LLC

Stages of opening an LLC in Pennsylvania

Step 1: Name your LLC

In Pennsylvania, those wishing to establish a Limited Liability Company (LLC) must follow strict guidelines laying out how to start an LLC. An important first step is naming the company. Generally, there are two requirements set by state statute with regard to naming an he LLC in the certificate of organization:

  1. the name must contain language specifying that the entity is an LLC, and
  2. the name must be available for use in the state in question.

In Pennsylvania, the LLC’s name must contain the words “Limited Liability Company,” or “Limited Company,” or “LLC.” Failure to include one of these designated phrases may result in personal liability of the members.

If you will be operating your LLC under a name that is different from your own name or which does not readily identify you as the business owner, you will need to file a Registration of Fictitious Name form (DSCB:54-311) in Pennsylvania.

You must first determine whether the name the LLC organizers wish to use is available for use in Pennsylvania. To do this, an attorney in Pennsylvania can contact the Pennsylvania Secretary of State’s office. The Pennsylvania Secretary of State will usually grant an approval when the certificate of organization is filed or the name is formally reserved pursuant to PA law.

You may form an LLC for any valid business purpose. In some states, two or more organizers are required to form an LLC. However, Pennsylvania’s LLC statute, 15 Pa.Cons. Stat.  §8821(a), states that “[o]ne or more persons may act as organizers to form a limited liability company by delivering to the department the certificate of organization.” By law, an attorney is not required to prepare the certificate of organization; however, due to the complex nature and tax ramifications of the LLC, legal counsel should be sought in preparing this and other documents. 

Under the “check-the-box” regulation, how to get an LLC, an LLC that was a corporation is automatically treated as a partnership or sole proprietorship for federal income tax purposes. While others may elect to be treated as corporations for federal income tax purposes, a single-member LLC may also elect to be taxed as a corporation. If you’re forming an LLC and do not make this election, the LLC will be considered a disregarded entity, and income reported as part of the tax return of the owner. Whether you are viewed by the IRS as a corporation or a disregarded entity for tax purposes, the documents needed will usually remain the same.

Step2: Decide Who’s Who: Member v. Manager

Management of an LLC is very flexible. All members of the LLC are granted the right to manage its business unless otherwise provided for in the LLC’s certificate of organization. Pennsylvania statutes typically permit the owners of an LLC to allocate the management authority among its members. They may decide to be managed by one individual, by a committee, or by a majority of owners. A written agreement among the members, referred to as an Operating Agreement, sets forth the details concerning the management of the LLC.

Step 3: Choose a Registered Agent

In Pennsylvania, all LLCs must appoint a registered agent to accept service of process and all other paperwork from the Secretary of State in Pennsylvania. If the LLC operates in multiple states, it must appoint a registered agent in every state in which it operates in compliance with Pennsylvania law. 

Step 4: Form LLC

An LLC is formed when the Certificate of Organization (DSCB:15-8821), the document used to establish the business structure, accompanied by a PA Docketing Statement form (DSCB:15-134A), the form used to register your new LLC for tax purposes in Pennsylvania, is filed with the Bureau of Corporations and Charitable Organizations of Pennsylvania. Once approved by the Pennsylvania Secretary of State, the Certificate of Organization, a legal document stating that the LLC was duly formed and is officially recognized as a legal entity in Pennsylvania, is issued by the state. The Docketing Statement is then submitted to the PA Department of Revenue for assigning the LLC a Tax Identification Number. The LLC is then formally created under the PA LLC Statute ( 15 Pa. Cons. Stat. §§8901-8998). 

Step 5: Decennial Reports

A PA LLC must file a Decennial Report (Form DSCB:54-503) every ten years indicating that the LLC is still conducting business. LLCs, in most states, are required to file annual reports. Exceptions to the PA ten-year reporting requirement include Professional LLCs (PLLCs) and foreign LLCs. They are required to file a Certificate of Annual Registration (Form DSCB:15-8221/8998) with the PA Department of State. Failure to file these annual reports can cause the LLC to be dissolved after several notices by the state of Pennsylvania.

What documents do you need?

Some of the documents necessary to start an LLC include:

  • Certificate of Organization (DSCB:15-8821)
  • PA Docketing Statement (DSCB:15-134A)
  • Operating Agreement
  • Fictitious Name Statement (DSCB:54-311), if the LLC plans not to use legal name or company name to do business. 

Generally, these documents must include:

  • The name of the LLC.
  • The address of the initial designated office in Pennsylvania.
  • The name and address of the registered agent for service of process in Pennsylvania.
  • The name and address of each organizer.

How an LLC lawyer can help

Our attorneys can help to smooth the LLC creation process for you. We will begin by drafting the Certificate of Organization, Docketing Statement, and other required documents while checking the Pennsylvania statutes for any updated LLC requirements. We can create the LLC or guide you on how to start an LLC. We will make sure the name being used for the LLC is available and that it conforms to Pennsylvania statutory requirements. Our attorneys know the exceptions and the ins and outs of forming an LLC in Pennsylvania, including details such as the prohibition of using a PO box for a registered agent for service of process in the state of Pennsylvania and most other states. Our attorneys will ensure all documents are appropriately signed and filed and will also draft a fair and balanced Operating Agreement. 

Consult an experienced Pennsylvania LLC attorney. When it comes to setting up an LLC, we are educated, experienced, and more than competent attorneys who will set up your LLC efficiently and help you to become an effective business owner and/or member of your own LLC.

(866) 691-5299