Business License in Pennsylvania

All states in the USA have business laws and regulations governing new business formations and operations. The Consolidated Statutes of the state of Pennsylvania require all domestic or foreign entities formed in the state to obtain a Pennsylvania business license. The importance of these licenses or permits lies in the fact that no business will be allowed to transact in this state without them. In fact, if a company conducts business without proper licenses, then they may be penalized. Different types of licenses may apply to your company, so conducting a proper Pennsylvania business license search is often recommended.

Who needs a Pennsylvania business license?

Pennsylvania’s attraction for entrepreneurs is mainly due to its abundance of a skilled workforce, its strategic location, and its strong transportation infrastructure. You can easily start a business from home, form a limited liability company, or any other entity in this state. One of the main details to initially focus on is conducting a Pennsylvania business license search. In Pennsylvania, a business license or permit is required by every business entity type irrespective of the entity size or structure. Even if you’re just planning to start a small business out of your garage, you may need a license. The business license search will help you to identify the right permits based on the relevant type of business activity or industry.

What business license do I need in Pennsylvania?

If you’ve decided to start a business in Pennsylvania then one of the important state requirements is obtaining the proper business licenses. Not every new or existing company in the state requires a Pennsylvania business license. Nevertheless, certain businesses may even require multiple licenses or permits. The most important thing to do first is to determine the type of Pennsylvania business license and permits required for your company. You may require a professional or occupational permit, or your licensing requirements may depend on your business activity. Let’s look in detail at the various categories of licenses in this state.

Obtain Professional Licensing

Whatever kind of business you start in the state of Pennsylvania, it’s important to understand that certain business activities are considered to be a regulated profession by state law. Hence, you will be required to obtain a Pennsylvania business license according to the relevant profession. This type of license will be separate from other licenses and permits applicable in the state. You will need to conduct a profession-based Pennsylvania business license search to determine the right licenses and certifications. Let’s try and understand what a professional license is and the type of professions or occupations that require licensing in Pennsylvania.

What is a professional license in Pennsylvania?

Certain professions are regulated in the United States although licenses are applied for and obtained at the state level. The fields of professions regulated and licensed can vary depending on the state you plan to start your business in. The general meaning of a profession is that it is an activity where you may require some form of specialized training, skills, knowledge, and qualification. It may even imply a membership of any professional body as well as a certificate of practice like those for medical practitioners, or those required by educational institutions. If you as an individual render personalized services then you will be regarded as a professional and will need to obtain a professional Pennsylvania business license.

Which professions require licensing in PA?

There are hundreds of thousands of professions in the USA, but not all of them may require Pennsylvania business licenses and permits. The licensing authority is governed by the state and hence issued by a competent authority within the state’s jurisdiction. The professional Pennsylvania business license is like a permit that will authorize you to perform or provide a specific service legally in this state. The importance of professional licenses lies in the fact that they ensure that certain professional services are offered by competent people only.

• Engineers
• Cosmetology Experts
• Medical Practitioners including Physician and Surgeon
• Registered Nurses and other related nursing professionals
• Osteopathic Medicine
• Pharmacy or Pharmacist
• Real Estate brokers and salespersons
• Social Workers
• Barber (BL)

Other Pennsylvania Business Licenses

Another essential element to consider or focus on is the various sorts of licenses your business may require apart from a professional license. You may be required to conduct a Pennsylvania business license search to ascertain the exact permit requirements for your company. Let’s take a brief look at the other Pennsylvania business licenses and permits that may be relevant and necessary to obtain.

City or county for local licensing in PA

Once you’ve formed a business in Pennsylvania in a specific city or county, you will need to check, identify, and obtain the necessary local licenses. Each city or county has its own laws related to local licensing. The type of license, fee, and renewals will vary from one county to another. Let’s look at an example to understand how to obtain a local Pennsylvania business license and permit.

Building & Zoning Permits

One vital detail that most new businesses tend to overlook is the building and zoning permits. This is a very important factor as zoning laws help segregate residential areas from business areas. They also specify the districts or areas where a business can operate. Zoning regulations may vary from one city or county to another.

PA home-based licenses

Establishing your startup from your residence or home is a great idea as it will save on overhead and several other commencement and operational costs. Even so, it’s important to conduct a Pennsylvania business license search for home-based businesses. The regulations and license requirements may vary according to your business activity and the operational jurisdiction of the company.

Need any Assistance with Obtaining Your Pennsylvania Business License?

If you’re planning to start a new business in Pennsylvania, then it’s fundamentally necessary to obtain the right Pennsylvania business license and permits. The type of licenses and permits required will vary depending on the jurisdiction your company is based in and your business activity or industry. The application, fee, and laws for the Pennsylvania business license and permits are different for each type of license.

Pennsylvania Business Entity Search

Forming or incorporating a new business in Pennsylvania involves several processes. The foremost process amongst them is reserving or registering your business name. This process is divided into three categories, which include the following:

• Identifying a proper business name
• Conducting a Pennsylvania business name search
• Reservation of the name if it’s available

• Choose a name that’s memorable and easy to pronounce like “Jenny’s Bakery”
• Try to keep a business name that is consistent with your brand
• Your company name should convey a purpose like “Whits PC repairs”
• Business name generators are easy to find online and are constantly available for you to use
• When you choose a business name, keep in mind the possibilities of a future business expansion
• Try not to choose a name that is similar to a competitor’s
• Your chosen name should not in any way cause trademark infringement
• Ensure that your chosen name is web-friendly and that the domain name is easily available

What is a Pennsylvania business name search?

A business name is the most important feature of any new company, and a Pennsylvania business name search can assist with this process in a meaningful way. The Bureau of Corporations and Charitable Organizations provides an online searchable database that will help you conduct an availability search for any company name. This database also helps existing business owners and registered agents find specific records regarding particular businesses. Let’s look at an example to understand the concept and process of a Pennsylvania business name availability search.

Naming your Pennsylvania LLC

If you’ve decided to form a limited liability company in Pennsylvania, then it’s time to choose a strong company name. This will be regarded as the official and legal name of your LLC. This name will be mentioned in the certificate of organization, as well as on other important business-related documents. Hence, it’s important to ensure that the chosen name is compliant with the Pennsylvania business name rules and guidelines. You’ll also need to reserve your business name after conducting a Pennsylvania LLC name search. You can look for ideas online to help you choose a business name, or you can utilize the help of business name generators. Now, let’s look at the two focal points to consider when it comes to naming your limited liability company.

General Pennsylvania LLC naming rules

One of the most important areas to focus on when naming your limited-liability company is the Pennsylvania business name rules and guidelines. The name reservation and guidelines for an LLC are governed by the 2020 Pennsylvania Consolidated & Unconsolidated Statutes, Title 54 – NAMES, Chapter 5 – Corporate and Other Association Names. The general rules for an LLC name include:

• The name should have words like Limited Liability Company, or abbreviations like LLC or L.L.C.
• It may also contain a combination of words and abbreviations like “limited liability co.”, “ltd. liability company”, or “Ltd. liability co.”
• This name should be distinguishable from any other name in the Department of State database. This can be checked by conducting a Pennsylvania LLC name search.
• There are “Word Restrictions” that you will need to check before finalizing a name. The state prohibits the use of specific words like banking, trust, and realtor among others.

Pennsylvania LLC business search

Once you’ve successfully come up with a name for your LLC that complies with the Pennsylvania business name rules, the next step is to conduct an entity or name availability search. The website of the Pennsylvania Department of State offers an online option for conducting this search. The following options are available:

• Search by company name – This is the most commonly used method for the Pennsylvania LLC name search. This search can be used by both domestic and foreign entities. You can also use this search for DBA names or fictitious names. You can search for a company name that starts with a specific word or the whole name. You don’t have to search by using a designator like LLC as the database will reveal names of every entity type. Let’s look at an example to understand this process.

  Example: You want to start a bakery using the name “The Frosted Fox Cake Shop”. You can conduct the Pennsylvania business entity search by using the full name or a part of the name like “the cake shop”. The search options will reveal both specific names and all names that have the cake shop in it. The results will show that “The Frosted Fox Cake Shop” already exists. In such a scenario, if you tweak the name a little bit like “Frosted Cake Shop” then it doesn’t bring up any similar name. This shows the name as being available. Now you can simply use it in the Name Reservation form.

• Search by entity ID – This option is used by registered agents to check the status of an existing Pennsylvania LLC, as each company formed in the state has an associated filing number.

Do you want to form an LLC in Pennsylvania?

Naming your Pennsylvania Corporation

If you’ve made the decision to incorporate a new business in the state of Pennsylvania then the first step is to choose a name for your company. Once you have selected a name that complies with the naming rules and regulations, it is essential to conduct a Pennsylvania Corporation name search. This search helps by informing you of the status of a name i.e., whether your chosen name is available for reservation and use as a legal name or not. It’s important to note that you will have to reserve the business name before filing the Articles of Incorporation. Let’s look at the various elements to consider when naming your new company.

General Pennsylvania C & S Corporation naming rules

The Pennsylvania business name rules are different for different entity structures, although they are the same for C and S Corporations. It’s important to follow the state naming guidelines as this will minimize the risk of the chosen corporate name being rejected. The naming guidelines are governed by the 2020 Pennsylvania Consolidated & Unconsolidated Statutes, Title 54 – NAMES, Chapter 5 – Corporate and Other Association Names. The general rules for a corporate name include:

• Whether you form a C-Corporation or elect an S-Corporation status, the name should contain words like “corporation”, “incorporated”, “limited”, or “company”.
• The name can also contain abbreviations like “corp.”, “inc.”, “co.”, or “ltd.”
• The name should be unique and distinguishable from the name of any other company operating in the state as this will aid in the Pennsylvania Corporation name search.
• You should also check the list of restricted words, especially those associated with specific professions or industries-
• If you don’t want to use your legal name or the owner’s name then you can even opt for a DBA (doing business as) name also known as a fictitious name.

Pennsylvania Corporation Business Search

Once you’ve chosen a name for your corporation, the next step is to conduct a Pennsylvania Corporation name search. The website of the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations offers access to conduct a Pennsylvania business name availability search. The entity search online can be carried out by using a specific name and entity ID.

• Search by corporate name – This is the most commonly used method for a Pennsylvania Corporation name search. This type of search can be used for corporate names as well as fictitious names or business names. This name availability search option can be used by both domestic and foreign C and S Corporations. You don’t have to search by using a designator like Inc. or Corp., as the database will show the names of every type of entity registered or incorporated in the state along with their status such as active or expired. Let’s look at an example to understand this process.

  Example: You want to start a Software company using the name “Penn Center Systems”. You can conduct the Pennsylvania business entity search by using “Penn Center Systems” or a part of the name like “Penn Center”. The search options will reveal both specific names and all names that have these three words in various permutations and combinations. The results will show that “Penn Center Systems” already exists. In such a scenario, you can change this name a little and search again like “Penn Soft Systems”. Such a name is available and you can then reserve the chosen name. Alternatively, you can also file a DBA.

• Search by entity ID – Every entity registered or incorporated in Pennsylvania has an entity ID number allotted by the Pennsylvania Department of State. This Pennsylvania business entity search option is normally used for searching C and S corporations that are already listed in the database irrespective of their status.

Are you thinking of registering a Corporation in Pennsylvania?

Need any Assistance with a Pennsylvania Business Name Search?

A business name or a corporate name is the most important identifier for any type of company. It helps create the first impression amongst customers and is also required for carrying out all business related work and documentation. Hence, it’s important to choose the right name for your company and a Pennsylvania business name search will help you achieve this. If this process looks tedious then IncParadise can provide meaningful assistance.

Pennsylvania LLC Annual Filing Requirements

The annual requirements in Pennsylvania are governed by the Pennsylvania Consolidated & Unconsolidated Statutes. The Pennsylvania LLC annual requirements may be different compared to other entity types like corporations, partnerships, and sole proprietorships. If you start a limited liability company in this state then the mandatory annual requirements are categorized as the following:

Annual Registration

If you form a professional limited liability company (PLLC) in Pennsylvania then the annual registration will be a part of your mandatory requirements. Annual registration is also obligatory if you establish a foreign LLC engaging in professional services. This is one of the most important Pennsylvania LLC annual requirements and the Certificate of Annual Registration must be filed by April 15th each year pursuant to 15 PA Cons Stat § 8998 (2020). This filing should not be associated or mistaken for the Pennsylvania LLC annual report, which is a separate document. You are required to file this certificate with the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations. The fee is dynamic and will be $520 multiplied by the total number of members in the said LLC. If you fail to file the Certificate of Annual Registration, you will be subjected to heavy penalties.

State Business Tax

Every limited liability company has two very important annual requirements that they must be compliant with, which involve filing your state business taxes and the Pennsylvania decennial report. Since an LLC is considered to be a pass-through entity the company is not required to pay taxes. Instead, the members of the said company will have to file personal income taxes at a rate of 3.07%. The members of the LLC will also have to file federal self-employment taxes at a rate of 15.3%, which includes 2.9% for Medicare and 12.4% for Social Security.

State Employer Taxes

State employer taxes are another one of the important Pennsylvania LLC annual requirements. An employer can be an individual like a sole proprietorship business, or other entity types like a partnership, association, LLC, corporation, and government body among others. The Internal Revenue Code requires such entities to withhold federal income taxes from the wages paid to their employees. The Pennsylvania Department of Revenue declares that if a limited liability company in the state employs people then the LLC is required to withhold personal income tax at a rate of 3.07 percent.

Decennial Report

Every state has different annual requirements although the most common requirement is the annual report. In the state of Pennsylvania, you will be required to file a Decennial Report, which is filed once every 10 years. Let’s look at an example to understand these Pennsylvania LLC annual requirements better.

Annual Report from 2024

Pennsylvania is one of the few states that do not have an annual report. However, businesses are required to file a Decennial Report. The annual reporting requirements in the state are going to change starting in 2024 as the state will introduce a Pennsylvania LLC annual report like most other states. The Pennsylvania Act 122 took effect on January 2, 2023, and repealed the decennial report requirement. The new Pennsylvania LLC annual requirements will include the following:

• Name of the LLC
• Jurisdiction of Formation
• Registered office address in the state
• Entity number issued by the Pennsylvania Department of State
• Name of at least one member or partner
• Names and titles of the principal officers
• Address of the principal office

Do you want to file an Annual Report for your Pennsylvania LLC?

Pennsylvania INC Annual Filing Requirements

When you form a corporation in Pennsylvania, there will be different filing requirements apart from the Articles of Incorporation. The important filings for the Pennsylvania Corporation annual requirements include filing your taxes and annual reports. This will be applicable for both domestic and foreign corporations operating in the state and governed by the Pennsylvania Consolidated & Unconsolidated Statutes. Let’s look in detail at the Pennsylvania Decennial Report and other annual requirements.

Decennial Report

The Pennsylvania state business law requires all corporations and other associations registered with the Department of State to file a Pennsylvania Decennial Report if such entities have not made any filings in a period of 10 years since incorporation. This report is an integral part of the Pennsylvania Corporation annual requirements and is applicable for both domestic and foreign corporations.

Corporation Taxes and Annual Fee

Once you’ve incorporated your new business in the state of Pennsylvania, you will need to be compliant with all state requirements. The Pennsylvania Corporation annual requirements for domestic and foreign entities are almost the same, especially when it comes to filing of taxes. A business corporation operating in the state will be subjected to corporate net income tax, which has a flat rate of 8.99 percent. The corporate taxes unlike a Pennsylvania Decennial Report have to be filed each year on or before April 15th. This tax has to be filed with the Department of Revenue. Apart from this, you may also be required to file net income taxes, franchise taxes, capital stock taxes, sales and use taxes, and corporate loans taxes.

Annual Report from 2024

Most states in the USA require businesses to submit an annual report as part of the state’s annual requirements. Although a Pennsylvania Decennial Report (once in 10 years) has been the state requirement for corporations, it is now about to be changed. An annual report will be introduced as a part of the Pennsylvania Corporation annual requirements. This report has to be filed by corporations and nonprofit corporations before July 1st of each year beginning in 2024. The annual filing fee for the report is $7. The Pennsylvania annual report for corporations will include the following information:

• Name of the corporation
• The jurisdiction of incorporation
• The name of at least one director or partner
• The names as well as titles of the principal officers
• The address of the principal office
• The entity number or entity ID issued by the Pennsylvania Department of State

Thinking of filing an Annual Report for Pennsylvania Corporation?

Need any Assistance with Pennsylvania LLC or INC Annual Filings?

Annual requirements or compliances are different for each state, but most states have certain common requirements like filing your taxes and annual reports. The Pennsylvania Decennial Report is being repealed and the new annual report is being introduced in 2024 as a part of Pennsylvania Corporation annual requirements or LLC annual requirements.

Online Business in Pennsylvania

An online Business is also known as an e-business (electronic business) and it encompasses any form of business or commercial transaction that occurs over the Internet. E-commerce refers to an online business and this term has often been used interchangeably with e-business. If you’re planning to start an online business in Pennsylvania, you’ll need to understand the difference. An e-commerce business conducts online transactions, while e-businesses provide services and activities utilizing the Internet.

What are the biggest benefits of doing business online in Pennsylvania?

Pennsylvania’s strategic location allows the state to be well-connected to the rest of the nation. The state boasts of a state-of-the-art infrastructure, a strong transportation network, and access to a skilled workforce. If you want to start an online business in Pennsylvania then it’s time to focus on some of the benefits of operating an online business in this state.

• Access to the Internet – The most important component for any online business is reliable access to the Internet. Access to the Internet has grown in Pennsylvania from 81.2% in 2015 to 93.2% by 2020. According to a study by the Pennsylvania State University, access to the Internet has grown in Pennsylvania from 81.2% in 2015 to 93.2% by 2020. A federal program called the Broadband Equity, Access, and Deployment (BEAD) program has also been initiated in Pennsylvania to help increase access to high-speed Internet.
• Lower start-up costs – Startup and operational costs are a major concern for any new business. A lower startup cost is one of the top advantages when you start an e-commerce business in Pennsylvania. Depending on the type of startup and inventory, the operational costs would also be significantly lower than that of a traditional company. The state of Pennsylvania also provides several incentive programs for small businesses including grants and other funding programs.
• Flexibility – You can start an online business in Pennsylvania from your home or even from co-working spaces. This provides flexibility to an e-business while ensuring that you can reach out to customers in the state, the nation, and globally. You can even adjust your work schedule for your convenience to successfully balance the responsibilities between your work and personal freedom.

Top online business ideas in Pennsylvania

Whether you want to start an e-commerce business in Pennsylvania or any other type of online business, the state provides many resources and incentives. If you’re still trying to decide which type of business you want to start, here is a list of top and trending online business ideas to choose from:

• Dropshipping – This business model is one of the highest trending online business ideas today. Dropshipping is a fulfillment model where you as an entrepreneur outsource the handling and shipping of a variety of products to a third party. To legally operate this type of business, you will require an online business license in Pennsylvania. This particular type of business model is popular due to its high efficiency and low overhead.
• SEO specialist – Due to increasing demand, this has become one of the most favored online business ideas. This could be the right business model for if you want to start an online business from home in Pennsylvania. The role of an SEO specialist or expert is to identify online marketing strategies and tactics that will help increase the number of visitors to a specific website.
• Graphic Designer – Graphic design has existed since the advent of advertising. Easier access to high-speed Internet and the availability of a myriad of digital tools have made it one of the best online businesses to start. If you have the necessary skills then you can easily start this type of business from your home.
• Mobile Apps Development – The advancement of technology has reached unparalleled heights with mobile application development. This involves creating software for smartphones and tablets, as well as digital assistants. Mobile apps are used across all industries from retail and telecommunications to health, advertising, and insurance. You may need to obtain an online business license in Pennsylvania to conduct this type of business.
• Virtual Assistant – A virtual assistant (VA) is a type of specialized service that can perform a wide variety of tasks. A virtual assistant is also known as an independent contractor and can provide administrative services to customers based on their requirements.

Starting an Online Business in Pennsylvania

Pennsylvania is also known as the Keystone State, and it is home to diverse industries composed of companies that started from home, e-commerce businesses, and traditional companies. If you have a great idea and want to start an e-commerce business in Pennsylvania, then you will need to understand and follow the state’s small business guidelines. The following processes will help you understand the state and business-specific requirements, as well as the documentation needed for your online businesses.

1. Prepare your Pennsylvania online business idea and plan

The first and foremost area to focus on before you start an online business in Pennsylvania is creating a strategic plan. This will be your business plan and it’s a detailed outline that will set the course and determine the success of your online company. This type of plan refers to the starting phase, operational, financial, and marketing aspects. It’s important to remember that the plan should be designed based on the products or services offered. Because it will be based on the requirements of each e-business, no two plans can be similar. Some of the key components of the plan include:

• Business objective
• Business structure
• Mission and vision
• Short and long-term goals
• Defining risks
• Market research
• Competitive analysis
• Customer or targeted audience research
• Products and services
• Revenue model
• Logistics and Operations plan
• Internet marketing strategy
• Financial plan

2. Choose your Pennsylvania online business name

Once you have an online business idea, the next step is to register it with the state, which will allow you to become legally operational. Choosing a good business name is a chief requirement to become legally operational in the state. The name you select will not only be used to register your company in the state of Pennsylvania, but it will also serve other purposes such as banking, marketing, and booking a domain name among others. Here are some general tips for choosing the right name to start an online business from home in Pennsylvania:

• Keep the e-business name short, simple, and memorable.
• The name should have a connection to the product or services offered.
• To reserve the business name with the state of Pennsylvania, you will need to check the name availability.
• Follow all business naming guidelines as mentioned in the Pennsylvania Consolidated and Unconsolidated Statutes.
• Ensure the availability of the domain name for the chosen e-commerce business name.

3. Register your online business with the Pennsylvania Department of State

In order to make a business operational, you will need to apply for an online business license in Pennsylvania. However, it is important to register your e-business first. This process is known as a new business formation or incorporation and will vary depending on the type of entity structure you have chosen. So, if you choose to form a limited-liability company, then you will need to submit a Certificate of Organization or Articles of Incorporation for a corporation.

Start your online business in Pennsylvania today!

4. Obtain all necessary licenses and permits for your online business

Once you’ve registered your e-business with the state, the next step is to obtain the necessary online business license in Pennsylvania. Licenses and permits will help you to conduct transactions in the state and the licensing requirements and regulations will vary according to:

• The city or county you operate from
• The industry your business is based in
• Business activity

5. Buy a website domain and build an e-commerce website

Choosing the right domain name is both essential and important when planning to start an online business in Pennsylvania. Your domain name is an integral part of your website’s address and you can use your state registered name for this. The name you choose for your domain will help your customers find your website. It’s important to ensure that the domain name is easy to remember and may even describe what the site is about. There are two ways by which you can obtain a domain name:

6. Get an EIN and File your taxes

Apart from an online business license in Pennsylvania, another important requirement for most e-commerce businesses is to file your taxes. Your business activity, entity structure, and annual sales will determine the type of taxes you will have to file, and you will need an employer identification number (EIN) to do this. This is a type of Tax ID number that is issued for free by the Internal Revenue Service (IRS).

7. Open a bank account

If you want to start an e-commerce business in Pennsylvania, or any other online business that offers products or services then having a separate bank account is highly recommended. This account is known as a business bank account or checking account. Since customers will be submitting their payment online, you will need a payment gateway, as well as a proper bank account for receiving funds. The account will also help you with keeping track of your sales revenue and expenses.

8. Comply with taxes and other regulatory requirements

Once you start an online business in Pennsylvania, you will be required to comply with annual maintenance as well as tax requirements of the state. Some of the important requirements include:

• There are different types of taxes applicable in the state of Pennsylvania. The type of taxes that your e-business needs to file will vary according to the business activity and entity structure. If you start an e-commerce business in Pennsylvania, then one of the mandatory taxes that you will need to file is the sales tax. You may also be required to file personal income taxes.
• As a part of annual maintenance, you will be required to file a Decennial report. The laws will change soon, and you may be required to file an annual report each year starting from 2024-2025.
• Once you’ve obtained an online business license in Pennsylvania, it is important to maintain your renewal. The renewal time and fee may vary depending on the issuing authority or the county your business is operating from.

9. Market your business

Building a new business from scratch requires many strategies to work simultaneously and in sync to achieve success. If you start an online business from home in Pennsylvania, the next part of your strategy should be to focus on marketing the services, products, or the brand itself. You will need to contrive a plan that will help drive customer traffic to your website or online store. Some of the important areas to focus on include:

• Using search engine optimized (SEO) content.
• Create a strong email marketing strategy while continuing to build your email list.
• Boost your digital engagement by using different social media platforms like YouTube, Instagram, etc.
• Use of Mobile commerce (m-commerce) to reach out to the targeted customers.
• Use Google Ads for search engine marketing and advertise on various social platforms.
• Create meaningful partnerships with other brands to enhance cross-promotion.

Looking to start an online business in Pennsylvania?

You can start an online business in Pennsylvania based on trending e-business ideas. Pennsylvania provides high speed Internet access and other infrastructural support and resources to help you establish your brand. There are specific processes that you would be required to follow based on Pennsylvania’s Consolidated and Unconsolidated Statutes. IncParadise can assist you with ensuring that you can start an e-commerce business in Pennsylvania with ease.

Pennsylvania LLC or Corporation

The state of Pennsylvania offers many benefits or advantages to new business owners or companies. You can even choose from a wide variety of entity structures although the most popular are a limited liability company (LLC) and C-corporation. Choosing the right type of entity structure is a very important decision and should be taken very seriously. You will need to consider several factors when making a decision such as the possible tax consequences, the annual maintenance cost of a Pennsylvania Corporation or an LLC, and state laws. You will need to even consider the legal advantages each type of entity provides including protection against legal liability.

Which business entity should I choose for my Pennsylvania business?

Once you have decided to start a new business, it becomes important to identify the right structure. Each structure type has its own advantages and disadvantages. It’s important to note that the legal structure of your company will determine the business tax rates, management, registration process, paperwork requirement, hierarchy, and even fundraising prospects among others. If you plan to incorporate then the cost to form a Pennsylvania Corporation will be different from that of a sole proprietorship, partnership, or limited liability company. The two most popular structures are C-Corporations and LLCs. Let’s look at some of the prime characteristics of an LLC and a corporation.

• Ownership – Ownership is an important element for any legal structure. A corporation has shareholders who are considered to be owners, while an LLC can have a single owner or multiple owners, also known as members.
• Limited Liability Protection – One of the common advantages for both LLCs and corporations is limited liability protection. In either structure type, the owners will not be held responsible for any of the company debts.
• Startup costs – The chosen structure will play a key role in determining the overall costs to establish and operate a company. The formation cost of a Pennsylvania LLC or corporation is an important aspect of new business formation.
• Private or Public – A C-corporation is regarded as a publicly traded entity, while a limited liability company is a privately held entity.
• State or Business Tax – Taxes are viewed as a component of annual maintenance cost of a Pennsylvania Corporation or LLC, and the type and amount of taxes will vary depending on the legal structure.

Pros and Cons of Forming an LLC or Corporation in Pennsylvania

The entity structure that you choose will influence every aspect of your business from the day-to-day operations to the annual maintenance, taxes, and various risks associated with personal assets. If you’re planning to form an LLC or a corporation in Pennsylvania, it’s necessary to recognize each entity’s pros and cons including the cost to form a Pennsylvania LLC or a corporation.

Pros of an LLC or Corporation

• The Pennsylvania LLC annual fee is the same for a corporation.
• An LLC enjoys pass-through taxation on profits.
• You can start an LLC with a single member.
• An LLC enjoys a lot of management flexibility.
• The initial paperwork for an LLC is quite less in comparison to certain other structures.
• A corporation or an LLC can choose to be taxed as an S-Corporation.
• A business corporation can issue stock.
• Venture capitalist (VC) firms find corporations more attractive when compared to other entity structures.
• A Corporation enjoys perpetual life.

Cons of an LLC or Corporation

• The overall cost to incorporate in Pennsylvania may be higher than the cost to form any other entity.
• A corporation unlike other entities goes through double taxation on profits earned by the company.
• It’s difficult for an LLC to raise capital vis à vis a corporation.
• A limited liability company doesn’t enjoy perpetual existence.
• Depending on the state of formation, LLC members are subjected to self-employment taxes.

Pennsylvania LLC Cost

A Pennsylvania Limited Liability Company is one of the most selected entity structures in the state due to its numerous benefits. If you are thinking of registering your startup as an LLC then it’s important to know the cost to form a Pennsylvania LLC in advance. There are various expenses involved in forming and operating this type of business. Let us take a look at the various costs you may incur.

Cost for forming Pennsylvania LLC

The formation cost of Pennsylvania LLC consists of one-time costs, as well as recurring costs. These include:

• The LLC formation processes and fees are different from other entity structures. The first step towards registration is to file the Name Reservation Application in compliance with 15 Pa.C.S. § 208. This will require a fee of $70.
• According to state laws, you will need to hire and maintain a registered agent for service of process. The cost or fee would vary depending on the RA service you have chosen.
• The third and most important expense is the cost to form a Pennsylvania LLC. You will have to file a Certificate of Organization along with a $125 filing fee. If you want to expedite the process then there will be an additional fee varying from $100 to $1000 depending on the chosen service.

Annual maintenance cost for a Pennsylvania LLC

Once you’ve registered your limited liability company in Pennsylvania; it’s important to ensure that your company is in compliance with all state requirements including the LLC annual maintenance. This will include the Pennsylvania LLC annual fee. The costs involved include:

• Annual Report – Currently, a limited liability company is required to file a Decennial Report, which is filed once every ten years. The fee required is $70. This will change in 2024-2025 as the state is planning to introduce an annual report. The Pennsylvania LLC annual fee may change once it is introduced.
• Taxes – A limited liability company in Pennsylvania is considered to be a “Pass-through Entity”. Hence it will not be required to file any taxes. Instead, the members will have to file taxes on their share of profits. This type of cost to form a Pennsylvania LLC is a recurring cost as the taxes have to be filed each year. You may also be required to file other taxes as well. The cost of all forms of taxes will vary according to the rates of applicable taxes.
• Business Licenses – One of the important annual formation costs of a Pennsylvania LLC is the business license fees. This is a recurring cost as licenses and permits have to be renewed each year. The fee for licenses will vary according to the type of license and the number of licenses or permits required by an LLC.

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Pennsylvania Corporation Cost

Many entrepreneurs find C-corporations to be a favorable structure because it is attractive to investors. A major advantage of a corporation is its ability to raise capital, which is necessary for any form of business. When planning to incorporate your startup in Pennsylvania, you will need to be mindful of the two types of expenses required which include the initial or one-time costs, and the recurring costs. Let’s look at the cost to form a Pennsylvania Corporation.

Cost of Forming Corporation in Pennsylvania

The cost to incorporate in Pennsylvania is dependent on several factors but mostly on whether you want to form a domestic entity or a foreign company. The important costs related to incorporation in this state are comprised of the following:

• Name reservation is one of the first components of the cost to form a Pennsylvania Corporation. First, you will need to choose a company, then you will need to reserve it using the Name Reservation Application in compliance with 15 Pa.C.S. § 208. The fee for this process is $70. If you choose a fictitious name also known as DBA (Doing Business As) then the fee will be different.
• According to the 2020 Pennsylvania Consolidated & Unconsolidated Statutes, 15 PA Cons Stat § 1507 (2020), you will need to hire and maintain a registered agent for service of process. The cost or fee would vary depending on the service you have chosen.
• The fee for registering your company with the state is the most important cost to incorporate in Pennsylvania. You will have to file the Articles of Incorporation pursuant to 15 PA Cons Stat § 1306 (2020). The fee for this service is $125. You can expedite the process for an additional fee varying from $100 to $1000.
• You’ll also have to officially publish a notice of intention to file the articles of incorporation. This has to be published in two newspapers that have general circulation and one in a legal newspaper. The fees to publish will vary depending on the newspaper.

Annual maintenance cost for a Pennsylvania Corporation

Apart from the initial cost to form a Pennsylvania Corporation, there will be other expenses associated with annual maintenance of your company. The costs involved are as follows:

• Annual Report – Currently, corporations in Pennsylvania are required to file a Decennial Report. This type of annual report is filed once every ten years. The fee for this service is $70 and is considered an annual maintenance cost of a Pennsylvania Corporation. This will change in 2024-2025 as the state is planning to introduce an annual report and the fee for that filing may be different.
• Taxes – A Pennsylvania corporation is required to file corporate taxes at the flat rate of 8.99 percent. Apart from this, other taxes may be applicable and will vary depending on the business activity. Taxes are considered to be an important component of the annual maintenance cost of a Pennsylvania Corporation and are a recurring cost that is filed each year.
• Business Licenses – Once you’ve incorporated in Pennsylvania, you will need to apply to obtain the necessary business licenses and permits. These licenses will allow your company to operate in the state. This is an integral component of the cost to form a Pennsylvania Corporation, and is considered to be a recurring cost as licenses must be renewed each year, or as specified by the state or licensing board.

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Need any Assistance in Forming Your Pennsylvania LLC or Corporation

Pennsylvania has several types of entity structures that you can choose from. An LLC or a corporation are two of the most popular structures, although their registration processes and fees may vary. The cost to form a Pennsylvania LLC or corporation will vary for domestic and foreign entities. We, at IncParadise can provide valuable assistance by handling the requirements for a new business formation or incorporation in the state.

Pennsylvania Corporation

If you’re planning to register a Corporation in Pennsylvania then you will find that this could be a good decision as the state has a healthy business climate. A corporation is a type of entity that offers many advantages and to top it, the state also offers several benefits in terms of resources, a supportive infrastructure, and business incentives. Employees are a primary requirement for every new business and the state provides a highly-educated and skilled employee pool. Pennsylvania is also quickly becoming a platform for recruiting STEM (science, technology, engineering, or mathematics) workers. One of the benefits of incorporating in Pennsylvania is its emergence as a startup ecosystem complete with accelerators and incubators.

What is a Pennsylvania Corporation?

A corporation also known as the traditional C Corporation is one of the most popular business structures in Pennsylvania. To form a Corporation in Pennsylvania, the first thing you will need to understand is the type of corporate structures available. It is a type of legal entity where owners and shareholders are taxed separately. This means that the assets and income of owners or shareholders are separate from that of the C Corporation. If you want to know how to form a Corporation in Pennsylvania then it is important to identify the type of corporations you can form in this state. They include:

• Business Corporations (C-Corp)
• Business Corporation (S-Corp)
• Foreign Corporations
• Nonprofit Corporations
• Professional Corporations
• Non-stock Corporations
• Benefit Corporations
• Statutory Close Corporations

What are the benefits of incorporating in Pennsylvania?

Entrepreneurs prefer to register a Corporation in Pennsylvania as this type of business structure has several advantages over other entity structures. Some of the advantages include:

• Limited liability – Limited Liability is one of the major benefits of incorporating in Pennsylvania. This simply means that a corporation limits the liability of the owners or shareholders and thus if such a company is sued, then the owners or shareholders will not be personally liable for any damages or debts. This type of entity protects the personal assets of the owners or shareholders.
• Access to capital – Easy access to capital is one of the important reasons why entrepreneurs prefer to incorporate in Pennsylvania. Incorporation helps raise money for the business through the issuance of stock, which can be sold to investors for raising capital. Apart from this, venture capitalists (VCs) find it easier to invest in C corporations in comparison to other kinds of entities.
• Increased credibility – One of the important benefits of incorporating in Pennsylvania is that it will help the company create a better professional image and establish higher credibility for potential partners, customers, suppliers, employees, and vendors.

Starting a Pennsylvania Corporation

Pennsylvania is famous for its strategic location and is well connected to New York City and Washington, DC. Entrepreneurs and corporations involved in manufacturing and anything related to transportation and logistics find the state’s strategic location and infrastructure critical for overall growth. If you’re also planning to form a Corporation in Pennsylvania then there are several important processes that you will need to focus on.

1. Name a Pennsylvania Corporation

If you’re planning to incorporate, one of the first steps to take is to identify a corporate name. The business name plays a key role when it comes to building a brand image. The corporate name will help to create a noteworthy first impression with your partners and customers. You can finalize a corporate name by following state naming guidelines and conducting a Pennsylvania Corporation search. The Pennsylvania naming guidelines state that a corporation must include words like “corporation”, “incorporated”, or abbreviations like “corp.”, or “inc.” The naming guidelines are governed by 15 PA Cons Stat § 5303 (2020).

2. Appoint a Pennsylvania registered agent

When it comes to the new business formation or incorporation process, there are certain state business requirements that an owner must fulfill. To incorporate in North Carolina, your first step will be to hire and maintain a registered agent in the state pursuant to the 15 PA Cons Stat § 1507 (2020). A registered agent could be an individual or a company that has agreed to accept all legal mail on behalf of your corporation. This is known as Service of Process.

3. Choose the Pennsylvania Corporation’s initial directors

Another important step when learning how to form a Corporation in Pennsylvania is choosing the entity’s initial directors. These are also known as the first directors of the corporation and will also be named in the articles of incorporation. They are normally elected through an organizational meeting or by those individuals who have been appointed by the initial owners or shareholders of the said entity. The initial directors will have to serve until the shareholders of the corporation hold their first meeting for electing their successors. The board of initial directors assists in making important decisions pertaining to several areas of the corporation like the adoption of bylaws and the issuance of shares among others.

4. File Articles of Incorporation with the PA Department of State

Once you’ve conducted a Pennsylvania Corporation search and reserved your business name, the next step is to incorporate. You will be required to prepare and submit the Articles of Incorporation pursuant to the 15 PA Cons Stat § 1306 (2020). You can form a Corporation in Pennsylvania by submitting the articles to the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations along with a fee of $125. It is important to note that you will have to officially publish (advertisement) a notice of intention to file articles of incorporation pursuant to the 15 PA Cons Stat § 1307 (2020).

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5. Get an EIN

If you’re planning to register Corporation in Pennsylvania, you may be obligated to fulfill certain annual requirements. One such requirement is to file corporate and other business taxes. In order to file taxes, you will have to apply to obtain an Employer Identification Number (EIN). This is a 9-digit unique identifier assigned by the Internal Revenue Service (IRS). It is also known as the Federal Employer Identification Number (FEIN) and will allow corporations to open business bank accounts.

6. Prepare bylaws for your Pennsylvania Corporation

Another significant requirement for any new corporation is the corporate bylaws. Whether you register a Pennsylvania Corporation online or offline, this is a mandatory requirement that the entire company’s functions are dependent on. Hence, the bylaws are known as the governing rules and are the first act of the initial board of directors. These guiding principles direct the initial board of directors in their work of overseeing the day-to-day operations of the said corporation.

• Statement of Purpose
• Board of directors
• Titles of the officers of the corporation
• Shareholders owning stock in the company
• Committee and committee members
• Procedure and timeline for annual meetings
• Issuance of stock to shareholders
• Rights and responsibilities
• Conflicts of interest
• Amendment to the Bylaws

7. Hold an organizational meeting

Once you file the Articles of Incorporation to incorporate in Pennsylvania, the entity will be required to hold an organizational meeting. This is an initial meeting that is considered to be a basic organizational formality for a corporation that has been organized under the laws of the US state of Pennsylvania. This meeting is typically not held in person and is instead documented through the unanimous written consent of the initial board of directors of the company. Some of the key areas that the organizational meeting focuses on are:

• Approving corporate bylaws
• Drafting the articles of incorporation
• Distribution of initial shares
• Election of officers
• Voting to accept the stock certificates
• Approving the corporate seal

8. Open a bank account for your Pennsylvania Corporation

There are many benefits of incorporating in Pennsylvania but there are certain points to consider before or after incorporation. One major point of focus is conducting financial transactions with ease. This is only possible if you’ve opened a business bank account. This type of bank account is also known as a checking account and needs to be kept separate from your personal bank account. One of the reasons companies prefer a corporate banking account is because it helps to improve the entity’s overall credit score and keeps track of income and expenditures.

9. Issue stock

If you’ve decided to form a Corporation in Pennsylvania then your company will be required to issue stock as governed by Title 15, 2020 Pennsylvania Consolidated & Unconsolidated Statutes, § 1528 and § 7705. According to Pennsylvania statutes, you can issue capital stock designated as membership shares. The shares of such a corporation will be represented by certificates and in the absence of these; they will be known as un-certificated shares. A corporation issues stock for raising funds that will help the business operate. The holder of such stock will be known as a shareholder and will certainly have a claim to a part of the assets and earnings of the corporation.

10. Obtain necessary licenses and permits

Once you’ve incorporated in Pennsylvania, you will be required to obtain the necessary business licenses and permits. You will not be able to operate your business or conduct transactions in the state without it. You will need to conduct a Pennsylvania Corporation search for licenses applicable specifically to your company, which will be determined by:

• The industry your corporation specializes in
• The city or county your business is operating from

11. Comply with other tax and regulatory requirements

Once you register your Corporation in Pennsylvania, you will be required to comply with state annual maintenance requirements. One of these major requirements is filing Pennsylvania’s annual report currently known as a Decennial report. This is one of the few states where a Decennial Report has to be submitted once every 10 years pursuant to 54 PA Cons Stat § 503 (2020). The Decennial report will be replaced by an annual report from 2025 onwards.

Know more about starting a Pennsylvania Corporation

If you have decided to incorporate in Pennsylvania but are faced with several queries then this section will help you. This section deals with queries specific to various aspects of incorporation such as the corporate name, starting costs, dissolution, S Corporation, and foreign corporation among others.

Why register a Corporation in Pennsylvania?

The many benefits of incorporating in Pennsylvania make it a favored destination for entrepreneurs and startups. Some of the top advantages are:

• The state provides a lot of support and resources for small businesses
• It’s geographic location is of utmost importance and has a strong transportation infrastructure for B2B (business-to-business) and B2C (business-to-consumers)
• It is home to world-class universities and a highly skilled workforce
• Cities like Pittsburgh are home to high-impact industries like cyber-security, robotics, energy, artificial intelligence, health, and life sciences.
• When you form a Corporation in Pennsylvania, you will be able to leverage state grants programs, tax incentives, and other funding programs.

How do I know if my Pennsylvania Corporation name is available?

The incorporation process requires you to provide a company name. First, you will need to identify a name that is in compliance with state naming guidelines. The next step would be to conduct a Pennsylvania Corporation search. This is also known as a name availability search and will indicate if your chosen name is available for reservation or is already in use.

What will be the cost to form a corporation in Pennsylvania?

If you want to register a Corporation in Pennsylvania then you will be required to submit Articles of Incorporation for a domestic entity. The initial cost to register a Pennsylvania C-Corporation is $125. If you want to expedite the process then there will be an additional fee depending on the chosen expedited service, like the fee for same-day service is $100, while a one-hour service is $1,000. Apart from this initial incorporation cost, there will be other expenses such as the name reservation, ​Articles of Amendment, application for business licenses and permits, and filing of annual reports among others.

Can I register an S Corporation in Pennsylvania?

Yes, you can elect for the S-Corporation tax designation in Pennsylvania. S corporation is basically a tax designation and is often beneficial for those business owners who receive large distributions apart from their salary. In order to become an S Corporation, you will be required to submit a completed 2553 form (Election by a Small Business Corporation).

Do I need a business license for my Pennsylvania Corporation?

Yes. You may require single or multiple business licenses depending on the industry, the location of your company, and the business activity.

Can I register a foreign Corporation in Pennsylvania?

Yes. You will need to apply for the foreign qualification process to operate your business in this state. You will need to submit a Foreign Registration Statement to incorporate in Pennsylvania. This document is also known as a certificate of authority and you have to submit it pursuant to 15 PA Cons Stat § 412 (2020). You will also be required to officially publish a notice of intention to conduct business in this state pursuant to 15 PA Cons Stat § 4124 (2020).

How can I dissolve my Pennsylvania Corporation?

If you want to dissolve your corporation at any given point in time, then you will need to submit Articles of Dissolution-Domestic Corporation, along with a fee of $70. You will also be required to submit tax clearance certificates from the Department of Revenue as well as from the Bureau of Employment Security.

Ready to Start a Pennsylvania Corporation?

Pennsylvania offers several types of business structures for you to choose from. Although, there are many benefits of incorporating in Pennsylvania by comparison to other business structures. For domestic or foreign entities, if you want to incorporate in Pennsylvania, IncParadise can assist you with the process of incorporation.