Pennsylvania law requires anyone looking for personal protection from a business lawsuit register as an LLC. A Limited Liability Company, this is a way for people to protect their personal assets if the business incurs a legal debt. It’s most similar to a sole proprietorship, but it offers business owners the same protection as a corporation. Many small business owners in Pennsylvania make the decision to register their business as an LLC because it’s not a difficult process. There are a few challenges along the way, but it’s nothing you and your business can’t overcome when you take into consideration what the law means for you as an LLC. All the paperwork you need to file your LLC registration online is available at the Pennsylvania Department of State Website.
Naming an LLC
Many consider this the most difficult part of the process. It might seem like it’s just a name, but Pennsylvania law requires no two LLCs operate with the same name, and all must have the “LLC” added to the end of the name. The Department of State website provides a database for all business names already registered. It poses a problem when the name you want to use or have been using in business for a long time is already registered. If you have to change your already established business name, it’s a turn-off for many business owners.
Once you find your name is not already registered or you choose a new one, you have to pay a small fee to reserve the name throughout the process of file. This is something you can do online with the Department of State, and it holds your name for 120 days for a fee of $70.
Registered Agent and Certificate of Organization
A registered agent is a requirement for any Pennsylvania LLC. It’s a person who is going to stand for your company if you are ever in any legal trouble. This is usually an attorney or a law firm, but that’s not a requirement per Pennsylvania law. Any person or business living in Pennsylvania is acceptable. Once you have a registered agent, you have to file your certificate of organization. This form is located on the DOS website, and it requires the inclusion of specific information.
- Name of LLC
- Address of LLC
- Name of registered agent
- Address of registered agent
- Whether LLC is manager or member managed
- Name and address of all organizers of LLC
- Whether the LLC provides professional services
You also need to send a New Entity Docketing Statement with this form, and it has to include the same information, as well as the person responsible for the LLC’s taxes. It must include an EIN if you need one, and it must include the effective date, purpose, and fiscal year end o the corporation. Both forms are located online, and you can file them online or through the mail with a fee of $125.
Tax and Business Law
We mentioned an EIN earlier, which is found by visiting the IRS website and quickly filing for one. You need only do this if your business has more than one member. You will need to find out what the business licensing law is for your type of business in your county, and you must apply for those licenses. If you sell goods and collect sales tax, it’s time to register your LLC with the Pennsylvania Department of Revenue. You’ll become responsible for filing an annual report and paying an annual fee beginning your first full year of registration. The fee is high in Pennsylvania. It’s $520 multiplied by the number of members you have in the LLC. You will file this every year no later than April 15 to avoid penalties and late fees.
Filing paperwork to become a registered LLC in Pennsylvania is not a difficult task, but you might find it’s stressful when you don’t follow instructions precisely. The naming is a challenge if your name is already registered by another business, but the challenges tend to minimize themselves significantly from that point forward. It’s protection for your personal finances, and that’s worth consideration.