The process of setting up a limited liability company (LLC) varies from state to state. Pennsylvania maintains its own specific set of steps to follow. For new business owners, setting up an LLC can get confusing, but with this helpful guide, we remove the guesswork. Read on to learn how to register an LLC in Pennsylvania.

Types of LLCs in Pennsylvania

Pennsylvania, as with many other states, offers a wide variety of LLC types to suit your business. Whether you’re a solo operator who needs an LLC structure to protect your business or a team of founders, the Commonwealth has an option for you:

  • Single-member LLC: A single-member LLC is a company consisting of just one owner, known as a member.
  • Member-managed LLC: One kind of multi-member LLC, a member-managed LLC, places authority on the owners of the LLC (called “members”). Each owner/member has a voice in decision-making, but depending on the specifics of the operating agreement, the percentage of ownership may correspond to a proportional say in business operations. Most small LLCs are member-managed.
  • Manager-managed LLC: Another kind of multi-member LLC, the manager-managed LLC requires owners to elect a manager or managers to handle the day-to-day business decisions of the company. Members still retain authority over the larger company, but the manager is the main legal agent of the LLC, allowing them to quickly make decisions on behalf of the business. Large LLCs with many members are more likely to be manager-managed.
  • Restricted LLC: LLCs performing specific professional services are required under Pennsylvania law to register as a restricted professional company. The list of restricted professional services includes chiropractic, dentistry, medicine, surgery, optometry, osteopathic medicine, podiatric medicine, public accounting, psychology, veterinary medicine and law.
  • Benefit LLC: A benefit LLC may be formed if one of the purposes of the limited liability company is to create general public benefit. General public benefit is defined as something offering a positive material impact on society and the environment as assessed against a third-party standard. This might include providing low-income or underserved individuals with beneficial products and services, promoting economic opportunity for individuals or communities, preserving the environment, promoting the arts, sciences or advancement of knowledge, promoting economic development, improving human health or any other accomplishment of benefit to society.
  • Domestic LLC: Any of the previously listed LLCs can be either domestic or foreign, depending on whether or not the business is formed in the state of Pennsylvania. An LLC formed in Pennsylvania will be considered “domestic” while a legal entity that conducts business in Pennsylvania but was formed outside of the state is a foreign LLC.
  • Foreign LLC: If any kind of LLC is formed outside of Pennsylvania but is doing taxable business in the state, it will need to register as a foreign LLC. The Pennsylvania Department of Revenue has additional information on whether the Commonwealth’s economic nexus applies to a business, which would require the foreign LLC to also file certain tax reports.

3 Steps To Create an LLC in Pennsylvania

Establishing an LLC in Pennsylvania costs $125 and requires the filing of a number of different business and legal documents with the Pennsylvania Department of State. You can apply online or register by mail. Read on for a breakdown of the process in three easy steps.

Step 1. Choose a Unique Name for Your LLC

Imagine filing your LLC and seeing your application rejected because the name you chose was already taken. Not a pleasant experience. Fortunately, it’s also avoidable.

Before you file an LLC, use Pennsylvania’s business entity search engine to see if the name is available. Determining availability as quickly in advance as possible will save you a lot of time and money. If your name is available but you aren’t ready to register your business, you can reserve a name for up to 120 days for a fee of $70.

Pennsylvania LLC Naming Rules

When registering an LLC in Pennsylvania, keep in mind that there are a few rules related to what name you may actually register. First, the name of the LLC must contain “company,” “limited,” “limited liability company” or an abbreviation of any one of those terms. This is commonly included at the end, such as “Business Name LLC” or “Business Name, LTD.”

Additionally, the name of your LLC in Pennsylvania may not include or contain any words that directly relate to a business corporation such as “corporation” or “incorporated” or words that may imply the same.

Step 2. Designate a Registered Office or CROP

Pennsylvania law requires entities to provide an official mailing address or registered office in Pennsylvania capable of accepting service of lawsuits and other legal documents on the LLC’s behalf. Be sure it’s a physical address as P.O. boxes are prohibited. If an address in Pennsylvania isn’t available, you can enter into an agreement with a Commercial Registered Office Provider, or CROP, who will provide one on your behalf.

It’s essential to enter into a contractual agreement with a CROP before listing them as failure to do so can result in civil and criminal penalties. The state offers an extensive list of CROPs.

Step 3. File Your LLC Paperwork

Move forward with setting up your LLC by submitting a Certificate of Organization form and docketing statement to the Pennsylvania Department of State’s Bureau of Corporations and Charitable Organizations. You can complete and file the form online or submit it by mail. The fee is $125, though veterans can apply for a small business exemption fee waiver.

If you established your LLC elsewhere, but you also intend to operate in PA, you must file as a foreign association. Foreign entities are to complete a Foreign Registration Statement, which costs $250 to file.

Pennsylvania does allow for LLC domestication. That’s when you choose to change an existing LLC’s home state. Domestication means your LLC will be considered a domestic LLC in the new state, governed by that state’s LLC laws. Your business will now be a foreign LLC in the state where it was initially formed. This process costs $70 and requires the submission of a Statement of Domestication form. Check with the state you are leaving or entering for additional rules and filing requirements.


Key Tasks After Forming Your LLC

Once you successfully set up a Pennsylvania LLC, a couple of additional steps should be taken: obtaining an EIN through the IRS and creating an operating agreement.

Obtain an Employer Identification Number (EIN)

If your LLC has more than one member or has employees, obtaining an EIN is a requirement. EINs are nine-digit numbers that can be thought of as a sort of Social Security number for your business. You can get an EIN online through the IRS’s official website.

Create an Operating Agreement

Operating agreements aren’t a requirement for starting an LLC. That said, they’re a great way to establish a clear structure for your business.

The operating agreement document:

  • Outlines the LLC’s financial and functional groundwork
  • Governs internal operations and lays out designated responsibilities
  • Details methods for meeting the needs of the business owners, including the way profits are split and procedures related to new and departing members

An operating agreement helps to show a separation between members and the company. Therefore, it’s a crucial step for providing liability coverage for members or owners.

For LLCs with multiple members, a written agreement can prevent confusion or disagreements concerning policies or roles. With an operating agreement, everyone understands what’s required, how financial obligations work, how responsibilities are divided and how decisions are made.

Think of your LLC’s operating agreement as a professional foundation, providing guidelines for your business entity’s future.

Separate Personal and Business Assets

Once you set up an LLC, you should separate your personal and business assets. First, get an EIN and then open a business bank account. Use the business account only for business transactions. If you mix business and personal funds, your personal assets such as your home or residential properties you own, car(s), stocks and other items in your possession might be at risk in the event of a lawsuit arising in operation of your business. An LLC, if run correctly, can shield you from this concern.

Remember, for single-member LLCs, your business finances must be kept separate from your personal ones, even though you’ll report business income and expenses solely on Schedule C of your personal income tax return (unless you’ve opted to be taxed as a corporation). Maintaining separate books, bank accounts and credit cards strengthens any argument that your business’s finances are separate from your personal ones.

File Your Decennial Report

While most states require LLCs to file a report every year, Pennsylvania only requires annual reporting for restricted and benefit LLCs. Restricted LLCs must file an Annual Registration Statement, while benefit LLCs file an Annual Benefit Report.

All LLCs must file a Decennial Report every 10 years. This “decennial” report is submitted on years ending with the numeral “1” (such as 2011 or 2021), and its purpose is to update the state on any changes to business names or marks, legal agents, owners, members, addresses and other registration details. You only have to file a decennial report if you haven’t made a new or amended business filing within the past 10 years.

The report costs $70 to file, and must be mailed to:
PA Department of State
PO Box 8722
Harrisburg, PA 17105-8722

The filing period lasts the whole year so the decennial report can be filed anytime between January 1 and December 31. As of the time of this article’s writing, the next decennial report is not due until between Jan. 1, 2031, and Dec. 31, 2031.

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How Much Does an LLC in Pennsylvania Cost?

The Commonwealth makes registering an LLC in Pennsylvania an easy and affordable process. The only fee to register an LLC in Pennsylvania is $125 at initial registration. Then, every 10 years your business will be required to submit a decennial report with a registration fee of $70.

If you are not yet ready to file your LLC, Pennsylvania offers a name reservation option. You can hold a business name for up to 120 days for $70. To do so, submit a Name Reservation form. While these are the main costs with starting an LLC in Pennsylvania, keep in mind that there may be a number of other costs beyond what you have to pay to the Commonwealth’s government. Common costs include paying for legal help to prepare your certificate of organization and operating agreement and hiring a registered agent to represent your business. For a full guide to LLC formation costs, check out our in-depth article on How Much Does It Cost To Start An LLC.


Pennsylvania LLC Tax Requirements

By default, single-member LLCs are considered “disregarded entities” and multi-member LLCs are considered partnerships for tax purposes. Either way, the LLC’s income and expenses are not taxed at the LLC level. They pass through to the members’ personal tax returns, and the members pay personal income tax on profits. Members are typically considered self-employed, so each member’s share of profits is also subject to self-employment taxes.

Some LLCs are eligible to elect to be taxed as an S-corporation, another type of pass-through tax structure. This sometimes saves the members money on self-employment taxes and gives them more options for saving for retirement. Setting up a consultation with a tax professional is a key first step in understanding tax obligations and deductions and how your tax filing status might impact your overall tax burden.

Pennsylvania does not impose a franchise tax on LLCs. If your LLC has employees, you’ll need to pay payroll taxes, and if you sell taxable items, you’ll need to collect and remit sales tax to the state.


Do It Yourself or Hire Professionals?

With dedicated research and budgeting, you can set up an LLC on your own. Still, it’s common to hire a qualified business to do this for you. There is an added cost, but these professionals can drastically streamline the process for you.

Working with professionals may offer additional cover. For instance, establishing a relationship with a law firm may be of use later on with a legal issue. If you’re especially new, working with an LLC business might be a good option, as professional LLC services can guide you and answer any questions you have about the process for an affordable price.

If you decide to rely on the pros, we recommend using one of the companies we included in our best LLC services ranking.


Pennsylvania Business Formation Resources


Frequently Asked Questions

What are the different types of LLCs to set up?

When determining how to start an LLC, there are several types of LLCs to choose from. Knowing the LLC structures available is essential for selecting a business model that most closely aligns with the nature of your company and how you intend for it to operate. These LLC structures include:

  • Single-member LLC: This LLC is owned and operated by a single person. While similar to a sole proprietorship, this LLC provides additional tax benefits and liability shielding.
  • Multimember LLC: Standard LLCs with more than one member, often divided into manager-managed or member-managed entities.
  • L3C: These entities, also known as “low-profit liability companies,” act as a bridge between nonprofit LLCs and for-profit LLCs where the business cause remains the primary focus rather than earnings.
  • Series LLC: Series LLCs are tiered business structures where the topmost LLC owns a series of lower-tiered LLCs through limitless segregation. Each LLC in the series operates mostly independently of one another; their assets are also primarily separated.
  • PLLC: A specialized LLC, this business formation type is only available to certain licensed professionals.
  • Restricted LLC: Restricted LLCs are not taxed during the first 10 years of formation. Likewise, they cannot make distributions to members. It must be stated in the articles of organization that the LLC will be restricted.

What’s the difference between an LLC and a DBA?

An LLC is a business entity that has an identity separate from its owners. When you set up an LLC, you gain protection from personal liability for business obligations and you may have additional options for the way your business income will be taxed. A DBA, or “doing business as,” registration does not offer any liability protection or change your legal or tax status. A DBA simply establishes an alias or nickname for your business. Sole proprietorships, partnerships, LLCs and corporations can all have one or more DBAs.

How much does it cost to set up an LLC in Pennsylvania?

The fee to register an LLC in Pennsylvania is $125. Not yet ready to file an LLC, but already have a name in mind? Submit a Name Reservation form. It will hold the identity for a period of 120 days at the cost of $70.

Can I register an LLC in a different state?

Pennsylvanians can form LLCs in other states. However, if you will also be doing business in Pennsylvania, you’ll need to register as a foreign entity in Pennsylvania and designate a registered agent in the Commonwealth. It’s vital to research the relevant requirements before setting up your LLC outside of PA.

Do LLCs in Pennsylvania require ads?

No advertising is required when setting up a domestic Pennsylvania LLC.

How do I change ownership of an LLC in Pennsylvania?

It is recommended you include language on how to transfer ownership when creating your LLC operating agreement. A partial transfer is sometimes called a “buyout” and involves other LLC members buying back a previous owner’s interest. A full transfer means selling your entire business. For more on LLC ownership transfers, check out our article on How To Transfer LLC Ownership.

Is there an annual fee for LLCs in Pennsylvania?

There is no annual fee for LLCs in Pennsylvania unless you operate a restricted professional LLC or benefit LLC. There is a fee to file your decennial report every 10 years, which costs $70.

How do I dissolve an LLC in Pennsylvania?

You can dissolve an LLC in Pennsylvania by completing the Certificate of Dissolution, Domestic Limited Liability Company and sending the form to the Department of State by mail or online. You’ll need to pay a termination fee of $70. You will also need a Tax Clearance Certificate from the Department of Revenue before your dissolution is finalized. For more info on dissolving an LLC, check out our article on How To Dissolve an LLC.

How do I remove a member from a Pennsylvania LLC?

Look to your operating agreement for the procedure for removing a member from an LLC in Pennsylvania. There may be restrictions on who can buy the member’s financial stake in the company. You will need to vote to amend your operating agreement to reflect the change in ownership. If there’s no operating agreement, a member’s departure is governed by state law.

Can I use a foreign LLC to do business in Pennsylvania?

You will need to follow Pennsylvania’s rules for the registration of foreign businesses, which requires businesses to file a Foreign Registration Statement with the Department of State. A foreign LLC will need to register if it has a storefront, office, warehouse or a sales representative operating in the state. The rules are more complicated if you conduct internet sales in the state. For more info, head to the Pennsylvania Department of State website.