How to start an LLC in Pennsylvania
Doing business as an LLC can provide a lot of benefits under the right circumstances. The LLC business structure provides you with some liability protection, and unlike a corporation, it allows your income to pass through to your personal income taxes rather than incurring an additional tax at the corporate rate. Tax laws can vary by state, but this benefit holds in Pennsylvania.
According to Ryan Crivella, a Pittsburgh-based attorney specializing in entrepreneurial ventures, there are additional benefits to opening your LLC in Pennsylvania depending on your industry. He cites Western Pennsylvania in particular as an area of growth for those in the fields of software, robotics, advanced manufacturing and other tech innovations.
“The region’s access to world class research universities, a skilled workforce and supportive entrepreneurial ecosystems provides opportunities for growth and collaboration,” says Crivella. “By establishing an LLC in Pennsylvania, entrepreneurs can leverage these advantages and position their businesses at the forefront of cutting-edge industries, fostering innovation and paving the way for long-term success.”
Here are 9 steps to start an LLC in Pennsylvania:
9 steps to start an LLC in Pennsylvania
1. Set up a Pennsylvania business one-stop shop account
In Pennsylvania, you can streamline your business setup process by first creating a Pennsylvania business one-stop shop account, which is Pennsylvania Department of State’s online filing portal. This account will allow you to easily file key business documents, including formation and annual report documents. In addition, it will allow you to more efficiently manage your business with the state using stored documents and even business checklists.
To create an account, visit the Pennsylvania Department of State business one-stop shop page and click “register.” Follow the prompts to set up your free account.
2. Name your LLC
To successfully name your Pennsylvania LLC, your chosen name must be unique from other names registered in the state and comply with Pennsylvania’s requirements. To ensure it follows requirements, review Pennsylvania’s naming guidelines. Next, you can check name availability using Pennsylvania’s business search tool.
If the name is available but you’re not quite ready to officially register your business with the state, you can reserve the business name for future use. Reservations can be made using the Secretary of State’s online filing portal by filling out the name reservation form. The reservation fee is $70 and reservations are effective for 120 days.
To learn more about how to name your business, including legal and best practices, read our business naming guide.
3. Select a registered office
In Pennsylvania, you’ll need to have a registered office for your LLC. That could be the same address as the business’s physical address. However, there does need to be someone constantly available at the address during all regular business hours to accept legal documents on you LLC’s behalf. If that’s too much of a burden, you may want to outsource the responsibility to a commercial registered office provider (CROP).
In other states, a CROP is referred to as a registered agent service. To learn more about this requirement, read our registered agent guide. Before you hire a registered agent or CROP in Pennsylvania, review the best registered agent services to find your perfect match.
4. Submit LLC formation paperwork
Unlike many other states, Pennsylvania requires two forms to register your business with the state: an application for a certificate of organization (often called articles of organization) and a docketing statement. You can file both of these forms using your business filing portal that you set up in step one. The application for your certificate of organization comes with a filing fee of $125. This fee can be waived if you are a veteran or reservist.
Uniquely, using this form, Pennsylvania also allows LLCs to register as benefit companies, which means they are for-profits that also serve the public good. To qualify, the LLC must provide a “material positive impact on society and the environment.” That could look like providing products or services to low-income community members, promoting the arts or sciences or some effort to preserve the local or global environment, for example.
You also have to submit a new entity docketing statement (also through your business filing portal). This is a brief form that serves as a cover sheet for your certificate of organization. It primarily outlines who to contact come tax time.
To learn more about how to prepare and file your certificate of organization, read our LLC articles of organization guide.
5. Draft an operating agreement
An operating agreement is a legally-binding document that outlines your LLC’s operating and financial procedures. Pennsylvania doesn’t legally require an operating agreement to start your LLC, but we strongly recommend LLCs draft one to protect its members and business interests.
“An operating agreement is often advisable for an LLC, even when not legally required,” says Crivella. “Amongst other reasons, it brings clarity, legal protection, credibility and the ability to plan ahead for the company’s operations and governance. These are complicated documents and it is advisable to consult with an attorney so that they are tailored to a business’s specific needs.”
To learn more about how to draft an operating agreement, its benefits and its uses, read our LLC operating agreement guide.
6. Apply for an employer identification number (EIN)
Once you have your certificate of formation from the state, you can apply for a free employer identification number (EIN) with the IRS. Your EIN will allow you to complete tasks like filing federal taxes and managing payroll withholdings for employees. You can complete the application entirely online in 15 minutes or less. Upon submission of the form, your EIN will be generated and provided to you on the spot.
To learn more about how to apply for an EIN and its uses, read our EIN guide.
7. Register with myPATH for state taxes
Most LLCs need to get a state tax ID through Pennsylvania’s myPATH service. You may need to register with myPATH if your LLC:
Has employees.
Is required to collect state sales tax.
Pays wine excise tax.
Sells fireworks.
Acts as a booking agent.
Sells tobacco products.
Operates in the gambling space.
Rents vehicles.
The state provides a full list of business taxes you can pay through myPATH. If you’re a single-member LLC running a service-based business with no employees, you may not need to register with myPATH.
To learn more about obtaining a tax ID, read our state tax ID guide.
8. Explore business license requirements in Pennsylvania
Pennsylvania doesn’t have a general business license requirement, but you may be required to hold licensure if you work in specific fields. For example, barbers must secure licensure through the State Board of Barber Examiners while occupational therapists are overseen by the State Board of Occupational Therapy Education and Licensure.
The state does provide an incomplete list of professions that require licensure. You can use this resource to submit support tickets to find out more about industry-specific licensing requirements, such as those for accountants, chiropractors, funeral directors, nurses or real estate professionals. However, if you’re unsure about requirements in your field, it’s wise to consult with a Pennsylvania business attorney.
Another reason an attorney consult is a good idea is because your township or borough may have additional licensure burdens beyond what the state requires. Depending on your municipality, these requirements may be easy to find on the municipal website or they may require a little more digging. Your search can be sped along with the help of local legal consult.
9. Submit annual reports
An annual report updates the state on key business information, such as your business’s registered office address and contact person. In Pennsylvania, the fee for these annual filings are incredibly nominal — a mere $7.
Right now, Pennsylvania LLCs are only required to submit reports every 10 years. The requirements change to annual filings effective 2025, though, so if you form a Pennsylvania LLC in 2023, you won’t make it to the 10-year mark. This is a big change for Pennsylvania LLCs, so if you don’t comply the first couple of years, the state will provide you with a grace period. But starting in 2027, if you don’t file your annual reports, your LLC could be subject to administrative dissolution.
When this takes effect, the deadline for filing will be September 30 of each year for LLCs. You will know when this requirement has gone into effect because you will receive a notice at your registered office address.