Pennsylvania LLC: Everything You Need to Know
When creating a Pennsylvania LLC, you need to understand what an LLC is and if it is a viable business structure for your company. 3 min read
If someone sues an LLCand wins or if an LLC incurs debt, the owner's assets are usually shielded and cannot be taken. In reality, however, debts are secured using the personal assets of some or all of the owners, thereby making an owner’s personal assets at stake in the litigation or collection, even though the owners created an LLC.
For instance, a bank will typically not loan an LLC cash without an owner personally pledging to secure the loan. This means that the bank can collect from the pledgor’s personal assets should the loan not be repaid.
Availability and Governance
Today, LLCs are available in almost every state, though each state authorizing theuse of an LLC has its own guidelines that restrict LLC activity.
In Pennsylvania, the Pennsylvania Consolidated Statutes govern LLCs under Title 15 chapter 89, in the section discussing LLCs.
Forming an LLC in Pennsylvania
Step 1: Name
This is the first and perhaps most important step in creating your LLC. Here are some ideas and rules:
- Use a name that is distinctive, is communicative, and will project your company in a positive and professional light.
- Research to make certain that the name you choose is best suited to your business and can be easily searched by clients.
- The entity name that you choose must contain “Limited Liability Company” or “L.L.C.” or “LLC.”
- Note that restricted words require even more paperwork, such as Bank, Attorney or University, and may require that someone who is licensed, e.g., a doctor, to be part of the LLC.
- Do not use prohibited words are, which are those that can confuse your LLC with a governmental agency.
- Thes name must be distinguishable and different from other business entities that are on file at the Pennsylvania Department of State.
- You can make certain that the name is not taken by doing a search on Pennsylvania’sDepartment of State’s website.
- Type the name into the space labeled "Business Entity Name/ID," then select "Corporate name availability" in the drop-down menu.
- Search similar-sounding names to make sure your business will be easily distinguished from other local LLCs.
Step 2: Choosing a Registered Agent
Pennsylvania law requires that you nominate a Registered Agent for an LLC. Here are some facts:
- A Registered Agent, in legal terms, is called a “registered office.”
- A registered agent is either a person or business that will send and receive legal papers, such as summonses and other processes such as state filings, on behalf of an LLC.
- Your registered agent must be a Pennsylvania resident if it is a person; it must be transacting in Pennsylvania if it is a business.
- You can elect a person from within the company, which includes electing yourself.
- A registered office must have a street address that is in Pennsylvania.
- A registered office must have regular business hours.
- It is recommended that you choose a registered office that has both mail forwarding and information shielding.
- If the event that you are subpoenaed, your registered office's address will be the listed address.
Step 3: Certification of Organization
- You can create a Pennsylvania LLC by filing a Certificate of Organization Domestic Limited Liability Company with the Pennsylvania Department of State.
- Together with the certificate, you will file a completed New Entity Docketing Statement.
- The completed form will include your LLC's name, the contact information for the individual or individuals responsible for initial tax reports; what is the LLC’s purpose; when is the effective date, if any; what is its EIN, if any; and what is the fiscal yearend.
A submitted certificate must contain the following information:
- Your LLC’s name.
- Its registered agent’s name, if applicable, or a registered address.
- The name and address of each organizer.
- A description of the type of management.
- An effective date, if different than the filing date.
- Signatures and addresses of organizers.
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