Form a Pennsylvania Corporation
Over 2.6 companies do business in Pennsylvania. Incorporate in Pennsylvania (PA) online now. Forming a Pennsylvania corporation has never been easier. Incorporate in Pennsylvania with the Pennsylvania incorporation experts. We will assist you with forming your Pennsylvania corporation, the right way. To get started, simply click on “Order Now.” Please feel free to call us, anytime, with any questions.
Incorporating in Pennsylvania
In Pennsylvania, forming a corporation can be vital to a Pennsylvania business. At LawInc, we prepare your Pennsylvania corporation Articles of Incorporation, bylaws, stock certificates, stock ledger and more. We can even obtain your Pennsylvania corporation Tax ID number and file your Pennsylvania S corporation election with the IRS.
Pennsylvania Incorporation Information
The following Pennsylvania incorporation information will likely be helpful when deciding to incorporate in Pennsylvania.
Pennsylvania Corporation Name
The first step in forming a Pennsylvania corporation is selecting the business name. Pennsylvania corporation names:
- Must contain “Association,” “Fund,” “Syndicate,” “Corporation,” “Corp.,” “Company,” “Co.,” “Incorporated,” “Inc.,” “Limited” or “Ltd.” or words or abbreviations of like import in languages other than English.
An available Pennsylvania corporation name may be reserved for a 120 day period.
LawInc.com permits you to choose up to three names and will conduct a name search for your Pennsylvania corporation, prior to filing.
Pennsylvania Corporation Formation
Pennsylvania Filing Procedure: To incorporate in Pennsylvania, you must file Pennsylvania Articles of Incorporation with the Pennsylvania Department of State.
The Pennsylvania Articles of incorporation should include:
- Name of the Pennsylvania corporation.
- Name and address of the Pennsylvania registered agent.
- Mailing address of the Pennsylvania corporation.
- Tax closing month of the Pennsylvania corporation.
- Nature of corporation’s business or purpose.
- Number of shares to be issued.
- Name and address of each incorporator of the Pennsylvania corporation.
- Name and address of board of directors..
- Effective date of the Pennsylvania corporation.
- Signature of Pennsylvania corporation incorporator.
Pennsylvania Corporation Authorized Shares: There is no minimum or maximum number of authorized shares since state incorporation fees are not based on the share structure. There is no minimum amount of paid in capital required to commence business.
Pennsylvania Incorporator: Minimum number of incorporators is one (1) (a natural person of full age or a corporation) and there is no requirement that the incorporator be a resident of Pennsylvania.
Pennsylvania Corporate Directors: The minimum number of directors is 1. A Pennsylvania corporation director must be a natural person at least 18 years old. Directors need not be listed in the articles.
Pennsylvania Corporation Purpose: It is acceptable to state either alone or with a specific purpose clause, “The purpose of the corporation is to engage in all lawful business for which corporations may be incorporated under the Business Corporation Law of 1988.”
Pennsylvania Corporation 1244 Stock: Election to have stock classified as IRC Section 1244 stock allows for a substantially larger application of the deduction from business losses to ordinary income than regular stock. With regular stock, you can only offset $3,000 against ordinary income. With the issuance of Section 1244 Stock, the corporation can claim an ordinary loss deduction of as much $100,000.
Pennsylvania Registered Agent: A Pennsylvania corporation must maintain a registered agent and office to receive service of process in Pennsylvania. The Pennsylvania registered agent should be available, at a Pennsylvania physical address, during normal business hours to accept important legal and tax documents on behalf of the Pennsylvania corporation. The registered agent can either be (1) an individual with a physical Pennsylvania address or (2) a corporation authorized to serve as registered agent.
Pennsylvania Corporation Limitation of Directors’ Liability: The articles of incorporation may contain, within the limitations prescribed by the Pennsylvania General Corporation Code, a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for the breach of fiduciary duty as a director.
Pennsylvania Professional Corporation: Pennsylvania Professional corporations are corporations organized for the purpose of providing professional services. Typically, professional corporations must be organized for the sole purpose of rendering professional services of the licensed practitioners.
Pennsylvania Corporation Post-Filing Requirements
Pennsylvania Corporation Annual Report: The Pennsylvania Department of State requires an annual report for professional corporations only. All other corporations need to file a report every 10 years. The due date is January 1st and fee for the decennial report is $70.00.
Pennsylvania Corporation Newspaper Publication: Pennsylvania corporations are required to publish proof of incorporation in two newspapers of general circulation, one a legal newspaper. According to Pennsylvania law, the publication may appear prior to or after filing of the Pennsylvania Articles of Incorporation. The Pennsylvania Department of State requires that publication must take place in two newspapers located in the county of your registered office provider. One is required to be a legal newspaper. The notice should set forth briefly the corporate name and a statement that the corporation has been incorporated under the provisions of the Business Corporation Law of 1988.. There is no specific deadline. The Pennsylvania Department of State does not require filing of proof of publication. The affidavit of publication should be kept with the Pennsylvania corporation’s records. All corporations, foreign and domestic, for profit and nonprofit, including fictitious name registrations, are required to publish notice of their incorporation in Pennsylvania. LLCs are not required to publish in Pennsylvania.
Pennsylvania Corporate Minutes: Pennsylvania corporations are required to hold and document annual shareholder and director meetings.
Pennsylvania Corporation Taxes
Pennsylvania Corporation Taxes: For information on the Pennsylvania state income tax rate, visit: http://www.revenue.state.pa.us/
Pennsylvania C Corporation: All Pennsylvania corporations formed by default are “C” corporations. A Pennsylvania C corporation is a Pennsylvania corporation that has not made an election to be an “S” corporation. The term C corporation is specifically used because the entity is taxed under subsection C of the IRS code. Pennsylvania C corporations are taxed at two levels (“double taxation”). This means that the corporation itself pays its own tax when it makes money (the first tax). The owners or shareholders are then taxed again when they are paid a salary or dividend by the corporation (the second tax). Despite double taxation, Pennsylvania C corporations offer many planning and benefit opportunities.
Pennsylvania S Corporation: A Pennsylvania S corporation is a corporation that has made an election with the IRS to be treated for tax purposes as a “pass-through entity.” This means that corporate profits and losses are passed through to the shareholders (owners) who report them on their own personal tax returns and pay the tax at the individual level. The corporation pays no federal income tax at the corporate level. Pennsylvania S corporations are not subject to the double taxation C corporations encounter. The State of Pennsylvania recognizes S corporation status. Pennsylvania does not require a state election. However, Pennsylvania S corporations are still subject to a separate 1.5% S corporation fee, which is based on the corporation’s net income. Effective for tax years beginning on or after January 1, 2006, all federal Subchapter S Corporations are automatically Pennsylvania S Corporations.
These are the 3 main advantages of forming a Pennsylvania S corporation:
- No double taxation: One of the main advantages of Pennsylvania S corporation status is that it avoids the double taxation that occurs with a regular Pennsylvania C corporation. In a Pennsylvania C corporation, the corporation pays income tax on its profits and, if those profits are distributed to shareholders, the shareholders pay income tax on the distribution.
- Loss deductions: The availability of losses. Shareholders of a Pennsylvania S corporation generally may deduct their share of the corporation’s net operating loss on their individual tax returns in the year the loss occurs. Losses of a Pennsylvania C corporation, however, may offset only the corporation’s earnings.
- Self-employment tax savings: By electing S corporation status, only the earnings actually paid out to you as salary are subject to payroll taxes; money left in the business is not subject to payroll taxes or self-employment tax. All income passes through, but its tax status depends on whether it is classified as salary or ordinary income.
Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. All Pennsylvania corporations should obtain an EIN.
Pennsylvania Corporation Dissolution
Pennsylvania Corporation State Dissolution Requirements: A Pennsylvania corporation can be voluntarily dissolved by filing Articles of Dissolution, along with a Tax Clearance Certificate, with the Pennsylvania Department of State. A notification letter, regarding winding-up proceedings of the Pennsylvania corporation, must also be mailed by certified or registered mail to each known creditor of the Pennsylvania corporation. The notice must also be published once in two newspapers in the count of the registered office, unless there is only one county newspaper. Proof of publication need not be filed.
Pennsylvania Corporation Federal/IRS Dissolution Requirements: Corporations are required to file IRS Form 966, Corporate Dissolution or Liquidation. A final tax return should be filed with the IRS. Form 966 should be filed along with the final tax return. Final state tax returns may also need to be filed. Follow up with an accountant regarding all tax related requirements.