Starting an LLC in PA: Everything You Need to Know
If you are wondering how an LLC in PA works, you are wondering about the process of forming and registering a limited liability company in the state of PA.3 min read
Starting an LLC in Pennsylvania
If you are wondering how starting an LLC in PA works, you are wondering about the process of forming and registering a limited liability company in the state of Pennsylvania. This is a multi-step but relatively simple process that could be done in a matter of hours, although it is recommended that one not rush through such a weighty process, or do so without proper research or legal advisement.
Starting an LLC in Pennsylvania can be achieved through a process of nine steps or less, the steps of which are:
1.Choose an LLC name. All LLCs must have a name, and in Pennsylvania, this name must include the term “Limited Liability Company,” “Company,” or “Limited,” or some variation of these. This name also cannot include terms like “FBI,” “Secret Service,” or “Treasury,” or be an exact duplicate of an existing LLC name. To see if your desired LLC name can be used, you can perform an LLC name search through the State of Pennsylvania’s website.
2.Choose a Registered Agent. It is also required that your LLC be represented by a registered agent in Pennsylvania. A registered agent is an individual or business entity authorized to serve and receive legal papers on your behalf. Such an agent must be a Pennsylvania resident (if an individual) or authorized to do business in Pennsylvania (if a business).
3.File a Certificate of Organization. The Certificate of Organization is a legal document that will officially register your LLC with the State of Pennsylvania. It must contain the following information: the name and address of your LLC, your LLC’s registered agent, and your LLC’s organizers; whether professional services will be provided; and what type of management it will have (manager-managed or member-managed). This filing must also include a New Docket Statement, which covers tax information. The filing fee is $125 for both documents.
4.Acquire an EIN. An EIN, or Employer Identification Number, is a number used by the IRS to identify a business for tax filing purposes. Unless your business is single-member without any employees, you will be required to acquire an EIN. This can be done for free through the IRS’s website.
5.Open a Business Bank Account. This is not absolutely required, but it is highly recommended, as a business bank account will allow you to separate your personal business and assets from your LLC’s business and assets. This will strengthen your limited liability by making the separation of personal and LLC-related business more clear, and will also make tax filing and accounting easier.
6.Register for the Pennsylvania Sales Tax. This is necessary if you plan to sell taxable services or goods in Pennsylvania. This registration must be renewed after five years.
7.Get Your Books in Order. An accounting system that is well managed will make it easier to track your finances and file your taxes, and there is a variety of software that can help you do this. Consulting a professional accountant may also be advisable. It is also advisable that you order your accounts before you open for business, rather than after.
8.Comply with Local, State, and Federal Regulations. Depending on your type of business and where your business is located in the state, it may be necessary to register for various licenses and permits. These licenses and permits can include heath, signage, and building permits, and may come with registration or renewal fees. To find out what licenses and permits you must obtain, consulting the Pennsylvania Small Business Development Centers (SBDC), the U.S. Small Business Administration (SBA), and your local government offices may be helpful.
9.Comply with Hiring Processes. If you plan to hire employees in Pennsylvania, there are a number of additional steps you must take. You must register for State Income Tax Withholding and Unemployment Insurance Tax, acquire Workers Compensation Insurance (in most cases), verify that your employees are legally cleared to work in the United States, report new hires to the state, place compliance posters in visible areas of your workplace, and pay at least minimum wages as often as is legally required by the state.
Such are the steps for starting an LLC in Pennsylvania, and although they will vary somewhat in the particulars depending on you business, they are the same in the general details throughout the state. If you need further help understanding the process of starting an LLC in PA, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.