Pennsylvania Department of State does not require an annual report for profit corporations. LLCs have an annual fee of $380 times the number of persons who were members of the company on December 31 shall accompany the form and shall be made payable to the Department of State. The base fee of $380 was increased on December 31, 2003. See § 8998(b)(2). Nonpayment of the annual fee will create a lien on the assets of the company.

Note: The annual fee is required to be paid only with respect to a member who:

(1) was licensed to practice the professional service rendered by the company; and

(2) had principal residence in Pennsylvania. See § 8998(b)(1).

If you need help we can file annual report for you. Please contact us.

Business Information & Rankings

• Pennsylvania ranks 6th among states in new and expanded business facilities, and 4th in new manufacturing operations. (Site Selection Magazine, 2006).
• Pennsylvania ranked 16th nationally for its Business Tax Climate. (Tax Foundation, 2005)
• Of the 31 States with nuclear capacity, Pennsylvania ranks 2nd. (Energy Information Administration).

Cost of living

Crime Rate

Pennsylvania has the 10th lowest overall crime ranking in the U.S. (FBI, 2004)

Fees & Taxes

Business Inventory Tax
Exempt.

Corporate Income Tax
Pennsylvania’s corporate tax structure consists of a flat rate of 9.99% on all corporate income.

Personal Income Tax
Pennsylvania has a flat tax rate of 3.07% on individual income tax, with no personal exemptions.

Personal Property Tax
Pennsylvania does not levy or collect taxes on real estate or personal property. Municipalities (cities, townships, and boroughs) are permitted to levy real estate property taxes that cannot exceed 30 mills on the assessed value of the property. Counties may also levy an intangible personal property tax, which taxes stocks, bonds and other personal property taxpayers may own. Not all Pennsylvania counties levy this tax.

State Sales and Use Tax
Base Rate: 6.0%
Machinery Rate: none

There is an exemption for sales of property, rendition of services, or use of property, including but not limited to machinery equipment, parts or supplies to be consumed directly in manufacturing personal property.

Unemployment Insurance
Pennsylvania’s new employers’ rate is 3.752 percent for 3 years.

The gross state product (GSP) of the “Keystone State” is $719.8 billion and hence is ranked 6th in the nation. This is definitely not the only reason why people incorporate in Pennsylvania. Pittsburgh, situated in southwest Pennsylvania is home to 8 Fortune 500 companies and in total, the state is home to almost 50 Fortune 500 companies including GE Transportation Systems, AmerisourceBergen, Tite Aid, Comcast, Kraft Heinz, PPG Industries, Aramark, and Hershey among others. What makes the Keystone state tick? An excellent business climate is one of the clearly defining factors.

Pennsylvania is home to approximately 1 million small businesses. Benefit from the state economy and incentives today!

Why Choose Pennsylvania for Incorporation?

In 2015, Pennsylvania small businesses employed approximately 2.4 million people and this rose to 2.5 million by 2017. The Keystone State is listed in Forbes #30 Best States for Business and is ranked #25 in Forbes list of states with pro-business economic climate. These are some of the reasons why company incorporation in Pennsylvania especially of small and medium sized enterprises has reaped several benefits.

Now let’s take a look at some of the salient benefits that are responsible for fuelling growth of small businesses:

• Keystone Opportunity Zones (KOZ) and Keystone Opportunity Expansion Zones (KOEZ): This is a business incentive program that will benefit those who set up companies in Pennsylvania. The primary aim of the KOZ/KOEZ program is to revive economically distressed rural and urban communities by offering businesses with market-based incentives that aid in eliminating taxes. The program is overseen by the PA Department of Community and Economic Development (DCED). Application Form
• Financial and Loan Programs: There are several financial and loans programs that you can benefit from post company incorporation in Pennsylvania. These financial incentives are made available by the Pennsylvania Department of Community and Economic Development (DCED). The most popular programs for businesses are:
  – Alternative and Clean Energy Program (ACE)
  – Entertainment Economic Enhancement Program (EEEP)
  – Keystone Innovation Zone (KIZ) Tax Credit Program
  – Job Creation Tax Credits (JCTC) Program: Check Guidelines
  – High Performance Building Program (HPB)
  – Innovate in PA Venture Investment Program (VIP)
  – Pennsylvania First (PA First)

How do you incorporate in Pennsylvania?

What is the process of incorporation in Pennsylvania? What type of documentation is required? These are some of the common questions that you will be confronted with if you are planning to start a new business in the state. The following steps will enable understanding of the entire process:

Business Type

The first step towards incorporation in Pennsylvania is choosing the type of business you want to form. You can choose to form an LLC or a Corporation. The type of business entity you want to form can be either domestic or foreign. The forms and fees will be different for each type of entity.

Business Entity Name

One of the most important steps towards incorporation in Pennsylvania is naming your business entity. You have to start by identifying, searching, reserving, or registering the business entity name. There are 3 steps towards business name formation and they are:

1. Naming Requirements: A corporation under 2010 Pennsylvania Code, Title 15, § 1305 and an LLC under 15 PA Cons Stat § 8814 (2016) should contain words like “corporation”, “incorporated”, “limited liability company” or abbreviations like “corp.”, “inc.”, “ltd.”, “L.L.C.” or similar abbreviation.
2. Business name search: You need to search for a business name that is not currently in use. You can conduct name search here.
3. Name Reservation: Once you have identified a business entity name which is available, you can reserve the name by submitting DSCB:15-208 for Reservation of the Business Entity Name. The form for reservation of name has to be submitted to the Office of the Secretary of State and should be compliant with the requirements of the provisions of 15 Pa.C.S. § 208. It will be effective for a period of 120 days.
4. A foreign business entity will have to register their business name using Form DSCB:54-311.

Choose a Registered Agent

Whether you form a corporation or an LLC business entity, in order to transact business in the state of Pennsylvania, you will have to maintain a registered agent pursuant to 15 PA Cons Stat § 8825 (2016) for LLC and 2010 Pennsylvania Code, Title 15, § 1507 for Business Corporations.

We are one of the respected registered agents in Pennsylvania and will be responsible for initiating incorporation in Pennsylvania through processing of your “Certificate of Formation”, and “Articles of Incorporation” for domestic entities and “Application for Registration” for foreign business entities.

Articles of Incorporation and Certificate of Authority

You will be required to submit “Articles of Incorporation” if your business is a domestic corporation and a “Certificate of Authority” if it is a foreign business entity. In order to streamline the process of incorporation in Pennsylvania, we can file and documents on your behalf through the online process or through expedited process.

Date Stamped Copies

As part of the process of company incorporation in Pennsylvania, we will ensure, you receive date-stamped and filed copies that verifies that the state has filed as well as formed your corporation.

Costs and Fees associated with Pennsylvania Incorporation

What would it cost to set up company in Pennsylvania? Check Fees here!

Order LLC now  Order INC now

It is beneficial for a start-up company in Pennsylvania to be registered in this state as the “Quaker State” is considered by many to be a historically innovative one. There is an exhaustive list of “first achievements” starting with the first professional baseball stadium in 1909 and off late, Hershey has made it the chocolate capital of the United States. There are several industries that have been thriving since the early 19th century and today the industrial economy is diverse although one of the largest and the fastest growing industry is surprisingly “Food Products and Other Organic Produce”. There has been a resurgence of the natural gas industry, and steel manufacturing has an $87 billion economic impact.

Business Growth Incentive for New Businesses

Should you register a new company in Pennsylvania? Yes! The state that contributed to the building of landmark structures in the U.S including the Empire State Building, the Golden Gate Bridge, and the Hoover Dam is home to a skilled workforce that is geared towards making businesses successful. Of course, there are a variety of benefits for businesses as well as advantages that are highly business specific. Let’s take a look at some of them.

Advantage#1: The benefits of Incorporation or LLC formation

Corporation

• Tax Credits: If you register a new business in Pennsylvania as a business corporation then you can take advantage of several tax credit programs initiated by Pennsylvania Department of Revenue and Department of Community and Economic Development. Some of the most popular tax credit programs include:

1. Research and Development Tax Credit Program
2. Malt Beverage Tax Credit Program
3. Mobile Telecommunications Broadband Investment Tax Credit
4. Mixed-Use Development Tax Credit Program
5. Resource Enhancement and Protection (REAP) Tax Credit
6. Keystone Innovation Zone (KIZ) Tax Credit
7. Tax Credit Program for New Jobs
8. Entertainment Economic Enhancement Program
9. Entertainment Production Tax Credit
10. Coal Refuse Energy and Reclamation Tax Credit
11. Research and Development Tax Credits

• Limited Liability: The shareholders of a business corporation will always have limited liability when it comes to the debts or judgments if any against the corporation.
• No Income Tax: If you register a new business in Pennsylvania as an S Corporation, you can benefit from the fact that there are no income taxes to be paid and an S corporation loss or income will be passed through to the stockholders. It is also important to know that there are a few exceptions.

LLC

• Flexible Profit Distribution: A start-up company in Pennsylvania LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
• Loan and Grant Programs: For a start-up company in Pennsylvania, entrepreneurs, and small businesses require financial assistance in order to bring their new ideas, and technology to the forefront and this is where the state plays a key role. There are several programs in place that are aimed at providing the much needed financial assistance to businesses. Some of these popular programs include:

1. Alternative and Clean Energy Program (ACE)
2. Ben Franklin Technology Development Authority Venture Investment Program (VIP)
3. Business in Our Sites Grants/Loans (BOS)
4. Business Opportunities Fund (BOF)
5. High Performance Building Program (HPB)
6. Industrial Sites Reuse Program (ISRP)
7. Innovate in PA Venture Investment Program
8. Neighborhood Stabilization Program (NSP)
9. Pennsylvania First Program (PA First)

• Limited Liability: As an owner of a Pennsylvania LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.

Advantage#2: Pennsylvania Business Incentives

Once you register a new company in Pennsylvania, there are several business incentives and programs that your company can benefit from. Let’s take a look at some of the most popular programs:

• Pennsylvania Opportunity Zones: The governor has designated 300 tracts based on economic data to be categorized as an opportunity zone for businesses. The program initiated by Department of Community and Economic Development (DCED) and business situated in these zones can enjoy several benefits like deferral of gain invested in an opportunity zone property. The primary objective of this program is to enable a spur in economic development as well as job creation especially in distressed communities. As an investor or if you register a new company in Pennsylvania in an opportunity zone, you will be able to defer tax on any prior gains that was invested in a Qualified Opportunity Fund (QOF) like if you have held a QOF investment for more than 5 years, then you can benefit from a 10% exclusion of the deferred gain. Interactive map of Pennsylvania Opportunity Zones
• Job Creation Tax Credit program (JCTC): The primary aim of the JCTC program is to secure job-creating economic development opportunities through new business development or through the expansion of existing businesses. You will be eligible for this program after you register a new business in Pennsylvania and if your business is able to create 25 or more jobs within 3 years of existence or if the business helps in increasing employment by 20%. As a part of the program, you will be able to claim a maximum tax credit of $1,000. More Information

Are there any Disadvantages of Incorporating in Pennsylvania?

As a startup company Pennsylvania, you will be able to enjoy several benefits in the form of tax credits, grants, loans, Special Development Zone and Opportunity zone programs, assistance in Infrastructure and Facilities Improvement, and much more. So, the big question is – are there any disadvantages? In reality, there are no disadvantages as such except the ones that are specific to the type of business you register like an LLC has a limited life and can get dissolved if a member dies. Similarly, incorporation can lead to higher overall taxes and this is where you can find relief in the form of the tax credit programs.

Order LLC now  Order INC now

One of the important aspects of doing business in Pennsylvania is ensuring that you obtain a proper license or permit to transact business in the state. At the same time, it is important to understand that all businesses in the state don’t require a Pennsylvania company license. There are some businesses that may even require:

• One or more licenses
• A business permit
• A license and a permit

These business permits and licenses are regulatory and cover matters like sales tax, health and safety, and the environment. How do you obtain the licenses or permits?

There are different types of regulatory permits and licenses applicable and are issued by different state agencies. In the state of Pennsylvania, you can apply for most permits or for a particular business license by filing Form PA-100, also known as the Pennsylvania Enterprise Registration form. This form is primarily for registration of new businesses or start-ups in the state but it also contains a section (Section 18 – Sales Use and Hotel Occupancy Tax License, Public Transportation Assistance Tax License, Vehicle Rental Tax, Transient Vendor Certificate, Promoter License, or Wholesaler Certificate) on business licenses. You can file the form online or submit it through mail with the Pennsylvania Department of Revenue.

Step-by-Step Guide to a Business License in Pennsylvania

Here is a step-by-step approach towards acquiring a business license in the state of Pennsylvania:

Step#1: The Industry or Business Type

How would you know what type of business or professional license is required to operate in Pennsylvania? The type of industry or the activities of a business entity helps in identifying the type of business license required.

The form PA-100 is for specific business types and helps in issuing of licenses for Transient Vendor, Promoter License, Cigarette Dealer’s License, Cigarette Wholesaler, Cigarette Stamping Agent, and Small Games of Chance License.

If you have a business that doesn’t fall in the above category then how do you obtain your business license in Pennsylvania?

It can be obtained from various state agencies directly depending on the type of business you have. Let’s take a look at some examples to understand this better:

Retail Food Facilities & Restaurants

The business license issued under this category includes Restaurants, Clubs, Bars, Grocery Stores, Food Auctions, Beer Distributors, Convenient Store, Caterers, Schools, and any public food facility where food is served or sold directly to a consumer.

A business entity falling in the above category is required to obtain a Retail Food Facility License prior to beginning operations of the Retail Food Facility.

• Issued by: Pennsylvania Department of Agriculture
• Apply: You have to download and submit Application Packet – Retail Food Facilities and Restaurants with the appropriate Regional Office via mail or fax
• Processing time: 4-6 weeks
• Fees: Fees for a ‘New’ retail food facility is $241. The annual renewal fee is $82. The inspection fee can vary from $150 to $600 depending on the number of inspections.
• Renewal of Business License: You can renew your license annually and the due date is approximately 45 days prior to your current expiration date.

APPLICATION PACKET

Liquor Licensing

• License Issued by: Pennsylvania Liquor Control Board

Pennsylvania Liquor Control Board (PLCB) issues a business license in Pennsylvania for serving wine and liquor. The different license types include:

• Restaurant (R)
• Eating Place (E)
• Hotel (H)
• Distributor (D) & Importing Distributor (ID)

The fee is dependent of the type of business activity like:

• License fee for a Brewery is $700 (Application Fee) + $30 (Filing Fee).
• The expiration date of the business license is December 31 and the renewal fee is $1,425.00 (Prorated Quarterly)

Schedule of Wholesale License Fees

Step#2: Licenses issued by City/County

If your business or industry type doesn’t fall under a statewide license then you will have to check with the local city or county office. A Pennsylvania company license can also be issued by local counties or cities in which the business entity is located. Let’s look at an example to understand how this works.

If you are planning to transact your business in the City of Philadelphia, PA then you will require a business license for specific types of services or activities. Firstly, you will need to apply for an activity license. There are three types of activity licenses issued in Philadelphia and they are:

• Commercial Business Entity
• Non-Profit Business Entity
• 2-4 Unit Owner-Occupied Housing

You have to apply to Department of Licenses and Inspections, License Issuance Unit – PSC for the issuance of the business license.

APPLY ONLINE

Step#3: Issuance of a Business License

How is a business license in Pennsylvania issued? You have to identify the following to complete the process:

1. The type of business or industry
2. Do you need a license or a permit?
3. Will it be issued by the state or the city or county?

Once you have identified the above, all you need to do is either download the application online or contact the concerned state department or city of clerk office.

It is important to note that a business license or permit will have to be renewed annually unless specific dates have been mentioned, to keep the business operational.

Order LLC now  Order INC now