Pennsylvania can be a great home state for starting a limited liability company (LLC). The Keystone State is home to more than 1.1 million small businesses, which make up 96% of the state's business operations. As of 2025, the top industries for small businesses in the state are hotels and restaurants, construction, healthcare, retail, and professional services.
No matter which industry you’re in, Pennsylvania’s business environment may be beneficial for your business. Learn more about this legal business entity, the ins and outs of forming an LLC in Pennsylvania, and other tips to keep in mind.
Why consider starting an LLC in Pennsylvania
Pennsylvania is not the cheapest state to start a business, but those that do form here have higher survival rates, on average, than small businesses in other states. Plus, the Pennsylvania Department of Community & Economic Development features the Business One-Stop Shop, which lists a variety of strong resources to support small businesses, including startup guides, registration and maintenance how-to’s, growth resources, and more.
Another reason to form your LLC in PA is the relatively low personal income tax rate of 3.07% flat, a 0% tangible personal property tax, and a thriving economy to support businesses in various industries.
Benefits of forming an LLC in Pennsylvania
A Pennsylvania limited liability company might be the right choice for the following reasons:
- Liability protection. An LLC provides liability protection by separating personal and business assets, meaning that things like your home will be safeguarded from business creditors or legal claims.
- Tax election flexibility. LLCs are automatically taxed as sole proprietorships or partnerships, where business income passes through to the owners’ personal state and federal income tax returns. However, qualified LLCs can also elect to be taxed as C or S corporations.
- Low state fees. Pennsylvania does not mandate a business privilege tax at the state level; instead, individual municipalities may require this tax. Additionally, the annual report fee is only $7.
- Management flexibility. LLCs have more freedom than other business structures in the way their company operates. There can be member-managed LLCs (the owners manage the company) or manager-managed (an outside person is hired to oversee day-to-day operations).
- Credibility and professional image. Even if you’re starting a solo venture, forming an LLC boosts your professionalism and credibility with a formal business structure (sole proprietorships and general partnerships don’t need to register with the state in Pennsylvania).
Potential drawbacks to a Pennsylvania LLC
There are a few potential downsides to forming an LLC in the PA:
- Paperwork. If you want to keep things simple, you can work as a sole proprietor or in a general partnership. You don’t have to do paperwork or register with the state, so there are fewer (if any) compliance requirements.
- Formation fees. The formation fee for a domestic PA LLC is $125, which is about the middle of the pack when it comes to state registration fees across the country. (Note that it costs twice as much to register in PA as a foreign LLC).
- High PLLC fees. Pennsylvania recognizes professional limited liability companies (PLLCs), a special business structure catered to the circumstances of certain professional fields. However, this entity type has much higher annual fees than standard LLCs.
Types of LLCs in Pennsylvania
Pennsylvania, like most other states, recognizes two main types of LLC structures: single-member and multiple-member. A single-member LLC consists of one member (owner); its tax status defaults to a sole proprietorship (pass-through taxes). A multiple-member LLC consists of two or more members (owners); this type of LLC is taxed as a partnership (also pass-through taxes).
But Pennsylvania also recognizes what it calls a restricted professional company (also known as a PLLC). Pennsylvania law mandates that LLCs offering certain professional services can only practice under a restricted professional company status. These restricted professional services include dentistry, law, medicine and surgery, optometry, public accounting, psychology, veterinary medicine, and more.
Step-by-step guide to forming an LLC in Pennsylvania
Ready to form your new business? Follow these detailed steps to start your LLC in Pennsylvania.
1. Name your Pennsylvania LLC
Selecting an appropriate name for your business is the first step in forming a limited liability company in Pennsylvania, and 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, L.L.C., Limited, or Ltd.
- Your name must be different from all existing businesses in the state.
- The business name cannot contain words used associated with a government agency (e.g., 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 the 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.
If you aren't ready to register your LLC but are concerned your name might be taken by someone else, you can reserve it for up to 120 days for a fee. 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, unlike other states, doesn’t require a registered agent; instead, it requires a registered office address or a commercial registered office provider. The commercial registered office provider will act as a registered agent, as it receives correspondence on your LLC's behalf.
When filling out your Pennsylvania LLC paperwork, you must provide a registered office address (which may or may not be your business address). You can provide your own office or hire a commercial registered office provider that meets the following criteria:
- The registered office must have a physical street address in Pennsylvania.
- The address cannot be a P.O. box.
- The registered office must have someone available during business hours to receive correspondence.
LegalZoom provides registered agent services that provide a registered office Pennsylvania street address meeting state requirements and ensure timely and seamless delivery of important legal notices.
3. Prepare and file a certification of organization
To officially register your LLC in PA, you'll need to file a certificate of organization. This document (commonly called articles of organization in other states) 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, Bureau of Corporations and Charitable Organizations. This can be done by mail or filing online through Pennsylvania Business One-Stop Shop. You’ll also pay the $125 filing fee.
To prepare your certificate, you'll need the following information:
- The LLC’s registered office address or the name and address of your commercial registered office provider and county of venue
- Name of each organizer of the LLC
- The effective date of your certificate (this could be the filing date or later)
- The signatures of all of the LLC's organizers
Along with your certificate of organization, you must file a new entity docketing statement with the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations. The docketing statement is just a supplemental form that you must attach if completing the certificate of organization on paper. 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 Pennsylvania 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, which is a document that outlines the way your LLC will conduct business.
Pennsylvania doesn't require LLCs to file operating agreements, but they can be very helpful to your business, especially when settling disputes that may arise over financial agreements and other potential litigation. Without an agreement in place, Pennsylvania 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 should include basic details about the company as well as information about the way profits and losses will be divided, the procedure for admitting new members, the LLC’s management structure, indemnification and liability clauses, and dissolution instructions.
You can create your documents using an operating agreement template or turn to LegalZoom’s convenient operating agreement services for additional guidance.
Building a business is enough work as it is. We'll help you start your LLC with confidence.
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 federal tax ID 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 service.
The purpose of an EIN is to assist with the following:
- Filing and managing taxes at the state and federal levels.
- Opening a business bank account.
- Hiring employees.
Once you've obtained a federal EIN for your limited liability company, you can open a business account. This helps separate your personal and business assets and establishes personal liability protection.
6. Register for state and local taxes and comply with employer obligations
To fulfill your Pennsylvania tax requirements, you will need to register for state tax accounts with the Pennsylvania Department of Revenue and the Pennsylvania Department of Labor and Industry.
Most LLCs will register for business taxes through the Department of Revenue’s myPATH tax hub. Some LLCs, depending on their business activity and structure, may also need to fill out the Form PA-100 (Pennsylvania Enterprise Registration Form) to 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 business tax accounts.
Pennsylvania municipalities also levy their own business privilege taxes, which is an annual tax on gross receipts for the privilege of doing business there. Check with the counties and cities in which you conduct business to find out what you may owe.
If your LLC has employees, it's essential to comply with Pennsylvania law regarding employer obligations, such as the following:
- Employers must report new employees to the government within 20 days of their hire date.
- 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.
- Employers in Pennsylvania must pay taxes to the state unemployment fund.
- In Pennsylvania, employers must purchase workers' compensation insurance for work-related injuries.
Pennsylvania LLC costs
So, how much does it cost to form an LLC in Pennsylvania? Let’s break it down.
- Certificate of organization: $125
- Annual report fee: $7/year
- Business licenses and permits: varies (if applicable)
- Professional registered office provider: $50–$300/year (if you hire one)
- Name reservation: $70 (optional)
- Certificate of Annual Registration: $700+/year (if applicable)
- Certificate of subsistence (good standing): $40 (optional)
Pennsylvania LLC Tax Considerations
There are certain tax obligations to keep in mind when forming an LLC in Pennsylvania.
Federal and state income tax
Pennsylvania LLCs must consider the following when preparing for federal and state taxes:
- Self-employment taxes. All LLC owners, if opting for pass-through taxation, must pay the federal self-employment tax of 15.3%.
- Income tax. LLC owners who don’t elect S or C corporation tax status and who are Pennsylvania residents must pay income tax on their business earnings. The current state income tax rate is 3.07%.
Local taxes
While the state of Pennsylvania doesn’t impose a business privilege tax, many counties and cities do. These are typically based on a certain threshold of gross receipts. Check the local municipality in which you conduct business to understand your tax obligations.
What to do 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 and permits
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 Pennsylvania LLC 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.
You may also need to obtain business licenses or permits for specific activities at the local level. In the city of Pittsburgh, for example, LLCs don’t need a general business license; however, some may be required to apply for other types of licenses and permits depending on what type of business you operate. Contact your local governing agency to determine what’s required.
Register a domain name
Next, look into URL availability. Even if you don't think you'll need a webpage, you should at least 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 Pennsylvania LLC certificate, you can apply by logging in to your business profile through the PA Department of State’s Business Filing Services portal. You must also pay the $40 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.
File your annual report
Keeping your LLC compliant and in active status means complying with the state's annual report requirements.
As of 2025, every Pennsylvania business entity must file an annual report with the Department of State. The annual report filing fee is $7, and all limited liability companies (both domestic and foreign filing entities) must file by September 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 and foreign restricted professional companies (which provide restricted professional services). Every restricted professional LLC must file a Certificate of Annual Registration form and pay the filing fee every year to the Pennsylvania Department of State on or before April 15. The filing fee is $700 multiplied by the number of members your PA LLC has.
Registering an out-of-state LLC in Pennsylvania
If your existing LLC has already been registered in another state and you'd like to expand your operations into Pennsylvania, then you'll need to apply for a foreign LLC. To register a foreign LLC in PA, submit a Foreign Registration Statement form and New Entity Docketing Statement to the Pennsylvania Bureau of Corporations and Charitable Organizations and pay the $250 filing fee. You can mail the forms or complete them digitally by filing online.
Comparing Pennsylvania to other states for LLC formation
Deciding where to form your business depends on several factors, including where you want to operate, formation and ongoing compliance fees and requirements, tax obligations, growth opportunities, and more. Here’s how Pennsylvania stacks up against other popular states for LLC formation:
- Delaware. Delaware has one of the most business-friendly legal environments in the country, no state or local sales taxes, and privacy in LLC information. Additionally, it recognizes the series LLC, and foreign LLCs don’t have to pay state income tax if they don’t operate in the state. However, Delaware institutes an annual LLC franchise tax.
- New Jersey. New Jersey LLCs that elect pass-through taxation must pay the state income tax rate, which may or may not be less than the 3.07% flat rate in Pennsylvania (New Jersey’s income tax rate is based on tax brackets). LLC filing fees are the same as Pennsylvania, but New Jersey’s annual report fee is higher, at $75.
- Florida: In Florida, LLC owners who elect pass-through taxation can enjoy no personal state income tax on their business earnings. Additionally, the overall costs of formation are less expensive compared to Pennsylvania, but the annual report fee is higher.
Start an LLC in Any State
LegalZoom can help you file your state's formation paperwork for as little as $0 + state filing fees.
Why choose LegalZoom to create your LLC
Starting your own business should be an exciting time for you, so don't let all the details of forming your PA 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. Start an LLC in Pennsylvania today with LegalZoom.
FAQs
What are the benefits of a Pennsylvania LLC?
Pennsylvania is a desirable place to start a business, as the state has relatively low personal income taxes, high survival rates for small businesses, low start-up costs, and the Business One-Stop Shop, which lists a variety of resources for new businesses. 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 Pennsylvania?
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 certificate of organization, you must file a certificate of amendment form and pay the $70 filing fee to the Pennsylvania Department of State.
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.
Can I be my own registered agent in Pennsylvania?
Yes, technically you can be your own Pennsylvania registered agent as long as your registered office on file complies with state requirements. However, there may be some drawbacks to serving as your own Pennsylvania registered agent, including a lack of privacy, potential missed documents, and schedule conflicts.
Do Pennsylvania LLCs file annual reports?
Yes, all Pennsylvania LLCs are required to file an annual report by September 30 and pay the $7 filing fee.
Is an operating agreement required in Pennsylvania?
No, an operating agreement is not required in Pennsylvania, but it’s a good idea to have one in place to assist with settling disputes, provide profit distribution information, and lay out other key details and procedures of the business.
Chloe Packard and Rudri Bhatt Patel contributed to this article.
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