A limited liability company (LLC) offers the advantages regularly associated with partnerships and corporations. It is treated as a partnership and enjoys liability protection of a corporation. For a Pennsylvania LLC to be formed, a Certificate of Organization is required to be filed with the Corporation Bureau.
Starting an LLC in Pennsylvania is easy and secure. LLC formation starts with naming your LLC. Make sure the name is available and consider domain names as well. The words “limited liability company” or the abbreviation LLC must accompany the official legal business document name of your company.
A registered agent can also be nominated to help you with the process. The registered agent must have a Pennsylvania State address and be a resident of the state. A Certificate of Organization for a Domestic LLC is required to form a Domestic LLC.
An EIN, Employer Identifcation Number, or Federal Tax Identification Number, is required after LLC formation. This allows your company to open a bank account and hire additional employees. The EIN can be obtained from the IRS.
An LLC is easy to form online. Firms can assist in drafting custom Pennsylvania company certificate of organization documents. Additional services that firms provide include:
• State filing with the PA Department of state
• Organizer initial resolution
• LLC operating agreement
• State filing fees
• Registered Agent in Pennsylvania
Pennsylvania LLCs file a decennial report once every decade. The decennial report incurs a fee of $70. The Pennsylvania Department of State Corporation Bureau requires LLCS to file a Certificate of Annual Registration by April 15 for every year. Each member must pay a fee of $460.
A Pennsylvania LLC incurs a personal net income tax rate of 3.07% and sales tax rate of 6.22%.
What is an LLC?
LLC refers to a Limited Liability Company, and it is organized by business owners. They have fewer corporate formalities and can be taxed by the IRS as a sole proprietorship, S corporation, or C corporation.
Each state has different requirements and regulations regarding the formation of an LLC. Business owners should check with state laws when considering forming an LLC.
Owners of LLCs are known as members, they can be individuals, corporations, other LLCs, or foreign entities. There is no limit on the number of members an LLC can have. In most states, “single-member” LLCs are allowed, where there is only one owner involved in managing the LLC.
The IRS will treat the LLC as a corporation, partnership, or included in the LLC owners personal tax return. A domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless they file Form 8832 and elect to be treated as a corporation.
LLCs carry tax advantages over other forms of business such as limited partnerships. The owners of an LLC do not assume personal liability for business debt, and any losses of the LLC can be used as tax deductions against active income.
An LLC can be formed through the state business formation process or consulting with LegalZoom.