How to start your LLC in Pittsburgh, PA

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:

• Company
• Limited
• Limited Liability Company

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, “Pittsburgh Computing LLC” could operate under “Pittsburgh Network Specialists.”

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:

• It’s cheap: Avoid the extra expense of hiring someone else to serve you.
• It’s simple: You have to update only one address.
• It’s reliable: Important documents come to you.

There are also many disadvantages to appointing yourself, including:

• No privacy: The Department of State publishes the address online. It is public information.
• Junk mail/spam: The address will likely receive junk mail. You’ll have to identify the important documents from the piles of advertisements.
• No breaks: Registered agents don’t get time off. They need to be available during business hours.
• Business interruptions: You could get served with a lawsuit in front of customers. This can damage your reputation and hurt opportunities.
• It’s your fault if you miss something: If you make a mistake or miss a vital document, there is no one to blame but yourself.

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:

• The LLC’s name;
• Registered office contact information; and
• The names of people forming the LLC.

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:

• One-hour service: $1,000 fee and the office must receive it before 4:00 p.m.
• Three-hour service: $300 fee and the office must receive it before 2:00 p.m.
• Same-day service: $100 fee and the office must receive it before 10:00 a.m.

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:

• They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
• They say whether the LLC has a member or non-member manager and what the manager has the right to do. Managers also have special duties to the company and its members. The operating agreement should state these.
• They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
• They say how new members can join the company. They also have rules about how exiting members can leave.
• They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
• They say whether members or managers are in charge. They also say how to hire and fire managers.
• They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
• They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

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:

• If the LLC has more than one member;
• The LLC hires any employees; or
• It follows C-corporation or S-corporation taxation.

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