How much does an LLC cost in Pennsylvania? (details)
Forming a Pennsylvania LLC entails more than just paying the first filing fee; it doesn't have to be extremely expensive.
We outline all up-front and continuing costs for a Pennsylvania LLC and advise how to successfully cut these out of the budget.
How Much Does It Cost to Start an LLC in Pennsylvania?
There is a $125 filing fee for the Certificate of Organization with the Secretary of State when forming an LLC in Pennsylvania.
This is important in creating your LLC's legal standing, allowing it to function under Pennsylvania regulations if approved.
Apart from the LLC filing fee mentioned above, additional expenses are associated with establishing a Pennsylvania LLC (Limited Liability Company).
Costs of Forming a Pennsylvania LLC
Forming an LLC includes a one-time state filing fee of $125.
There are also ongoing fees (like a $7 Annual Report fee and potential business license fees), which we discuss below.
LLC Costs in Pennsylvania
| Requirement | Cost |
|---|---|
| LLC Name | $0 |
| Registered Agent | $0 or $125 per year |
| Certificate of Organization | $125 |
| Operating Agreement | $0 (free on our site) |
| EIN Number | $0 (free to the IRS) |
| Annual Report | $7 |
| Taxes | varies (filed and/or paid every year) |
The filing fee for a Pennsylvania LLC Certificate of Organization is $125
In Pennsylvania, forming an LLC requires paying the Secretary of State a $125 filing fee for the Certificate of Organization. This paper creates your LLC legally if it is accepted.
After formation, you only need to pay the $125 one-time charge; after that, you won't need to pay any more monthly or yearly fees to keep your Pennsylvania LLC active.
✎ Note:
LLCs represent the predominant business structure in Pennsylvania, chosen for their robust liability protection afforded to owners, making them highly favored among business entities.
The form used to establish an LLC can vary by state; it may be called the Certificate of Organization.
In Pennsylvania, it is specifically known as the Certificate of Organization. Despite these variations in naming, they all serve the same purpose to create your LLC legally.
Reserving a business name in Pennsylvania entails a fee of $0
The creation of your Pennsylvania LLC Name Reservation is completed simultaneously if you want to file online. An additional $0 filing fee is required for an online name reservation when filing online.
Remember to include the Name Reservation with your application if you want to file by mail.
But before forming your LLC, you have to wait for the Name Reservation to be approved. Even though filing by mail can save you a few bucks, it can take longer to form your LLC.
How much does a DBA cost? ($70)
In Pennsylvania, a DBA is filed with the town clerk rather than the Secretary of State. Therefore, the cost of a DBA will vary depending on the town where your LLC is doing business.
✎ Note:
A DBA, also known as a Trade Name, Fictitious Name, Assumed Name, or Fictitious Business Name, refers to the same concept.
★ Tip:
Obtaining a DBA for your LLC is optional and not a requirement.
Pennsylvania Registered Agent Fee ($0 to $125/ annually)
Under Pennsylvania law, every LLC formation requires the appointment of a Registered Agent.
Your Pennsylvania Registered Agent acts as the liaison for legal documents and state notifications on behalf of your LLC, necessitating a physical address within the state and availability during regular business hours.
You can appoint yourself, a trusted associate, or a family member as your Registered Agent without incurring additional expenses.
Alternatively, hiring a Registered Agent service costs between $100 and $300 per year. These services offer additional business support and safeguard your privacy.
Hiring a Registered Agent service is a good idea if:
- You lack a physical address in the state (Pennsylvania law mandates Registered Agents to have an address within the state).
- You prefer to keep your address private (some companies allow you to use their address for confidentiality).
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LLC Operating Agreement Fee ($0)
A Pennsylvania LLC Operating Agreement functions as a written contract among the LLC's members. It outlines specific details regarding ownership, how the LLC is managed, and the distribution of profits.
Both Single-Member and Multi-Member LLCs should create an Operating Agreement, maintain it within their business records, and provide each member with a copy.
Online services generally charge between $50 to $200 for crafting an LLC Operating Agreement.
LLC EIN Number Fee ($0)
An EIN, also referred to as an Employer Identification Number or FEIN (Federal Employer Identification Number), is essential for handling tax filings, setting up an LLC bank account, and potentially facilitating employee hiring.
While some platforms may charge a fee, you can obtain an EIN for your LLC free of charge directly from the IRS. The process to apply online is simple and typically takes only a few minutes to complete.
Pennsylvania LLC Annual Report Fee ($7/year)
In Pennsylvania, the LLC Annual Report is referred to as the Periodic Report.
The state requires you to keep your LLC's information up to date by filing a Pennsylvania Periodic Report annually.
This keeps your LLC in good standing and compliance with state law so it can continue operating. You simply confirm the information on your Periodic Report, file it with the Pennsylvania Secretary of State, and pay the Periodic Report filing fee.
The Pennsylvania LLC Periodic Report is free annually. These costs are required each year for the duration of your LLC's existence.
✎ Note:
Other business entities may file different reports, but LLCs only need to file the Periodic Report each year.
Pennsylvania Business License and Permit Fees
The locations and industry sectors in which your LLC operates in Pennsylvania may require you to apply for additional business licenses or permits. For your LLC's specific operating area, for example, it may be necessary to obtain a city business permit.
Location and industry specifics can affect the cost of these licenses or permits. These costs are usually fair. Local governments such as towns, cities, or counties are responsible for administering some licenses and permits, while the state issues others.
LLC Taxes
Pennsylvania LLC owners face a range of tax obligations, leading to varying annual costs.
Some of the taxes LLC owners pay include:
- Federal taxes
- State income tax
- Local income tax
- Business taxes
- Self-employment taxes
- Sales and use tax
- Payroll tax (if you have employees)
- Property tax (if the LLC owns property)
The Taxes of Your Pennsylvania LLC taxes are affected by your industry and business activities, making it difficult to predict. Every business is different, and the taxes your LLC owes depend on your specific situation.
✎ Note:
Typically, a Single-Member LLC is taxed similarly to a Sole Proprietorship, while a Multi-Member LLC is taxed similarly to a Partnership.
Hiring an Accountant
Accounting fees can vary, but in general, expect to pay about $300 a year for basic tax returns and up to $900 for more comprehensive filings.
The best person to help you determine your small business tax liability in Pennsylvania is a certified accountant.
While accounting costs can vary, you should generally budget $300 for simple tax returns and up to $900 for more complicated filings annually.
Need to save time?
Consider hiring a professional to set up your LLC: Northwest Registered Agent offers LLC formation services starting at $39 plus the state fee.
(Find out why Northwest is the top choice for LLC formation)
✎ Note:
Accounting fees can vary, but in general, expect to pay about $300 a year for basic tax returns and up to $900 for more comprehensive filings. We recommend speaking with a few Pennsylvania accountants to make sure they can help you with all of your local, state, and federal tax needs. For more advice, see our comprehensive guide on how to find an accountant.
Pennsylvania Secretary of State
If you're curious about the expenses involved in starting a Pennsylvania LLC, feel free to contact the Pennsylvania Secretary of State for detailed information.
Pennsylvania LLC Costs FAQs
How much does it cost to open an LLC in Pennsylvania?
It costs $125 to start a Pennsylvania LLC. This is a one-time filing fee for the LLC Certificate of Organization.
Some LLCs may need a business license in Pennsylvania, depending on your industry and location. The cost of local business permits varies. Additionally, depending on your company's activities, your LLC may need to obtain business insurance.
How much does an LLC in Pennsylvania cost per year?
All Pennsylvania LLCs need to pay $7 per year for the Annual Report. These state fees are paid to the Department of State and are required to keep your LLC in good standing.
If you hire a Registered Agent service, the annual subscription fee is usually about $125 per year.
Some LLCs may need business licenses in Pennsylvania, depending on your industry and location. Check with your municipality for any annual renewal fees for business permits. Additionally, your LLC will need to file and/or pay taxes every year.
Should I hire an LLC formation service?
You are not required to hire a professional service company to form your Pennsylvania LLC. You can handle the LLC formation process on your own if you prefer.
Do I need to hire an attorney to form an LLC?
No, hiring an attorney is not required to form an LLC in Pennsylvania. You can complete the LLC formation process yourself.
However, if your LLC has a complex ownership or management structure, involves investors, or requires industry-specific documentation, consulting a business attorney may be beneficial. Attorneys typically charge between $800 and $2,500 for this service.
How do I start an LLC in Pennsylvania?
Here are the steps to starting an LLC in Pennsylvania:
- Choose an LLC business name and ensure it’s available.
- Select a Pennsylvania Registered Office.
- File the Pennsylvania Certificate of Organization.
- Complete and sign an Operating Agreement.
- Obtain a Tax ID Number (EIN) from the IRS.
- Open an LLC bank account.
- Check if you need a business or sales tax license in Pennsylvania.
What’s the cheapest way to start an LLC?
You can start an LLC cheaply by filing your formation documents yourself. You can also save money by being your own Registered Office and using a free LLC Operating Agreement template.
By handling the formation yourself, acting as your Registered Agent, and using a free Operating Agreement template, you can save over $400.
How long does it take to get an LLC in Pennsylvania?
The time to get an LLC in Pennsylvania depends on how you file your Certificate of Organization. Online filings are typically approved in 5-7 days, while mail filings take about 5-7 days plus mailing time.
How much does a Pennsylvania business bank account cost?
The cost of a business bank account varies. Some banks charge monthly fees ($10 to $20), which may be waived by meeting certain requirements, such as maintaining a minimum balance or making a specified number of direct deposits.
It’s also possible to find banks that do not charge monthly fees. Before opening your LLC business bank account, inquire about options to avoid maintenance fees.
How much is a Foreign LLC in Pennsylvania?
A Foreign LLC, which is an LLC formed in another state and doing business in Pennsylvania, costs $250 to file the foreign registration statement. This is the fee to register an LLC in Pennsylvania after it was formed in another state.
If you form an LLC in Pennsylvania, it is considered a “Domestic LLC.” An LLC formed in another state and registered in Pennsylvania is called a “Foreign LLC.”
Is Pennsylvania a good state for an LLC?
Yes, Pennsylvania is a great state to start a business. Pennsylvania doesn’t charge a state business license fee, has quick approval times, and helpful representatives at the Department of State if you have questions.
The most important factors in deciding where to start a business are your residence and where you conduct business. If you live in or do business in Pennsylvania, it is generally best to form your LLC there. Forming an LLC in another state, such as Wyoming, while residing and operating in Pennsylvania could lead to additional fees and complications.
In summary, if you are a Pennsylvania resident, it is usually best to form your LLC in Pennsylvania. If you don’t live in or do business in Pennsylvania, it may not be the most advantageous state for your LLC.