Starting an LLC in Pennsylvania is an administrative procedure that involves choosing a business name, providing a registered office address, and filling the articles of organization with the Pennsylvania Department of State, alongside applicable state filing fees.
Afterward, you’ll also need to apply for an EIN with an IRS, set up a business bank account, and look into obtaining any necessary licenses, local or industry registrations, and insurance. You may also want to prepare an operating agreement, but this step is optional if you register a single-member LLC.
To begin with, it seems like a lot to handle. But you’ll whizz through all these steps and start an LLC in Pennsylvania in no time!
Steps to Open an LLC in PA
- Step 1: Pick a Name for Your LLC
- Step 2: Choose a Business Location for Your LLC Formation
- Step 3: Appoint a Registered Agent
- Step 4: File the Pennsylvania LLC Articles of Organization
- Step 5: Get an EIN from the IRS
- Step 6: Draft an LLC Operating Agreement
- Costs to Set Up an LLC in Pennsylvania
- Last Steps
Step 1: Pick a Name for Your LLC
When brainstorming a business name for your LLC, make sure that it’s distinct from other businesses registered with the Pennsylvania Department of State (DOS). The easiest way to do so is to run your list of ideas through a name search on the PA DOS website.
Remember that you must add one of the following designators to the end of your LLC business name:
- “Limited Liability Company”
Or one of these abbreviations:
If you’re not planning to register an LLC immediately, it makes sense to reserve the selected name. To do so, file a Name Registration form to DOS and secure your name for 120 days. The filing fee is $70.
Step 2: Choose a Business Location for Your LLC Formation
In Pennsylvania, you must designate a business address as the Registered Address for your LLC. This physical address must be a street address located in Pennsylvania where your company representative (or yourself) can be reached at any time.
All the process of service documents and other correspondence from the authorities will arrive at this address. Options for business owners include the main office of operations, a home address, or a commercial registered office provider.
Step 3: Appoint a Registered Agent
Most states require a registered agent that's listed by name and physical address. It’s where service of process, or legal documents, and other business mail are sent.
You can appoint yourself as a registered agent.
However, Pennsylvania only requires new businesses to list the physical address of the registered office. It serves the same purpose as a registered agent. The difference is a person’s name is not required.
If you choose to have the registered office be your primary office location or a home office, you may not need to hire anyone. Some business owners hire a third party, a Commercial Registered Office Provider (CROP). In other states, this is often known as a Commercial Registered Agent.
Hiring a CROP has an additional cost of about $60-$250 per year. You can find an array of service providers online. But be sure to check reviews. After all, you don’t want to entrust sensitive legal documents to just about anyone.
Step 4: File the Pennsylvania LLC Articles of Organization
Certificate of Organization
The Certificate of Organization must include the following information:
- Your LLC’s business name
- The Registered Office Address or the name and address of the Commercial Registered Office Provider
- Names of the LLC’s organizers
- The effective date of the Certificate
- Any restricted professional services information
- Information for LLCs organized as benefit companies
- Signatures of the members
The Docketing Statement must be attached to the Certificate of Organization. It must include:
- Your LLC’s entity name
- The responsible tax party
- A description of LLC’s business activity
- A federal Employer Identification Number (EIN)
- The LLC’s fiscal year
The Certificate of Organization Form and accompanying Docketing Statement can be filed online or sent by mail to the Pennsylvania Department of State. The mailing address is:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
The Certificate of Organization and Docketing Statement are processed in about 7-14 business days. The date is upon receipt by the Department of State.
Step 5: Get an Employer Identification Number from the IRS
An Employer Identification Number (EIN) is needed for multi-member LLCs, a single-member LLC with any employees, or an LLC that elects to be treated as a corporation for tax purposes. To obtain an EIN for your LLC, file an application with the Internal Revenue Service (IRS).
Most business entities will need an EIN for identifying the business with federal income tax and state tax filings, employee tax forms, and opening a business bank account.
The IRS website has a questionnaire to help understand if your LLC may need an EIN.
Obtain an EIN
A Limited Liability Company (LLC) must submit a request through the IRS using a Form SS-4 to obtain an EIN.
The IRS offers this as a free service. The application can be made online, through the mail, via fax, or by phone. The telephone option is for international applicants.
Applications for an EIN that are filed online are processed immediately. Applications with a fax number usually receive a response in about four business days. The processing time for mail applications is about four weeks.
Step 6: Draft an LLC Operating Agreement
An operating agreement is an internal business document. It lays out the members’ roles, capital contributions, salaries, ownership percentage, and profit and loss sharing agreement. Additionally, LLC operating agreements may include terms on liability, business taxes, and other general business operations.
What are Pennsylvania law requirements on operating agreements?
Pennsylvania law doesn’t require that a Pennsylvania LLC have an operating agreement. However, it’s advised to have one. The operating agreement provides liability protection for the LLC and its members. It also defines the roles and obligations of the limited liability company's owners. It’s crucial when personal assets are invested in the business entity.
One or more of your Pennsylvania LLC's members can prepare the LLC operating agreement. Since it’s an internal document, there is no filing fee cost. However, many new businesses may hire legal help to draft their limited liability company operating agreement. The fees for legal service will vary.
Costs to Set Up an LLC in Pennsylvania
Pennsylvania Bureau of Corporations and Charitable Organizations, a local equivalent of the secretary of state, charges the following fees to form an LLC:
- $125 for a Certificate of Organization (Form DSCB:15-8821) for a domestic LLC.
- $250 for a Foreign Registration Statement (Form DSCB:15-412) for a foreign LLC.
You can file your LLC registration documents online or as a paper copy via mail. Regular processing times can take up to three weeks for paper-based submissions.
However, Pennsylvania offers expedited processing for all company formation documents submitted in person. The fees are as follows:
- $100 for same-day service. Only applicable to documents received before 10 am.
- $300 for 3-hour service. Only applicable to documents received before 2 pm.
- $1,000 for one-hour service. The papers must be submitted before 4 pm.
Cost Charts for LLC in Pennsylvania
|Annual costs for Pennsylvania LLC (1st year)
|Certificate of Organization
$125 or $250
Registered agent service (if needed)
|$50 – $200
Fictitious name registration (if needed)
|Name reservation (if needed)
Trademark registration (if desired)
|Specific permits or licenses (if needed)
|Certified documents (if desired)
$55 + $3 per page
|Annual costs for Pennsylvania LLC (2nd year & after)
Annual report for restricted professionals
Registered agent service (if needed)
$50 – $200
Change registered agent (if needed)
Specific permits or licenses (if needed)
|Decennial report (every ten years)
Open a Pennsylvania business bank account
A Pennsylvania business bank account helps keep personal funds separate from business funds, which is required under PA law. The fees and timeline for getting a business bank account will depend upon the bank used.
Some banks will provide a fast turnaround time, especially if a member has strong credit or your LLC has raised a lot of capital. But some business owners may need to shop around.
The cost to maintain a bank account is minimal. On average, it may run about $14 a month. If loans or checks are required, then the fees will be more.
Obtain business insurance
The type of insurance your LLC may need will depend on the nature of your business. Some common types of business insurance include:
- General liability insurance to protect in lawsuits brought against your LLC
- Workers’ compensation insurance
- Professional liability insurance for LLCs providing professional services
Again, shop around and compare the terms, costs, and coverage among different providers. Also, some business bank accounts come with discounted insurance plans.
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