A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Pennsylvania. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under Pennsylvania law, your LLC name must contain the words "Company," "Limited," or "Limited Liability Company," or an abbreviation of one of these three choices. The statute does not provide examples of acceptable abbreviations for these words; however, it is likely that "Ltd." and "Co." can be used, but not "Liab.'"
Your LLC’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.
Every Pennsylvania LLC must have an agent for service of process in the state. In Pennsylvania, this is called a registered office (most other states require a registered agent).This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered office may be an Pennsylvania resident or a business entity authorized to do business in Pennsylvania. The registered office must have a physical street address in Pennsylvania. You can find information on Pennsylvania commercial registered office providers here.
A Pennsylvania LLC is created by filing a Certificate of Organization Domestic Limited Liability Company (Form DSCB:15-8821) with the Department of State. The certificate must include:
The certificate must be accompanied by a completed New Entity Docketing Statement (Form DSCB:15-134A). This form must include:
The certificate and docketing statement may be filed online or by mail. The filing fee is $125.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
An LLC operating agreement is not required in Pennsylvania, but is highly advisable. The Operating Agreement is the primary document that establishes the rights, powers, duties, liabilities, and obligations of the members among themselves and to the LLC. The Operating Agreement is purely an internal document and is not filed with the Secretary of State. If an existing or newly created LLC does not adopt an operating agreement, its existing articles of organization, bylaws or operating agreement, and/or its member control or limited liability company agreement will collectively become its operating agreement.
For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo). If an operating agreement is created, it need not be filed with the certificate of Organization.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online EIN application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the clerk for the city where the LLC's primary place of business is located (or county if it is in an unincorporated area). For state license information, consult the Pennsylvania Business One-Stop Shop. For more information, see Nolo's article How to Get a Small Business License in Pennsylvania.
Department of Revenue: In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with the Pennsylvania Department of Revenue (DOR). (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 the Revenue e-Services Center or mailing in Form PA-100. For more information on Pennsylvania LLC tax registration, see Nolo's article Pennsylvania LLC Annual Filing Requirements.
Only foreign LLCs and Pennsylvania LLCs engaged in certain specified restricted professional services must file a Certificate of Annual Registration (Form DSCB:15-8221/8998) with the Department of State. (See Nolo's article, How to Form a Professional LLC in Pennsylvania for more information.) These must be filed with the Pennsylvania Department of State Corporation Bureau by April 15th of every year. The registration may be filed online or by postal mail. An annual fee of $560 times the number of members of the LLC must be paid.
To do business in Pennsylvania, all LLCs organized outside of the state must register with the Pennsylvania Department of State. Foreign LLCs must appoint a registered agent for service of process. To register, file a Foreign Registration Statement (Form DSCB:15-412). The statement may be filed online or by postal mail. The application must be accompanied by a completed New Entity Docketing Statement (Form DSCB:15-134A). The filing fee is $250.
Be sure to check the Pennsylvania business name database to see if the foreign LLC's name is available in Pennsylvania. If not, it must register and transact business under another name. To do so, file a Registration of Fictitious Name (Form DSCB:54-311) showing the assumed fictitious name, plus $70 fee (the fictitious name must also be available for use in Pennsylvania).