How to name a Pennsylvania LLC? It’s time to get creative because the first step to forming an LLC is selecting the right name. Advertising strategies play a primary role. But there are certain legal guidelines to follow as well.
Title 15, section 204 has guidelines for LLC names. It must contain one of the following words or an abbreviated version:
On top of that, section 202 provides some restrictions for Pennsylvania LLC names. There are two key components to this section.
First, your LLC name must be unique and distinguishable from other businesses. To verify this, search the Business Records provided by the State. Avoid names identical to other businesses, as well as closely related ones.
Second, there are many terms to avoid using unless you have the authorization to do so. These include highly-regulated industries such as financial, legal, and medical services. You also don’t want to use words indicating you are part of a government organization.
Having a difficult time generating an LLC name? Pennsylvania law allows businesses to use doing-business-as or DBA names. For example, “Philadelphia Tours LLC” could operate under “Philadelphia’s Premier Tour Network.”
It’s also worth reviewing the available domain names (URLs). Even if you aren’t interested in creating a website, getting the rights to matching domain names is a wise step.
How do you appoint a registered agent? All Pennsylvania LLCs must have a registered office under Title 15, section 8825. Many states call this a registered agent.
The registered office is the contact information used for important documents. These include things like tax and legal communications. A key role is receiving legal service of process. This means if your LLC gets sued, the legal paperwork goes to the registered agent.
You can name yourself as the registered agent. Many business owners choose to hire a registered agent service instead.
There are some benefits to appointing yourself, such as:
There are also many disadvantages to appointing yourself, including:
Hiring a registered agent service can help reduce the potential for these harms. It also keeps your address confidential. They’re generally quite affordable, costing around $100-$150 per year. If you hire an attorney to perform this role, they can charge up to $500 per year.
If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.
How to file the Pennsylvania Certificate of Formation? Naming your LLC and deciding on the registered agent are big steps in the right direction. But filing the Certificate of Formation is the most exciting part of the process.
Filing the Certificate of Formation transforms your idea into a legal company. Title 15, section 8821 lists the legal requirements.
Filing this essential document can be intimidating. Some people think attorneys must handle it. In reality, the Certificate of Formation only requires basic information. Most people are capable of tackling this on their own.
Pennsylvania provides an excellent fillable form to simplify the process. It includes these components:
Be prepared to pay a $125 filing fee. You’ll also need to wait for the State to approve your application before the LLC exists. Pennsylvania recommends you allow 15 days as processing time.
You can pay for expedited services, which you must submit in person. The options are as follows:
You’ll also need to file the docketing statement for new entities. This short form lists primary contacts, business activities, and tax-related information.
To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.
Do I need an operating agreement for a Pennsylvania LLC? An operating agreement is not required under Pennsylvania State law. But it’s an excellent idea to create and execute one anyway.
An operating agreement is a contract between LLC members. It sets out the rules under which the LLC operates. These include the rights and responsibilities of the members.
Additionally, the operating agreement can cover any situation the LLC might encounter. It can lay out the duties of members and managers. It also provides methods for adding or removing members.
Owners customize operating agreements to meet their needs, such as:
Protect yourself and your business by executing an operating agreement. This private contract can help to avoid many pitfalls down the road. LLC formation services provide operating agreement templates for as little as $50. The price is well worth it.
Do I need an EIN? The IRS uses Employer Identification Numbers (EINs) to track tax information. They are like Social Security Numbers for businesses.
The IRS requires certain businesses to get an EIN. These include any of the following:
Even if you don’t fall under one of these qualifications, getting an EIN is beneficial. For example, some states require having one for state tax purposes, and banks often require them to open a business bank account for your LLC.
The IRS has made the process easy through its online EIN application. It only takes about five minutes to complete and is entirely free of charge. It’s not worth hiring someone to do this unless it’s part of a wider LLC formation package.
Read More: How to get an Employer Identification Number in Pennsylvania
The state and city-level authorities issue many business licenses and permits. It is paramount that you get what your business needs before starting operations. Neglecting this step can cause grave consequences.
Pennsylvania does not offer a general business license. But specific business activities need to get professional licenses. Review the State’s guidelines to see if any apply to your business.
Once you’ve met the State’s needs, it’s time to turn your attention to the local authorities. The City of Philadelphia issues a variety of licenses and permits.
Getting a City Tax account number is the first step in the process. Once you have that, you can apply for a Commercial Activity License. This is a general business license that every commercial operation needs.
The City of Philadelphia also offers licenses and permits. These apply to specific activities, such as:
To get extra help navigating this process, reach out to the City officials for help. You must get what your business needs before launching.
Seasoned business leaders understand the value of connecting with others. Follow their footsteps by reaching out to the local community for support. Experienced entrepreneurs are eager to help you uncover the path to rapid success.
Here is a list of local organizations dedicated to helping businesses thrive:
Reaching this point means you have formed your Philadelphia LLC. Relish the moment, but don’t let the momentum fade. These extra steps are worth taking care of immediately.
Domain names (URLs) are now an integral part of many businesses. Even if you don’t want a website immediately, it’s worth getting the rights to domain names.
If you don’t buy the name, domain squatters could beat you to the punch. They buy them to resell the URLs at a markup, forcing you to spend more cash when the time comes to start a website.
Most domain names are affordable, costing about $20-$50 per year. The process is straightforward, and you can get it done in minutes. Take note of seasoned business owners and get the rights to matching domain names.
Some businesses choose an LLC name that doesn’t match what is on the front of their shop. Instead, they operate under a doing-business-as (DBA) name that provides flexibility. Pennsylvania calls these fictitious business names.
You can find the applicable laws under Title 54, Chapter 3. By providing basic information, you can operate under names different from the LLC. For example, “Philadelphia Textiles LLC” could use “Philadelphia Skirts and Shirts.”
To use one for a Philadelphia LLC, follow the Department of State guidelines. A $70 fee applies. You’ll also need to have the fictitious name published in the local county.
Launching a new LLC is a monumental action serving as the foundation of your business. But to stay in compliance with rules and regulations, there are a few other items worth attending to.
Unlike other states, most Pennsylvania LLCs do not need to file annual reports. Instead, you’ll only have to complete a decennial filing every ten years, on the years that end with a one. Certain professional LLCs do need an annual certificate of registration.
A franchise tax applies to most Pennsylvania LLCs. And if you hire employees, you’ll need to get workers’ comp insurance. You might also consider getting other insurance coverage. These include general liability or commercial property policies.
Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.
It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.
It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.
The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.
If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.
The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.
It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.
You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.
Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.
No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.