How to Form a Pennsylvania LLC

Use A Professional Service

A professional service will handle the entire formation process on your behalf, allowing you to focus on the other needs of your new business.

4.6 out of 5 starsNorthwest ($49 + state fee) for basic & quick LLC formation.

3.6 out of 5 starsLegalZoom ($79 + state fee) for the most popular LLC service available.

Form An LLC

Step 1) Verify & Secure Your LLC Name

Choose a Business Name

First off, in order to launch a successful Pennsylvania LLC, you need to give it a name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes. We go into depth on this topic in our LLC naming guide, but we’ll go over the legal basics below.

 

Legally, your business name must:

  • Contain the words limited liability company or limited company, or the abbreviation LLC or L.L.C.
  • Not contain the words bank, engineer, pharmacy, or doctor, or the plural of these words.
  • Not imply that the corporation is an insurance company.
  • Be distinguishable from any other entity or trade name registered in Pennsylvania.

 

For an exhaustive list of naming rules you can review the complete Pennsylvania state LLC code.

If you’re having trouble coming up with a name that captures your brand, don’t let that stop you from forming your LLC. For now, you can focus on the legal requirements and consider filing for a fictitious name after you’ve nailed down your branding.

 

What To Do:

Once you’ve decided what you’d like to call your LLC in Pennsylvania, do a business name search to find out whether or not it’s in the cards. If your business name is available, you’ll be able to lock it down when you file your Certificate of Organization.

 

Quick Note: Before you commit 100% to a name, you should see if there’s a decent URL available. Use Weebly to search your options. If there’s a quality domain name for purchase, we advise buying it right away because even if launching a business website isn’t on your radar right now, it’s going to be soon.

Step 2) Appoint A Registered Agent

Choose a Registered Agent

The next step is appointing a Pennsylvania registered agent to officially receive and help to handle/process official documents like state filings, tax forms, legal notices, etc. To be considered, the agent must be a PA resident or registered business entity, with a physical street address, not a P.O. Box.

Note: In PA you can name yourself as agent for service of process.

Also, you can hire a professional that charges as much as $160/year or get a qualified/certified agent for free by registering your LLC through a filing service like IncFile.

 

Step 3) File Certificate Of Organization

Register an LLC

In order to legally conduct business through your LLC, you can choose to file a Certificate of Organization (Form DSCB:15-8821) and the New Entity Docketing Statement (Form DSCB:15-134A) by mail.

Or, you can also form your new LLC online at the Pennsylvania Department of State page.

The essential information for a Certificate of Organization is:

  • Complete LLC name,
  • Complete name, street address of registered agent and,
  • An organizer’s signature.

LLC Filing Fee: $125

 

Step 4) Draft An Operating Agreement

Create an Operating Agreement

Creating an LLC operating agreement is the only way for you and your members to fully define your roles and lock down your LLC’s management and ownership structure. Having this document in place will also give you all something to return to if a dispute or lawsuit arises.

Your operating agreement should outline the following:

  • each member’s responsibilities
  • how new members will be admitted
  • how existing members may transfer or terminate their membership
  • how profits and dividends are to be distributed

From there, you can add as many provisions as you want, provided they are not in conflict with Pennsylvania business law. To access a free operating agreement and learn more about how this document works in Pennsylvania, click here.

 

Step 5) Get An EIN

Get an EIN for Your LLC

The Employer Identification Number (EIN), or Federal Tax Identification Number, is essentially a social security number for your company. State and federal agencies use this number to track your business activity.

 

Your EIN will come in handy when it’s time to:

  • Open a business bank account
  • File Federal and State taxes
  • Hire employees

We think the best way to get an EIN is by using the free online application on the IRS website. We prefer this method because it’s the most efficient, but if you’d prefer to apply via phone, fax or mail, read through our guide to find out how.

Maintain Your LLC's Personal Asset Protection

Best Business Bank Account

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

2. Getting a business credit card:

  • Helps you separate personal and business expenses.
  • Builds your company's credit history, which can be useful to raise capital later on.

Reduce the Liability of Your LLC

Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:

  • General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
  • Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
  • Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Pennsylvania, businesses with one or more employees, excluding business owners, are required by law to have workers compensation insurance. Get a free quote with ADP.

Stay Compliant

Small Business Taxes

Obviously, getting situated with state and federal taxes isn’t optional. These days, it can be much simpler with help. How many licenses you’ll need and how many fees will be determined by a number of variables including your type of business, whether you work with the public, your location, etc.

Step 7 is where it really helps to work with a professional or buckle down and do the research yourself. Licenses, permits and business taxes need to be taken care of the right way.

You might also want to bookmark the Pittsburgh district office of the Small Business Administration and state’s SBDC page as well because they’re likely going to be go-to sources if you need help. If you’re going to need customized help, consider professional Business License Research packages that quickly source documents and provide filing instructions.

Reduce Administrative Burden

There will be many demands on your time once you start your business. With that in mind, it’s a good idea to streamline your workflow and reduce administrative overhead from the get-go. The two most important business tasks to get help with are:

1) Accounting

Getting your books in order right up front will save you headaches in the future. At the very least, you can have a professional setup your bookkeeping and accounting for you. This will save you money and time in the long run.

There are all in one services that will do your bookkeeping/invoicing/tax filing for you all for one monthly fee. Mazuma ($95/month) is a reliable all in one tax service.

2) Employee Payroll

If you have employees, a payroll service will save you a lot of time and also save you from having to become an expert on state compliance or employee tax withholdings and filings.  

Gusto is a reliable and good payroll service for small businesses.

Need Help Forming an LLC?

How To Form An LLC Online

If you’ve got too much on your agenda to worry about all the paperwork and state-requirements, there are a handful of LLC formation services that can take care of everything for you.

Here are the two most popular:

Northwest ($49 + state fee) = Best Price & Overall Value

LegalZoom ($79 + state fee) = Best For Brand Recognition

Note that this article on how to form an LLC in Pennsylvania isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions when forming a Pennsylvania LLC or business in general, please consult with a lawyer or other accredited professional. We recommend JGW INcounsel/John G. Webb, III, Esq.