How to Incorporate in Pennsylvania (May 2024 Update)

Incorporating your business in Pennsylvania provides several key benefits, including personal asset protection, tax advantages, and credibility with customers. The process to set up a corporation may seem complex, but breaking it down step-by-step makes incorporating in Pennsylvania straightforward. This guide will walk you through everything you need to know, from choosing your business name all the way to filing annual reports. By the end, you’ll have all the information you need to legally form your Pennsylvania corporation.

Steps to Incorporate in Pennsylvania

1. Choose a Business Name

When incorporating in Pennsylvania, the first step is selecting an official name for your corporation. Choose a name that is:

• Unique and not already used by another business registered in Pennsylvania. You'll want it to stand out from other names.
• Memorable and relevant to your specific business. Pick something that reflects what your company does.
• Clear about your corporate structure. Include words like "corporation," "company," "incorporated" or "limited" in the name.
• An accurate representation of your business. Avoid suggesting you are a type of entity that you are not.

You can search the Pennsylvania Department of State database to see if your desired name is taken. If available, you can choose to reserve the name for up to 120 days for a $70 fee while you complete additional incorporation steps.

Registering a fictitious business name (DBA) allows your corporation to conduct business under a different name than its official legal name. Sole proprietors and partnerships have to publish DBA name registrations in a local newspaper, but corporations do not.

2. Appoint a Registered Agent

When incorporating in Pennsylvania, you must designate a registered agent and their address. This will serve as your corporation's official mailing address to receive crucial documents like tax forms, lawsuit notices, and other legal papers.

Your registered agent's address should:

• Be a physical street address located in Pennsylvania, not a P.O. Box.
• Have someone available to accept papers during normal business hours.

Rather than using your own home address, it is often better to pay a registered agent service to fill this role. Doing so keeps your personal residence address private. A third-party registered agent can take care of accepting important corporate mail on behalf of your business.

3. File Articles of Incorporation

To legally form your business, you must file Articles of Incorporation with the Pennsylvania Bureau of Corporations and Charitable Organizations. This document makes your corporation an official legal entity.

You'll need to include key details like your business name, registered agent information, stock details, and the incorporator's identity. Submit your Pennsylvania Articles of Incorporation by mail or electronically along with the $125 filing fee.

4. Publish Notice of Incorporation

After your Articles of Incorporation are approved, Pennsylvania requires publishing notice of your new corporation in two local newspapers - one must be a legal publication. This notice solidifies your business's standing and informs the public.

While publishing may cost around $200 total, it prevents future issues when demonstrating your proper incorporation status. Include a copy of newspaper affidavits along with your first corporate minutes and records.

5. Establish Bylaws and Corporate Records

Your corporation must record minutes of organizational meetings, share issuances, director elections, and other important events. These records document that you meet all legal requirements.

Bylaws provide a framework for company ownership, management, policies, and procedures. Even though Pennsylvania doesn't require bylaws, putting organizational rules in writing is recommended. Include provisions for meetings, stocks, finances, amendments, and more.

6. Hold an Organizational Meeting

Once incorporated, Pennsylvania requires you to hold an initial organizational meeting of directors or incorporators to address startup items like:

• Electing directors
• Adopting bylaws
• Appointing officers
• Issuing stock certificates

You must inform attendees of time/place 5+ days in advance. Keep detailed minutes of actions taken to begin your company's records.

7. Obtain an EIN

An Employer Identification Number acts like a social security number to identify your business for tax purposes. While having employees makes getting an EIN mandatory, most banks won't open a business account without one either.

Applying online for your EIN is free and only takes minutes. The IRS then immediately issues your EIN, which you'll need to provide when filing Pennsylvania corporate tax returns.

8. File PA Reports and Taxes

Pennsylvania corporations must submit a Corporate Tax Report each year - no separate annual report is required. Your report covers income, capital stock, and other taxes owed.

The state also requires corporations to pay an annual fee called the Decennial Report every ten years. This serves as periodic proof your corporation still actively exists. Remain in good standing by marking your calendar to ensure you file the Decennial Report on time.

Additional Steps to Form Your Pennsylvania Corporation

Opening a bank account

Keep your business finances separate from personal funds by opening a Pennsylvania corporate bank account. Bring your approved Articles of Incorporation, EIN, and corporate bylaws.

For more information, take a look at our article on the key benefits of business checking accounts.

Electing S corporation status

You can choose how the IRS taxes your business income. Filing Form 2553 elects S corporation status so company profits/losses pass through to your personal tax return. This avoids double taxation but has eligibility requirements.

Obtain business licenses

Don't forget to research if your corporation needs any Pennsylvania or local licenses, registrations, or permits to operate legally. Requirements vary by industry and location.

Conclusion

Following these essential steps allows you to incorporate your business in Pennsylvania smoothly. Forming a corporation has many advantages for limiting liability and improving operations. However, proper ongoing maintenance as a Pennsylvania corporation is crucial as well. This includes holding shareholder meetings, recording minutes, filing annual reports, and keeping state registrations current. Keep up with annual requirements and your corporation will remain in good standing for years to come.