Form a Pennsylvania LLC
At LawInc, we keep things simple and allow you to easily form your Pennsylvania (PA) Limited Liability Company online or over the phone (800-989-5294).
Pennsylvania LLC formation is simple with LawInc.com. Once you submit your application, we check name availability, prepare your Articles of Organization and file your paperwork with the Pennsylvania Department of State. As soon as your Pennsylvania LLC is formed, we forward you your final paperwork.
A Pennsylvania LLC can help protect your personal assets, such as your home, car or family savings. In the event of a lawsuit or if your business should fail, your personal assets cannot be touched, assuming you have properly formed, capitalized and maintained your LLC. This limited liability feature of a Pennsylvania LLCs is not available in a sole proprietorship or general partnership, where the business owners are personally liable for all business debts.
Let LawInc walk you through the Pennsylvania Limited Liability Company formation process. Our clear, concise and easy to use website, helps keep things simple.
Pennsylvania LLC Name
The first step in forming a Pennsylvania Limited Liability Company (LLC) is selecting the business name. Pennsylvania LLC names:
- Must contain the words “Limited Liability Company” or the abbreviation “L.L.C.” or “LLC”, or the combination “Ltd. Liability Co.” or “Ltd. Liability Company.”
An available Pennsylvania LLC name may be reserved for 120 days.
LawInc.com permits you to choose up to three names and will conduct a name search for your Pennsylvania LLC, prior to filing.
Pennsylvania LLC Formation
Pennsylvania LLC Filing Procedure: When forming a Pennsylvania LLC, the Pennsylvania Articles of Organization must be filed with the Pennsylvania Department of State. The Pennsylvania Articles of Organization must state:
- The Pennsylvania LLC name.
- Name and address of each Pennsylvania LLC organizer.
- Street address of Pennsylvania registered agent.
- Street address of principle place of business.
Pennsylvania LLC Organizers: An Pennsylvania limited liability company can be formed by one (1) or more organizers.
Pennsylvania LLC Members: Pennsylvania LLCs require 1 or more members. There is no residence or age requirement. Pennsylvania LLC members are not required to be listed in the Articles of Organization.
Pennsylvania LLC Duration: The period of duration of a limited liability company shall be perpetual unless the Pennsylvania Articles of Organization place a limitation on the company’s existence or until dissolution or termination.
Pennsylvania LLC Purpose: A Pennsylvania Limited Liability Company may be formed to transact any or all lawful businesses for which LLCs may be organized under the Law, except the business of banking or insurance.
Pennsylvania Registered Agent: An Pennsylvania LLC must maintain a registered agent and office to receive service of process in Pennsylvania. The Pennsylvania registered agent should be available, at an Pennsylvania physical address, during normal business hours to accept important legal and tax documents on behalf of the Pennsylvania LLC. The registered agent can either be (1) a domestic entity or a foreign entity that is registered to do business in Pennsylvania or (2) an individual resident of the state. A Pennsylvania LLC may not act as its own agent.
Pennsylvania LLC Operating Agreement: After filing, it is highly advised that an operating agreement is drafted which dictates the LLC internal affairs and management. There is no set criteria, but an Pennsylvania LLC operating agreement should reference how the Pennsylvania LLC is managed, allocation of profits and losses and member capital contributions. The Pennsylvania LLC operating agreement does not need to be filed.
Pennsylvania Professional LLC: Certain Pennsylvania LLCs are required to file a statement as to whether the company is a restricted professional company. Pennsylvania LLCs engaging in the following services are considered restricted professional LLCs and must file such a statement: Chiropractic, dentistry, law, medicine & surgery, optometry, osteopathic medicine & surgery, podiatric medicine, public accounting, psychology, veterinary medicine.
Pennsylvania LLC Post-Filing Requirements
Pennsylvania LLC Decennial Report: Pennsylvania LLCs are required to file Decennial Reports. PA decennial reports are due every 10 years in the years ending with a “1”. You have a 1 year period to file these reports during the last year of each 10 year period.
Pennsylvania LLC Taxes
Pennsylvania State Income Tax: The LLC tax rate for Pennsylvania is variable, depending on Pennsylvania taxable net income.
Federal Income Tax: An advantage of the LLC is its tax flexibility. LLC members are allowed to select how the entity will be taxed. An LLC may be classified for federal income tax purposes as either a:
- Sole proprietorship
- Partnership, or
Single member LLCs are treated the same as sole proprietorships. Profits are reported on Schedule C as part of your individual 1040 tax return. Self-employment taxes on Pennsylvania LLC net income must be paid just as you would with any self-employment business.
Most Pennsylvania multi-member LLCs elect to be treated as partnerships by the IRS and file IRS Form 1065. On this form, Pennsylvania LLC profits are reported and allocated to each of the owners according to the Pennsylvania LLC’s operating agreement. Each owner is given a Schedule K-1, which shows each owner’s share of LLC income or loss. The owner then reports and pays taxes on this income on the owner’s annual 1040 income tax return. It is important to note that as with sole proprietorships, all Pennsylvania LLC profits are taxed to the owners, even if they are not actually distributed by the LLC. This situation can arise when the LLC needs to use its profits to pay ongoing expenses.
If pass-through taxation is not desired, an LLC may elect to be taxed as a corporation by completing IRS Form 8832. If this election is made, the LLC is taxed as a C corporation by the federal government. Because the corporate income tax rates for the first $75,000 of corporate taxable income are lower than the individual income tax rates that apply to the taxable income of non-corporate taxpayers, it is possible a net income tax savings can result from this tax election. Additionally, an LLC can be taxed like an S corporation by filing IRS Form 2553.
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. An EIN is typically required if the Pennsylvania LLC has more than one owner or any employees.
Pennsylvania LLC Dissolution/Cancellation
Pennsylvania LLC Dissolution/Cancellation: In order to dissolve or cancel an Pennsylvania LLC, the members or managers must file Certificate of Dissolution with the Pennsylvania Department of State.
Acts Triggering Pennsylvania LLC Dissolution: A Pennsylvania LLC can be dissolved upon the happening of one of the following:
- At a time specified in the Articles of Organization or operating agreement;
- Upon occurrence of events specified in the Articles of Organization or operating agreement;
- Consent by the specific number or percentage of members indicated in the operating agreement;
- At any time there are no members; or
- Judicial decree to dissolve by a Court.