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Cost to form an LLC in Pennsylvania - $125
Recurring costs - $70 Decennial reports
Filing Time - It normally takes 2 weeks for the LLC paperwork to be approved in Pennsylvania. Expedited processing is also available for an additional fee.
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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Pennsylvania. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Pennsylvania without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.
Related: How Does an LLC Protect You?
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.
Forming an LLC in Pennsylvania is fairly straightforward, but it’s nice to have some support in case you have questions or get stuck. IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!
To form a Limited Liability Company in Pennsylvania, file the Certificate of Organization with the Pennsylvania Department of State. The LLC filing fee is $125.
Approval for the LLC is typically around two weeks. Expedited filing is available if formation needs to happen faster. For an additional $100 filing is the same day, $300 receives 3-hour filing and $1,000 gets 1-hour filing.
HOW TO FILE THE CERTIFICATE OF ORGANIZATION AND FORM A PENNSYLVANIA LLC
The steps for filing online or by mail are largely the same. The screenshots show how to file online. To file by mail, download the Pennsylvania LLC Certificate of Organization (Form DSCB:15-8821).
- Begin by creating an account on the Pennsylvania Department of State’s website.
- After logging into the account, scroll down to “Start or Manage Business Filings”, select “Domestic Limited Liability Company: and then select “Certificate of Organization – Domestic Limited Liability Company (8821)
Step 1: Veteran Status
If you are a Veteran or active reservist, check the box, otherwise leave it blank and then “Save and Continue”.
Step 2: LLC Name Search
Enter the name you want for the LLC. The name of the LLC also has to differ from other entity names registered with the Department of State. You can check on available Pennsylvania LLC names before filing to be sure the one you want is available.
The name of the LLC must also include a designator at the end of the business name. A designator is used to describe the type of business entity. Select the available designators from the drop-down box.
A comma may be used after the business name and before the designator. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
Before settling on a name, you may want to see if a domain name is also available in order to match your business name and website address.
Enter the name and designator and click “Search”. If the name is available, there will be a message that says it appears to be available, but won’t be finalized until the Department of State reviews the application.
Step 3: Business Details
(a) Initial Registered Office – If the initial registered office is the physical address of the LLC or the address where the business records are stored, select (a) and enter the address below. A PO Box is not allowed.
(b) Commercial Registered Office Provider (CROP) – If hiring a commercial registered office service, they must first be registered with the Department of State. If they are, then select (b) and enter their name and county from the drop-down menus.
Step 4: Organizer Information
An LLC Organizer is someone involved with the formation of the Certificate of Organization. The Organizer may or may not become a member, such as a mentor, attorney or accountant, but any of the initial members can be listed as an organizer.
At least one organizer and their address must be listed. After all of the organizers have been listed, click on “Save and Continue”.
Step 5: Form Questions
Effective date of Certification of organization – If you want the LLC to start immediately, choose the box that says “The Certification of organization shall be effective upon filing in the Dept of State.”. If you want to LLC to start later, select the box that says “The Certification of organization shall be effective on (month date year hour, if any)” and enter the date of your choice. The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year and the business isn’t going to have any activity until the start of the year. By delaying until the following year they will reduce the number of end-of-year filings.
Professional Company – If the services of the LLC have to be licensed by the state, enter “Applicable” in the drop-down menu and select the types of licenses services. For more information about professional licensing, see Pennslyvania Business Licenses and Permits in our state guide. Some common licenses are for Chiropractic, Dentistry, Law, Medicine, Optometry, Podiatric, Public accounting, Psychology, or Veterinarians.
Public Benefit – A public benefit LLC is one that intends to have a positive impact on society and the environment. Most filers will select “Not Applicable”.
Step 6: Docketing Statement
Name & Address – Enter the name and address of the person who will be responsible for filing the initial tax reports.
FEIN – The FEIN (Federal Employer Identification Number) is like the social security number for the LLC. We recommend leaving this field blank until the LLC is filed with the Department of State. If the name you plan to use can’t be registered, it will need to be revised with the IRS. More information about how to apply for an LLC FEIN.
Description of Business Activity – Provide some basic information about what the business does. If you want to keep the business purpose more open-ended, you can enter “Any lawful business activity for which a Limited Liability Company may be organized in Pennsylvania”.
Step 7: Attachments
This is an optional section and not used by most LLCs. Here you would include additional rules for the operation of the LLC.
Step 8: Declaration & Signatures
The person signing verifies they are authorized to execute the Certificate of Formation and they are the ones submitting this document to the Department of State.
Step 9: Review
Review that all of the information is correct.
Step 10: Pay and File
Pay and file the Certificate of Organization.
Companies like IncFile and IncAuthority help guide you to make sure it’s done right and you only pay the normal state fees.
Check out our reviews of popular LLC formation services to learn more.
Tasks After Forming Your LLC
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare an Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.
Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
- Member’s personal liability protection may be diminished
- Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future
Obtain an EIN
The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more.
Related: How to Apply for an EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Depending on the age of the LLC, a Pennsylvania Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:
- Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate.
- Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
- Sales Tax License – In order to sell products and certain services, registration with the Pennsylvania Department of Revenue will be necessary.
File Decennial Reports
LLCs are required to file a decennial reports with the Pennsylvania Secretary of State. The annual report updates ownership information and other details.