the member’s liability otherwise would be limited (for example, for the LLC’s debts) solely because the company did business in Pennsylvania without being registered.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Pennsylvania are essentially the same. See the Pennsylvania Department of State website for forms, information, and filing instructions for registering a foreign corporation in Pennsylvania.