How to Form an LLC in Pennsylvania
Forming an LLC in Pennsylvania is a straightforward process that provides liability protection and tax flexibility for business owners. The initial filing fee is $125, filed with the Pennsylvania Secretary of State.
Step 1: Choose Your Business Name
Your LLC name must be distinguishable from existing business entities registered in Pennsylvania. The name must include "LLC" or "Limited Liability Company." Check name availability through the Secretary of State's website before filing.
Step 2: File Articles of Organization
Submit your Articles of Organization to the Pennsylvania Secretary of State with the $125 filing fee. This document establishes your LLC as a legal entity. Processing times vary but typically take 5-10 business days.
Step 3: Obtain an EIN
Apply for a federal Employer Identification Number (EIN) from the IRS at no cost. This is required for tax filing, opening a business bank account, and hiring employees.
Step 4: Register for State Taxes
Register with the Pennsylvania Department of Revenue for applicable tax accounts. You will need a sales tax permit to collect the 6% state sales tax. Pennsylvania has a state income tax that affects LLC pass-through taxation.
Ongoing Costs
Pennsylvania does not impose an annual franchise tax on LLCs, keeping ongoing costs low. An annual report fee of $70 is also required.
Pennsylvania LLC Tax Advantages
While Pennsylvania does impose a state income tax, the LLC structure offers flexibility in how income is taxed. The 6% state sales tax requires proper collection and remittance procedures.