How to Start a Business in Pennsylvania
- Pennsylvania Business Facts and Environment
- Step 1: Decide on a Business Structure
- Step 2: Pick a Business Name
- Step 3: Register the Business
- Step 4: Obtain Your Federal Employer Identification Number
- Step 5: Open Company Bank and Credit Accounts
- Step 6: Set-up An Accounting System
- Step 7: Obtain Licenses and Permits
- Step 8: Hire Employees (if applicable)
- Step 9: Obtain Business Insurance
- Step 10: Systemize and Organize
- Step 11: Branding and Marketing
- Step 12: Annual and Ongoing Requirements
- Important Pennsylvania Contacts
Pennsylvania Business Facts and Environment
PA Business Facts
One of America’s original thirteen colonies, Pennsylvania is a state of historical firsts including home of the United States’ first capital city, baseball stadium, auto service station, computer and daily newspaper. With an impressive group of universities and a talented workforce, the capital of Philadelphia is home to a robust tech startup scene and provides public transportation for commuters to major markets such as New York City and Washington, DC. Pennsylvania’s revitalized city of Pittsburgh offers a low cost of living and an innovative startup community.
Major Companies Headquartered in Pennsylvania
Major companies in Pennsylvania include Comcast, The Hershey Company, Crayola and Dick’s Sporting Goods.
Startup Environment
Small businesses employ nearly half of Pennsylvania’s workforce. Pennsylvania has a viable startup environment with reliable infrastructure, renowned educational facilities and access to key markets, though it should be noted that Pennsylvania entrepreneurs do face a high corporate income tax and a high tax burden overall.
How to Start a Business in Pennsylvania
Before starting a business in Pennsylvania, there are some essential steps to complete.
Step 1: Decide on a Business Structure
There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.
- A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
- A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
- An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.
Step 2: Pick a Business Name
Choosing a business name is easier said than done – many legal and business problems can arise from choosing the wrong name (you can always change it later, but the less number of times you have to do that, the better). In Step 3 we’ll show you how to search for the name in Pennsylvania, but we highly recommend you do the following before searching Pennsylvania state databases:
- Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
- Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
- Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself. Tip: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
- Make sure your company name choice is available by searching the Pennsylvania Secretary of State Business Entity Database. NOTE: Make sure to search variations of spelling, plurals and misspellings.
Restrictions on Pennsylvania Business Name & Business Purpose
- Your Pennsylvania LLC should include “Company”, “Limited”, “Limited Liability Company” or an abbreviation.
- Certain words require additional paperwork if you prefer to include them in your business name. This encompasses names associated with institutions such as credit union or banks, and words associated with professions such as:
- Doctors
- Engineers
- Attorneys
- Architects
Step 3: Register the Business
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Pennsylvania.
How to form an LLC in Pennsylvania
- A Pennsylvania limited liability company is formed by filing a Certificate of Organization accompanied by a docketing statement with the Bureau of Corporations and Charitable Organizations.
- Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.
How to Incorporate in Pennsylvania
- File the Articles of Incorporation and the accompanying docketing statement with the Bureau of Corporations and Charitable Organizations.
- Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
- Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
NOTE: When registering a new company the Secretary of State can take several weeks to file the paperwork. You can expedite the process by hand delivering the documents directly to them or one of their field offices and paying an additional fee.
TIP:Check our order form to see how long Pennsylvania is currently taking to process regular and expedited orders.
How to File a DBA in Pennsylvania
To file a DBA in Pennsylvania, the Fictitious Name registration form must be filed with the Bureau of Corporations and Charitable Organizations. This application should include the following information:
- The fictitious name, which can be searched in the Pennsylvania Department of State business name database.
- A brief statement concerning the nature or character of the business.
- The address, including number and street, if any, of the principal place of business.
- The name and address of the person interested in the business.
NOTE: Pennsylvania DBAs have a publishing requirement.
Considerations when registering a Pennsylvania business
Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
Ready to register a business in Pennsylvania?
- We specialize in registering businesses in Pennsylvania.
Ready to Start Now? Let Us Do The Work
Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.
- Learn more about our business formation service
- Read our verified reviews and 100% Satisfaction Guarantee
- Contact our friendly support team if you have any questions
Step 4: Obtain Your Federal Employer Identification Number
Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.
To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.
TIP: We will obtain your EIN for you if you we form your company.
Step 5: Open Company Bank and Credit Accounts
To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork b) your EIN c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).
Click here to view a list of our recommended banks in our Vendor Network.
TIP: Our business formation service includes a free banking resolution for your use.
Step 6: Set-up An Accounting System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.
Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.
Review our list of Accountants, Accounting Software and Bookkeepers in our Vendor Network.
Step 7: Obtain Licenses and Permits
Now that you’ve registered your business name in Pennsylvania, you may need to obtain a business license for your company. A business license authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
TIP: We can help you identify the necessary forms to obtain your business license.
Step 8: Hire Employees (if applicable)
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.
Review our list of recommended Payroll Providers in our Vendor Network.
Step 9: Obtain Business Insurance
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.
Click here to view our list of insurance providers in our Vendor Network.
Step 10: Systemize and Organize
Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.
Step 11: Branding and Marketing
Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.
Step 12: Annual and Ongoing Requirements
- Pennsylvania LLCs are not required to file an Annual Report, however, every Pennsylvania LLC must file a Decennial Report every ten years during the years ending with 1.
- Pennsylvania corporations are not required to file an Annual Report, however, every Pennsylvania corporation must file a Decennial Report every ten years during the years ending with 1.
Click here to view our MyCompanyWorks Premium™ service which can automate most or your ongoing compliance tasks.
Important Pennsylvania Contacts
Pennsylvania Secretary of State
Bureau of Corporations and Charitable Organizations
206 North Office Building, 401 North Street
Harrisburg, PA 17120
Phone: 717-787-1057
Fax: 717-783-2244
Pennsylvania Department of Revenue
Pennsylvania Department of Labor and Industry
Pennsylvania Startup Resources
Small Business Administration (SBA) Pennsylvania
Pennsylvania Chambers of Commerce
Pennsylvania Small Business Assistance Network
The Pennsylvania Small Business Development Centers (PA SBDC) – statewide, nationally accredited program that provides high quality one-on-one consulting, training and information resources to empower new and existing businesses.
Entrepreneur Works – offers entrepreneurs one-on-one technical assistance, business training and networking opportunities.
Welcoming Center for New Pennsylvanians (WCNP) – provides training opportunities including English for Entrepreneurs, business development clinics and one-on-one business advice.
Women’s Opportunities Resource Center – provides entrepreneurial training, business assistance, and access to business and financial resources, primarily to economically disadvantaged women and their families.
Pennsylvania Business News
Pennsylvania Green Business Resources
