How to Form an LLC in Pennsylvania

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.

1. Choose a Name for Your 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.

You may reserve a name for 120 days by filing a Name Reservation (Form DSCB:15-208) with the Pennsylvania Department of State. The filing fee is $70. The form by be filed online or by postal mail.

2. Appoint a Registered Agent

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.

3. File a Certificate of Organization

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 LLC's name
• the name and address of the LLC's registered agent
• the name of each organizer of the LLC
• the effective date of the Certificate--upon filing or a later date
• whether the LLC will provide professional services (applicable to certain restricted professional companies
• whether the LLC is a public benefit company--that is, organized to benefit the general public, and
• signatures of all the LLC's organizers.

The certificate must be accompanied by a completed New Entity Docketing Statement (Form DSCB:15-134A). This form must include:

• the LLC's name
• the name and address of person responsible for initial tax reports
• a description of the LLC's business activity
• it's federal employer identification number (EIN), and
• its fiscal year end.

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.

4. Prepare an Operating Agreement

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.

5. Obtain an 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.

6. File Annual Registration (Restricted Professional LLCs Only)

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.