Forming an LLC In Pa: Everything You Need to Know
An LLC, or Limited Liability Corporation, is a type of business structure that is formed as a hybrid between a corporation and a partnership.3 min read
An LLC, or Limited Liability Corporation, is a type of business structure that is formed as a hybrid between a corporation and a partnership. By being viewed as an LLC, the owner's assets will be secured in the event that the company is sued or debts are levied against them. While the limited liability is supposed to protect the assets of the owners, often the personal assets of one of the owners are used to secure the debts, so in this event, the asset may be lost to cover the debt.
An example of this is when an LLC takes a bank loan. Most often the bank will not issue the loan to the company unless one of the owners provides a personal security agreement for repayment of the loan which will secure the loan using that owner private assets. This would cause forfeiture of the owner's personal assets in the event of a default.
You can file for an LLC in almost every state although each state makes their own laws restricting LLCs and requirement and rules that they must follow.
LLCs in Pennsylvania
If you file for an LLC designation in the state of Pennsylvania, it is relatively easy although the state of Pennsylvania does have its own unique requirements in regards to forming an LLC. If you are interested in forming an LLC in Pennsylvania, you will be required to register your company with the Department of State which will entail paying necessary filing fees, meeting naming requirements, and filling out all the necessary forms.
Requirements and Process in Forming an LLC
There are five primary requirements that the state of Pennsylvania will require when forming an LLC including:
- Forms and Fees
- Formation requirements
Two forms that a new LLC must file with the Department of State include a DSCB 15-8913, or Certificate of Organization and a DSCB 15-134A, or Docking Statement. These will need to be given to the Corporation Bureau and can be mailed, faxed, or delivered in person.
The Certificate of Organization will require multiple pieces of information including:
- The LLC Name
- Registered agent's name
- Registered address
- Organizer's names and addresses
- Type of management
- Effective date
- Copy of the New Entity Docketing Statement
- Copies of Consent of Appropriation or Use of Similar Name is applicable
When filing a Certificate of Organization, you will be required to pay a filing fee and the usual processing time will take about five working days unless the volume of paperwork at the Corporate Division is high. This processing time does not include mailing time. If you are in a hurry, you may try coming as a walk-in where the submission will be processed as you wait.
When it comes to naming your LLC in Pennsylvania, it may be confusing, but a good rule of thumb to make sure your name gets approved is making sure to include all the required words for an LLC and make sure that your name is apparently distinguishable from other LLC names of companies registered in Pennsylvania. To prevent a delay, you can perform a name check for availability before filing your LLC formation documents.
Steps to Start an LCC in Pennsylvania: Naming the LLC
One of the most critical steps of starting your LLC is coming up with your business name. Under Pennsylvania law, your LLC must require one of the following words to designate it as an LLC. Words required to be included are:
- Company or Co
- Limited or LTD
- Limited Liability Company or LLC
Your LLC name must be distinguishable from other business entities already filed with the Pennsylvania Department of State and cannot be too similar to names that have been rejected previously by the state.
You can perform an online search to see if your name is available by typing the name into the "Business Entity Name/ID" field and selecting "Corporate name availability" from the drop-down. Once choosing your name, you can file to reserve it by filling out the Name Reservation Form (Form DSCN 15-208) and pay a filing fee of $70 to hold your business name for 120 days until you file the LLC paperwork.
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