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How to Start a Business in Pennsylvania

Are you planning on starting a new business in the state of Pennsylvania, but having some trouble getting started? Are the endless websites and paper trails making you feel overwhelmed? Look no further.

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The entrepreneurial spirit thrives in Pennsylvania, a state that several hundred thousand small businesses call home. Nearly half of all private-sector jobs in Pennsylvania fall under the small-business umbrella. Pennsylvania’s key industries include energy, technology, advanced manufacturing, life sciences, and film production. However, the corporate income tax is higher than in most states, and businesses must navigate a difficult permitting and regulatory system to get up and running (we are going to help with that). But Pennsylvania works to encourage entrepreneurs through state-funded resources, such as regional outposts for Small Business Development Centers, and Partnerships for Regional Economic Performance, and educational programs such as the Entrepreneurship Institute at Temple University in Philadelphia.

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“How to Start a Business”

Starting a business can be both exhilarating and challenging. It requires your full attention and energy. It all begins with an idea, an observation that there is a problem and the belief that you have a new solution – or a better one. Allow us to walk you through the steps in this free guide: How to Start A Business.

General resources for starting a business in Pennsylvania

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Fun facts about starting a business in Pennsylvania

Famous business headquartered in Pennsylvania David’s Bridal

David’s Bridal is a company that specializes in wedding dresses, prom gowns, and other formal wear. It is the largest American bridal store chain. David’s Bridal currently operates more than 300 stores in 45 states, as well as in Canada and Puerto Rico.

Famous entrepreneur from Pennsylvania Manoj Bhargava

Manoj Bhargava is a businessman and philanthropist, born in Lucknow, India, and raised in Philadelphia, Pennsylvania. He is the founder and CEO of Living Essentials LLC, which is known for producing the 5-hour Energy drink. In 2015, Bhargava pledged 99% of his wealth to improving the wellbeing of the world’s less fortunate. In 2016, Bhargava told National Geographic that he planned to distribute 10,000 of his stationary, power-generating bikes to rural homes and villages in India.

“Philanthropy is natural. For a mother, taking care of her children is natural. If I am rich, I take care of the poor, like a mother would.”

Manoj Bhargava
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Which type of legal structure is best for my business in Pennsylvania?

You must consider the tax, legal, and liability implications carefully before deciding on the best structure. We strongly recommend you incorporate.

Here are five helpful steps to determine the best legal structure for your business:

Click one of the buttons below to learn more about the different types of business legal structures and how to start them in the state of Pennsylvania.
LLC (Limited Liability Company)
A limited liability company (LLC) is a hybrid legal structure that provides the limited liability features of a corporation with the tax efficiencies and operational flexibility of a partnership.

Steps to starting an LLC in Pennsylvania:

  • Step 1 — Choose a name for your LLC.
  • Step 2 — File a Certificate of Organization.
  • Step 3 — Appoint a Registered Agent.
  • Step 4 — Prepare an Operating Agreement.
  • Step 5 — Comply with any publication requirements.
  • Step 6 — Comply with other tax and regulatory requirements.
  • Step 7 — File Annual Registration (professional LLCs only)
  • Step 8 — Register foreign LLCs doing business in Pennsylvania.

For help forming your LLC in Pennsylvania we recommend CorpNet (they have fees for their service).

Alternatively, visit the Pennsylvania Department of State website.

Other Pennsylvania resources for LLCs:

Secretary of State Business Name Database: Search for the availability of your LLC name here.
File your “Name Reservation Form” here.
File your “Certificate of Organization” here.
File your “Annual Registration” (for professional LLCs only) here.

Commercial Registered Office Providers: Every Pennsylvania LLC must have an agent for service of process. In Pennsylvania, this is called a “registered office.”

IRS EIN Online:x Apply for an Employer Identification Number (EIN) for your LLC here. If your LLC has more than one member, you must get an EIN, even if you have no employees.

Pennsylvania Department of Revenue: If you will have employees or will be selling goods, you’ll need to register with this site.

Sole Proprietorship
A sole proprietorship is an unincorporated business. A sole proprietorship has one owner who pays personal income tax on all profits from the business. With little government regulation, they are the simplest business to set up or take apart, making them popular among individual business owners or self contractors.

Steps to starting Sole Proprietorship in Pennsylvania:

  • Step 1 — Name your sole proprietorship.
  • Step 2 — File a fictitious business name with the Department of State.
  • Step 3 — Obtain licenses, permits, and zoning clearance.
  • Step 4 — Get an Employer Identification Number (EIN).

For help forming your sole proprietorship in Pennsylvania we recommend http://www.corpnet.com/ (there are fees for their service).

Alternatively, you can visit the Pennsylvania Department of State website.

Other Pennsylvania resources for Sole Proprietorship:

Secretary of State Business Name Search: Search for the availability of your business name here. A sole proprietor may use his or her given name, or an assumed business name.
File your “Fictitious Business Name Registration Form” here.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your sole proprietorship here. If you hire employees, you will need an EIN.

Pennsylvania Department of Revenue: If you will have employees or will be selling goods, you’ll need to register with this site.

Partnership
A partnership is created from two or more people doing business together for profit and share ownership. Each partner contributes to all aspects of the business, and shares in the profits and losses of the business.

Steps to starting Partnership in Pennsylvania:

  • Step 1 — Choose a partnership name. e your LLC a name.
  • Step 2 — File a fictitious business name.
  • Step 3 — Create a partnership agreement.
  • Step 4 — Obtain licenses, permits, and zoning clearance.
  • Step 5 — Get an Employer Identification Number (EIN).

For help forming your partnership in Pennsylvania we recommend CorpNet (they have fees for their service).

Or, visit the Pennsylvania Department of State website.

Other Pennsylvania resources for Partnership:

Secretary of State Business Name Search: Search for the availability of your business name here. A partnership may use the surnames of the individual partners, or a fictitious business name.
File your “Fictitious Business Name Registration Form” here.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

Business Licenses: Search this site for licenses that may be required of your business.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your partnership here. Partnerships must have an EIN, whether you have employees or not.

Pennsylvania Department of Revenue: If you will have employees or will be selling goods, you’ll need to register with this site.

S Corporation
An S corporation (or S Corp) is a special type of corporation created through an IRS tax election. An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. The corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.

Steps to starting S Corporation in Pennsylvania:

  • Step 1 — Choose a name for your corporation.
  • Step 2 — File a Certificate of Formation with the County Probate Court.
  • Step 3 — File Articles of Incorporation.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Register foreign LLCs doing business in Pennsylvania.
  • Step 10 — Register foreign corporations doing business in Pennsylvania.

For help forming your S corporation in Pennsylvania we recommend CorpNet (there are fees for their service).

Alternatively visit the Pennsylvania Department of State website.

Other Pennsylvania resources for S Corporation:

Secretary of State Business Name Search: Search for the availability of your corporate name here.
File your “Name Reservation Form” here.
File your “Articles of Incorporation” here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your corporation here.here.

IRS S corporations: Specific instructions for your tax requirements as an S corp.

Pennsylvania Department of Revenue: Register here to fulfill business tax requirements.

C Corporation
A C corporation (or C corp for short), refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. There is no limit to the number of shareholders a C corporation can have. It is the most common type of corporation in the U.S.

Steps to starting C Corporation in Pennsylvania:

  • Step 1 — Choose a corporate name.
  • Step 2 — File a Certificate of Formation with the County Probate Court.
  • Step 3 — Appoint a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with other tax and regulatory requirements.
  • Step 10 — Register foreign corporations doing business in Pennsylvania.

For help forming your C corporation in Pennsylvania we recommend CorpNet (they have fees for their service).

Or, visit the Pennsylvania Department of State website.

Other Pennsylvania resources for C Corporation:

Secretary of State Business Name Search: Search for the availability of your corporate name here.
File your “Name Reservation Form” here.
File your “Articles of Incorporation” here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your corporation here.

Pennsylvania Department of Revenue: Register here to fulfill business tax requirements.

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Why choose Pennsylvania for my business?

  • 1

    Inc.com: "The 24 Best Colleges for Budding Entrepreneurs" (2015)
    Temple University in Philadelphia, Pennsylvania ranks #11. “The Fox School of Business and Management’s Innovation and Entrepreneurship Institute allows students of all disciplines to infuse entrepreneurship classes into their studies. Even students who don't choose to major or minor in the subject can complete a certificate of entrepreneurship, where they learn the basic skills for becoming a self-starter, no matter their academic background.”

  • 2

    Pennsylvania Business Incentives, Credits, and Programs
    “Pennsylvania offers a variety of tax incentives, credits and programs to eligible Pennsylvania residents and businesses. These tax credits, economic development programs refund/rebate opportunities and incentive programs provide economic assistance and tax reductions to individual and business taxpayers.”

  • 3

    Pennsylvania Partnerships for Regional Economic Performance
    “The mission of the Department of Community and Economic Development is to foster opportunities for businesses to grow and for communities to succeed and thrive in a global economy.”

  • 4

    Pennsylvania Small Business Development Center -- Resources for Women-Owned Businesses
    “The Pennsylvania Small Business Development Centers provide services to all small business populations and make special efforts to reach members of historically underrepresented and underserved populations, including women. In fact, women-and jointly-owned businesses consistently represent over half of our client base.”

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