Forming an LLC in Pennsylvania offers several advantages for business owners, including liability protection, pass-through taxation, and more. Here’s a comprehensive step-by-step guide on how to establish an LLC in Pennsylvania:
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STEP 1: Choose a Name for Your LLC
Naming Requirements: Your LLC’s name must include “Limited Liability Company,” “L.L.C.,” or “LLC.”
Distinctiveness: The name should be unique and distinguishable from other registered business entities in Pennsylvania.
Name Search: Use the Pennsylvania Department of State’s Business Entity Search tool to check if your desired name is available.
Optional Name Reservation: If you’re not ready to form your LLC immediately, you can reserve a name for 120 days by filing a Name Reservation application with the Pennsylvania Department of State.
Time it Takes to name an LLC
Researching and deciding on a name: 1-2 hours
If opting for a name reservation: The act of filing can take about 10-15 minutes.
If opting for a name reservation: Filing can take minutes, but approval might take a few days to a week.
STEP 2: Appoint a Registered Agent
Pennsylvania requires a Registered Office, not a Registered Agent. This can be an actual office address or a commercial registered office provider.
The Registered Office is where all official documents and notices will be sent.
Time it Takes to be a Registered Agent
Registered Agents MUST BE at the Business Address everyday during business hours. This is why Home Addresses Are Not Accepted.
If you already have someone in mind (like an attorney or a service), this can be quick. If you need to find and appoint a registered agent: 1-3 hours.
Why use Inc Authority vs Being your own Registered Agent?
Benefits of having Inc Authority serve as your Registered Agent include:
· Privacy: Keep your home address private
· Efficiency: Easily receive and promptly process state and legal documents
· Hassle-free: Reduction of junk and solicitation mail
· Legal Compliance: Avoid fines, penalties, and possible dissolution
· Convenience: Serves as your public & legal business address
Inc Authority offer you a FREE year of Registered Agent Service with the purchase of your LLC.
STEP 3: File the Certificate of Organization
Prepare and submit the “Certificate of Organization” to the Pennsylvania Department of State.
The form requires information such as the LLC’s name, registered office address, and organizer’s details.
You can file this form online or by mail.
A filing fee will be associated with this form.
Time it takes to write the Articles of Organization
Preparing the document: 1-2 hours
Filing online: 30 minutes to 1 hour.
Waiting for confirmation/approval: This can range widely, but typically, online filings can be processed in a few days to a couple of weeks.
Why Risk Making Mistakes and Wasting Hours figuring it out?
STEP 4: Create an Operating Agreement
Although not required by the state of Pennsylvania, it’s beneficial to draft an Operating Agreement for your LLC.
This internal document establishes guidelines for your LLC’s operations, member roles, ownership percentages, and other management details.
The Operating Agreement is not submitted to the state; it’s for internal use only.
Time it takes to write an Operating Agreement
If using a template and making minimal changes: 1-3 hours
If drafting from scratch or having extensive negotiations among members, it could be considerably longer, but for our purposes, we’ll stick with the 1-3 hours range.
If drafting from scratch or having extensive negotiations among members: Several days to weeks.
Why Spend Hours or even Days trying to figure it out?
Don’t get stressed out with the paperwork… Let us create a Custom Operating Agreement for you. Save yourself the time and hassle, let the experts at Inc Authority set up your LLC up properly with an Official operating Agreement in only 5 minutes vs spending hours doing it yourself. Make Inc Authority’s lawyers and staff spend hours preparing your documents for you, while sit back, chill, and watch Netflix!
STEP 5: Obtain an Employer Identification Number (EIN)
Apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes.
You can apply for an EIN online at no cost through the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
The EIN will be used for tax filings, opening bank accounts, and hiring employees.
Time it takes to get an EIN / Tax ID
Filling out the online form and receiving the EIN: Approximately 0.5 to 1 hour (the online process is relatively quick if there are no complications).
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SO HOW MUCH TIME WILL IT TAKE TO FORM AN LLC MYSELF? DO IT MYSELF (DIY) an LLC?
Total Time Investment (Minimum): 5 hours (if you exclude the higher range estimates and name reservation)
Total Time Investment (Maximum): 11.5 hours (if you include the higher range estimates and name reservation)
This gives a ballpark range of 5 to 11.5 working hours for an individual, excluding all waiting times. It’s worth noting that these times can vary based on the person’s familiarity with the processes and any specific details or challenges related to the business being set up.
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