How to Start an LLC in Pennsylvania

A limited liability company (LLC) offers liability protection and tax credits that benefit small businesses. For example, in Pennsylvania, your LLC might be eligible for tax advantages, such as the Resource Enhancement and Protection Tax Credit or the Pennsylvania Resource Manufacturing Tax Credit. What’s more, Pennsylvania is also home to more than 1.1 million small businesses that make up 99.6% of the state's business operations. 

If you're considering forming an LLC, Pennsylvania is a viable place to do so. What's more, LLC formation in Pennsylvania is easy, affordable, and hassle-free. Just follow these steps, and you'll be on your way.

1. Name your Pennsylvania LLC

Selecting an appropriate name for your business is the first step in forming a limited liability company in Pennsylvania.

However, you can't just choose any business name—the name must comply with Pennsylvania naming requirements. The following are the most important requirements to keep in mind:

• Your business name must include the words Limited Liability Company, LLC, or L.L.C.
• Your name must be different from an existing business in the state.
• The business name cannot contain words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
• Certain restricted words (bank, lawyer, attorney, credit union, etc.) may require additional documentation and licensure paperwork.

For more guidance, see a complete listing of Pennsylvania LLC naming rules. 

We also recommend conducting a business entity search on the Secretary of State's website to ensure your business name isn't already taken. This database lets you see the names of registered businesses so that you can select a unique and distinct name for your LLC.

Once you've picked an appropriate business name, you can move on to the next steps. However, if you aren't ready to register your LLC and are concerned your name might be taken by someone else, you can reserve it for a small fee. In Pennsylvania, names may be reserved for up to 120 days by paying the fee and submitting the proper form to the state authority.

To reserve your business name, navigate to the Pennsylvania Department of State website, fill out the Name Reservation form, and pay the $70 filing fee.

2. Choose your registered office

Pennsylvania law requires your agent for service of process in the state. In Pennsylvania, this is called a registered office or commercial registered office provider. Unlike other states, Pennsylvania does not require your LLCs to obtain a registered agent service. That said, the commercial registered office provider will act as a registered agent as it receives correspondence on your LLC's behalf. 

When forming your Pennsylvania LLC, you must enter into a contract with a commercial registered office provider that meets the following criteria:

• The registered office must have a physical address in Pennsylvania.
• The address cannot be a P.O. Box.
• The registered office must have someone available during business hours to receive correspondence.

3. Prepare and file a certification of organization and docketing statement

Next, you need to register your LLC in PA online, so you'll file a certificate of organization for your domestic limited liability company. The certificate of organization in PA (often called articles of organization in other states) is a document that officially establishes your LLC by laying out basic information about it.

Prepare the certificate of organization and file it with the Pennsylvania Department of State to register your LLC properly. Though it sounds like a big job, that simply means filling out a relatively simple online form and paying the $125 filing fee. You can also send it by mail.

To prepare your certificate, you'll need the following information:

• Your LLC name
• The name and address of your registered office
• Name of each organizer of the LLC
• The effective date of your certificate (this could be the filing date or later)
• Whether the LLC will provide professional services
• Indicate whether the LLC is a public benefit company
• The signatures of all LLC's organizers

With your certificate of organization, you must also file a new entity docketing statement with the Pennsylvania Department of State. The docketing statement is just a supplemental form needed to establish your business entity with the state. You don't have to pay a filing fee with it, but you must include the following information on the statement:

• Your LLC's name
• The name and address of the person preparing for initial tax reports
• The description of the LLC's business activity
• The LLC's federal employer identification number
• The LLC's fiscal year-end

Once you file your certificate and docketing statement, the secretary of state will review the filing. If the articles are approved, your Pennsylvania LLC becomes a legal entity.

4. Create an operating agreement

Now, it's time to draft an operating agreement. An operating agreement is a document that outlines the way your LLC will conduct business.

Pennsylvania doesn't require you to file an operating agreement, but it is an essential component of your business. Having a readily accessible, written operating agreement is helpful for various reasons, including settling disputes that may arise over financial agreements and other potential litigation. Without an agreement in place, the courts make determinations based on state law, not necessarily what is in the best interest of the LLC and its members.

Your LLC's operating agreement can include, but is not limited to, the following:

• LLC's name and principal business address
• Duration of the LLC
• Registered office address
• Information about the certificate of organization
• Purpose of the business
• Business structure
• Members and their contribution
• The way profits and losses will be divided
• Procedure for admitting new members, as well as outgoing members
• Management of the LLC
• Tax structure
• Indemnification and liability clauses
• Dissolution instructions

You can follow an operating agreement template or turn to our convenient operating agreement services at LegalZoom for additional guidance.

5. Get an employer identification number (EIN) and open a business bank account

Every LLC in Pennsylvania needs an employer identification number (EIN). The nine-digit number is assigned by the Internal Revenue Service to identify your LLC for taxes. You can submit Form SS-4 online at the IRS website or use LegalZoom's easy EIN services.

The purpose of an EIN is to assist with the following:

• File and manage taxes at the state and federal levels.
• Open a business bank account.
• Hire employees.

Once you've obtained a federal employer identification number for your limited liability company, you should open a business account with your financial institution. This helps separate your personal and business assets and establishes personal liability protection.

6. Register for state taxes and comply with employer obligations

At this stage, you're ready to fulfill your tax requirements for your LLC in Pennsylvania. This involves registering for state tax accounts with the Pennsylvania Department of Revenue and the Pennsylvania Department of Labor and Industry.

When you register online and fill out the Form PA-100 (Pennsylvania Enterprise Registration Form), you can obtain tax accounts for sales tax, local sales tax, use tax, employer withholding tax, and more. Instead of receiving a single tax ID, you'll receive an account number for each of your tax accounts.

It's also essential to comply with Pennsylvania law regarding employer obligations. The following are some example regulations.

• Employer must report employees: Employers must report new employees to the government within 20 days of their hire date.
• Employer is required to withhold taxes: In Pennsylvania, employers are required to withhold federal, state, and local income taxes from their employees' wages and forward what is collected to the government.
• Employer must pay unemployment taxes: Employers in Pennsylvania must pay taxes to the state unemployment fund.
• Employer must buy workers' compensation insurance: In Pennsylvania, employers must purchase workers' compensation insurance for work-related injuries.

Next steps after forming your Pennsylvania LLC

Once you've established your Pennsylvania LLC, there are a few more things you should consider before you begin operating in the state.

Get necessary business licenses

Pennsylvania doesn't require LLCs to obtain general licenses at the state level, but you may need to obtain specific licenses or permits depending on your business activities.

For instance, if your LLC in Pennsylvania is selling taxable goods or services, you must apply for a sales tax license.

There are also occupational permits required at the federal state level. For example, medical professionals, teachers, cosmetologists, and real estate agents must obtain special industry-specific licenses to do business in the state.

To learn more about licensing and permit requirements, visit the Pennsylvania Department of Community and Economic Development’s PA Business One-Stop Shop.

Register a domain name

Next, look into URL availability. Even if you don't think you'll need a webpage, you probably will. At the very least, you should reserve the option of having one in the future by buying your domain name now. In addition to registering your domain name, begin creating social media accounts in your business name, too. This helps establish a cohesive digital presence, making it easier for your customers to find your business online.

Obtain a certificate of subsistence

While it's not necessarily a requirement, acquiring a certificate of subsistence (or good standing) shows that your business is compliant with Pennsylvania law and proves that it's still in existence.

To obtain your own certificate for your Pennsylvania LLC, you can apply through the Office of the Secretary of the Commonwealth and pay the $40 filing fee.

Consider a foreign LLC

Establishing a domestic LLC in Pennsylvania means you can legally operate within the state. However, if you'd like to expand your operations outside of PA, then you'll need to apply for a foreign LLC.

For example, if you want to do business in neighboring West Virginia, you'll need to file a foreign registration statement with the WV Secretary of State and pay the associated filing fee.

Look into other business recommendations

While the following recommendations aren't required, they are good business practices to consider:

• Apply for a business credit card.
• Purchase business insurance.
• Protect your name and logo with a trademark.

Annual filing requirements for Pennsylvania LLCs

Registering your LLC gives you a legal foundation to conduct business. Plan to keep your LLC compliant and in active status on the state's website, part of which involves complying with the state's new annual report requirements.

Starting in 2025, every Pennsylvania business entity must file an annual report with the PA Department of State. The annual report filing fee is $7, and all limited liability companies must file by Sept. 30 of each year to maintain good standing and avoid penalties.

This annual report is not to be confused with the Certificate of Annual Registration, which is another yearly requirement specifically for domestic restricted professional companies.

If your limited liability company is considered a restricted professional LLC, it means your business provides restricted professional services. Examples of these restricted professions include dentistry, optometry, law, and veterinary medicine. Every restricted professional company must file a Certificate of Annual Registration form and pay the filing fee every year to the Pennsylvania Department of State Corporation Bureau before April 15. The filing fee is $610 multiplied by the number of members your LLC has.

The cost of forming an LLC in Pennsylvania

So, how much does it cost to form an LLC in Pennsylvania? The following are just a few of the costs you can expect to pay when establishing your business.

• Name reservation: $70 (optional)
• Commercial registered office provider: varies
• Certificate of organization: $125
• Annual report fee: $7/year
• Business licenses and permits: varies (if applicable)
• Certificate of Annual Registration: $610+/year (if applicable)
• Certificate of subsistence: $40 (optional)

If we just look at the initial required start-up fees, it costs $125 to form a Pennsylvania LLC, which covers the cost of the filing fee for the certificate of organization.

How to start your LLC in Pennsylvania with LegalZoom

Starting your own business should be an exciting time for you, so don't let all the details of forming your LLC stress you out. At LegalZoom, we take care of everything for you, from preparing your operating agreement to registering for your EIN.

When you take advantage of our LLC formation services, you can focus more on running your business and less on filing paperwork.

FAQs

What are the benefits of a Pennsylvania LLC?

Pennsylvania is a desirable place to start a business, as the state offers tax credits, loans, and low start-up costs. Other benefits of forming a Pennsylvania LLC include tax flexibility, increased credibility, and personal liability protection.

Do I need a business license for my Pennsylvania LLC?

Pennsylvania does not have a general business license requirement, but your business may need special licenses and permits to operate in the state. Your business activities will determine whether you need to acquire local, state, or federal licenses.

How long does it take to form an LLC in PA?

It depends on the state processing time and the filing method you selected. If you submit your certificate of organization online, it will likely be a quicker process than if you mail it in. That said, you can expect it to take around 15 business days for the state to approve your submission.

How do I correct filing errors in Pennsylvania?

To make changes to your submission, you must file a Certificate of Amendment-Domestic Limited Liability Company form and pay the $70 filing fee to the Pennsylvania Department of State Corporation Bureau.

How do I dissolve an LLC in PA?

You can file a certificate of dissolution with the Pennsylvania Department of State and pay the $70 filing fee to dissolve your Pennsylvania LLC. Once the state processes your paperwork, your business name will become available for others to use.

Rudri Bhatt Patel contributed to this article.