Starting Your Business in Pennsylvania | A Step-by-Step Guide

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Start a Business in Pennsylvania

If you want to start an LLC in Pennsylvania, there are numerous factors to consider. Starting your own business is one of the most exciting and profitable things you can do in Pennsylvania. But where do you start? Follow our comprehensive guide on How to Start a Business in Pennsylvania. We will assist you in removing doubt from the process and investigate your success chances. It will begin with defining your business idea and progress to establishing, launching, and expanding your business. Webinarcare Editorial Team will help you every step of the way!

How to Start a Business in Pennsylvania

What Business to Start in Pennsylvania?

If you’re looking to start a business in Pennsylvania, consider starting a limited liability company (LLC). LLCs offer personal liability protection for their owners while also providing the flexibility of a partnership or sole proprietorship. Beyond that, here is the list of businesses to consider in Pennsylvania.

  1. Clothing Boutique
  2. Towing Company
  3. Convenience Store
  4. Health care Business
  5. Internet Service Provider

Whatever business you choose to start, it’s important to conduct thorough market research and create a solid business plan before diving in. We reviewed some of the Best LLC Services and provided features as an add-on with their packages for you to check out.

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Starting a business can be a challenging but highly rewarding endeavor. By taking the time to research and plan, you can increase your chances of success. Whether you choose to form a corporation or start an LLC in Pennsylvania, it’s important to surround yourself with a strong team that will guide you. Don’t let fear hold you back, take that first step towards turning your business dreams into a reality.

– WEBINARCARE EDITORIAL TEAM

How to Start a Business in Pennsylvania?

To form a business in Pennsylvania, you must follow a few steps that include creating a business plan, choosing a business entity type, determining your business costs, naming your business, registering a business, and lastly, marketing your business.

Please continue reading to learn more about the overall procedure and what new small business owners should keep in mind as they complete each step.

Step 1: Creating a Business Plan

When developing a business plan, many factors should be considered during the decision-making process. Your business plan in Pennsylvania serves as a road map for your company’s success.

A business plan should take into account the specific goals of your company. You should know the product or service you will provide in Pennsylvania. A well-thought-out business plan is essential for determining how your company will make a profit. If the purpose of the business plan is ambiguous and unrelated to the service you provide, it will impact the business you are forming. Make sure your business goals are SMART (specific, measurable, achievable, realistic, and time-bound). Also, researching your competitors’ services will help you determine your strategy for your state business. Finally, you should consider your company’s funding.

With this article’s assistance, you can better comprehend your business’s essential components and success strategy. You can apply for Pennsylvania Small Business Loans from banks and investor funding to help support your company in Pennsylvania.

Once you have the entire plan in your hands, you can work on the legal framework of your company. Legally, you can form an LLC for your ideal business.

Step 2: Choose a Business Entity in Pennsylvania

Selecting a business entity for your Pennsylvania company. When starting your own business, you must choose a business structure. How well your personal assets are secured, how much tax you pay, and how much paperwork you have to deal with will all be significantly impacted by the type of corporate entity you choose. Consider setting up a corporation, LLC, LLP, or sole proprietorship as your business entity in Pennsylvania.

Sole Proprietorships

Consider a sole proprietorship if you want to start a business in Pennsylvania by yourself. A sole proprietorship is the simplest business structure in which a single individual owns and operates the entire business. The owner and the business are considered the same legal entity in a sole proprietorship. There is no legal distinction between the owner and the business, meaning that the owner has complete control over the business operations, profits, and losses.

Sole proprietorships are best suited for Pennsylvania small businesses with low risks and for individuals who want to maintain complete control over their business without the complexities of establishing a separate legal entity.

Limited Liability Company

A Limited Liability Company (LLC) is a business structure that combines features of both partnerships and corporations, offering limited liability protection to its owners (called members) while allowing flexibility in management and taxation. An LLC is a separate legal entity from its owners, meaning the members are not personally liable for the business’s debts, obligations, or liabilities.

It is a popular choice for small to medium-sized businesses that want the liability protection of a corporation while maintaining management flexibility and simpler tax treatment. It’s essential to consult with a legal or financial professional to determine if an LLC is the best choice for your specific business situation.

Limited Liability Partnership

A limited liability partnership (LLP) is comparable to an LLC. However, it is usually used by licensed business professionals like attorneys or accountants. A partnership agreement is necessary for this kind of business entity. You can form an LLP in Pennsylvania if you are planning to.

Corporation

Forming a Corporation in Pennsylvania reduces your personal liability for business debts as an LLC does. A corporation is a legal entity that is separate and distinct from its owners, known as shareholders. It is created under the laws of the state it is incorporated in and is considered a separate “person” under the law. The corporation can enter into contracts, own property, sue and be sued, and pay taxes separately from its owners.

A corporation can be taxed as an S-corporation (S-Corp) or a C-corporation (C-Corp). If a small corporation satisfies certain Internal Revenue Service (IRS) standards, then S-corporation status is available, providing pass-through taxation. However, most larger businesses and startups seeking venture financing are taxed as C-corps.

To choose the right business structure in Pennsylvania, consider personal liability protection, taxation, management flexibility, administrative requirements, and setup costs. Consult a legal or financial professional to help you make the best decision.

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Step 3: Determine your Pennsylvania Business Cost

In Pennsylvania, you should determine the cost of your business. You should consider paying the Certificate of Organization fee, business licenses fee, office supplies and equipment, payroll, rent, utilities, transportation, and taxes.

Usually, filing an initial Pennsylvania Certificate of Organization fee costs $125, while the LLC annual fee costs $70 in Pennsylvania. In terms of filing Pennsylvania Articles of Incorporation, the costs usually range up to $125 for online and by mail filing.

If forming an LLC is your ideal business, consider knowing the LLC Cost in Pennsylvania.

Step 4: Name your Business in Pennsylvania

Naming your business doesn’t take a lot of time. With the help of Pennsylvania Business Name Search, you can acquire a name for your business. If you form an LLC in Pennsylvania, you must follow the below rules while naming your business-

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In Pennsylvania, if you do not wish to file your business right away but want to hold the name that you have decided on, then you can reserve your business name. You must file a name reservation application in the Pennsylvania Secretary of State to keep the name.

If the business name is available, you may choose to reserve it for a specific period of 120 days. The online name reservation fee is $70 and the mail name reservation fee is $70. If your business plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done in two methods, by mail and in person, which you can file in Pennsylvania Secretary of State. You can check out how to file a DBA in Pennsylvania for clearer understanding.

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Step 5: Register Pennsylvania Business

To register a business in Pennsylvania, you need to file it with the Pennsylvania Secretary of State. Before that, you must have a Pennsylvania Registered Agent for your business. The Registered Agent is a person who is responsible for receiving important legal documents on your behalf.

You can serve as your own Registered Agent, or you can appoint a friend or family member, or you can check the Best Registered Agent Services in Pennsylvania.

Apply For Certificate of Organization

After you have a Registered Agent, you need to file the Pennsylvania Certificate of Organization, if you want to have an LLC structure, or you need to file the Pennsylvania Articles of Incorporation if you want to have a Corporation.

Request For an EIN

In addition to the paperwork, your Registered Agent should apply for an Employer Identification Number (EIN) in Pennsylvania. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website. You can obtain the EIN for free from the IRS.

The application of an EIN in Pennsylvania can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone (for International Applicants)– International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in several ways. It will give your LLC the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Step 6: Apply for Business License and Permit

Business licenses and operating permits are necessary to run any business in Pennsylvania. Before launching your new business, request any required business license or permission. Most Pennsylvania businesses need licenses or permits to operate. Federal, state, and local governments may all require businesses to have licenses and permits. The business license fee depends on the type of license you are applying for. It can start from $25 till going up to $100+. However, in Pennsylvania, the business license fee ranges from $50 – $300.

Step 7: Obtain a Bank Account

Your business dealings in Pennsylvania might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Opening a separate bank account for your Pennsylvania business is essential for maintaining a clear separation between your personal and business finances.

You can check out the Best Banks in Pennsylvania, which offers the best fees, services, and convenience for your business needs.

Step 8: Market your Business in Pennsylvania

Now that your Pennsylvania business is registered, you can market it with an ideal marketing plan. An ideal marketing plan can help a start-up business to become known. Making a comprehensive social media network like META, Facebook, Instagram, Twitter, and YouTube falls within this category. While creating an SEO campaign for your company website, you may also look at specialized communities on Facebook and LinkedIn.

FAQs

What is the first step to starting a business in Pennsylvania?
The first step to starting a business in PA is to choose a legal structure for your business.
What types of legal structures are available in Pennsylvania?
They are sole proprietorship, partnership, corporation, S corporation, limited liability partnership (LLP), and limited liability company (LLC).
What do I need to do to register my business in Pennsylvania?
You need to register with the Pennsylvania Department of State by filing the appropriate paperwork and paying a fee.
How much does it cost to register a business in Pennsylvania?
The cost of registering your business depends on the type of business structure you choose, but generally ranges from $125 to $225.
Do I need to obtain any special licenses or permits to start a business in Pennsylvania?
Some businesses may require specific licenses and permits to be legally operated in Pennsylvania. Contact the Department of State for more information.
What taxes do I need to pay as a business owner in Pennsylvania?
Business owners in Pennsylvania are required to pay state income tax, sales tax, property tax, and others if applicable.
What is the sales tax rate for goods sold in Pennsylvania?
The sales tax rate for goods sold in Pennsylvania is 6%.
Can I register my business in Pennsylvania as a foreign entity?
Yes, foreign businesses can register to do business in Pennsylvania as a foreign entity with the PA Department of State.
How long does it take to register a business in Pennsylvania?
The time to register a business in Pennsylvania can vary depending on the type of business and how complete the filing package is. It typically takes 5-10 business days.
What is the minimum wage in Pennsylvania?
As of July 2021, the minimum wage in Pennsylvania is $7.25.
Is there a “right-to-work” law in Pennsylvania?
No, Pennsylvania does not have a “right-to-work” law.
Can I hire minors to work in my business in Pennsylvania?
Yes, minors can work under certain restrictions in Pennsylvania. Check state labor guidelines for more information.
Can I trademark my company name in Pennsylvania?
Yes, you can trademark your company name in Pennsylvania and apply for federal registration of that trademark.
Where can I find resources for starting a business in Pennsylvania?
The Pennsylvania Small Business Development Centers or Small Business Administration are good resources for starting a business in PA.
How do I get a business loan for my Pennsylvania-based business?
You can get a business loan through several private sector lenders or community banks in Pennsylvania, including state initiatives like PIDA and CWCA.
Is Pennsylvania a business-friendly state?
Pennsylvania is generally considered a business-friendly state due to low business taxes, strategic location, talented workforce, financing, and advanced infrastructure.
Can I run a home-based business in Pennsylvania?
Yes, you can run a home-based business in Pennsylvania if it adheres to the zoning regulations in your municipality.
What is the Keystone Innovation Zone and am I eligible?
The Keystone Innovation Zone offers operating cash flow to technology-focused startups in certain targeted areas like college town communities. You are eligible to apply if you meet target business criteria established.
What business incentives are available for Pennsylvania-based startups?
Pennsylvania offers various business incentives such as Keystone Innovation Zones, Enhanced Research and Development Tax Credit, and technological development fund along with other federal programs.
What is the difference between registering with the Pennsylvania Department of State and filing for federal incorporation?
Registering with the Pennsylvania Department of State allows you to start operating legally in PA while incorporating as an S-corp, C-corp or LLC entity on the federal level gives you some other benefits like forming a board of directors, shareholders, and follows tax advantages under IRS rules.
How do I hire employees for my business in Pennsylvania?
There are specific state and federal guidelines you must follow when hiring employees in PA, including payroll tax, labor practices, and internship and benefit packages.
Can I apply for a business grant in Pennsylvania?
Yes, there are periodic government grants available for businesses in PA. You can find up-to-date information on the Pennsylvania Business Grants and Funding Finder at respond.pa.gov.
What resources are available to women and minority entrepreneurs looking to start a business in Pennsylvania?
The PA’s Bruggers Minority Business Development Program and Women’s Partnership offer various business coaching, job training services, and specialized resources for minorities and women, respectively.
Do I need to pay unemployment compensation tax in Pennsylvania?
Pennsylvania requires all employers to pay unemployment compensation taxes to fund benefits paid to employees who are laid off by their employer within the state.
What resources are available in Pennsylvania for importing and exporting goods?
Both the Department of Community and Economic Development and the Pittsburgh Office of Export Assistance provides technical assistance, customs affairs counseling as well international trade finance services to entrepreneurs looking to expand into the global market.
Do I need a registered agent for my Pennsylvania-based company?
Pennsylvania requires legalized paperwork from federal incorporation and the services process at this stage, meanwhile, entity registration requires listing an agent and an address of availability for certain notices required to be sent to the company.
Can I make my Secretary of State filings by fax or email in Pennsylvania?
No, filings cannot be sent by fax or email in Pennsylvania, but can be conducted through postal or online filer agent as authorized by the state.
What appears on the Agency Verification Webpage on the Pennsylvania Department of State website?
The Agency Verification webpage shows the status of notary services, selected administrative agencies and individual businesses that have filed with the state of Pennsylvania.
Is medical and voluntary health prescreening required for back-to-work employers in Pennsylvania?
Hospitals does not need Pennsylvania partners. However businesses are highly encouraged to perform health screening and follow enforced requirements, such as wearing masks or other protective devices or maintaining social distance within recommended protocols established from CDC’s turn-to-work guidelines.
What kind of overall economic and demographic factors should I be aware of when starting a business in Pennsylvania?
Pennsylvania’s economy is diverse, with significant industries like agriculture, healthcare, technology, and energy. Median household income is below the national average, and the population is aging.
Do I need to register my business with the state of Pennsylvania?
Yes, you will need to file registration paperwork with the Pennsylvania Department of State.
What are some common legal structures for a business in Pennsylvania?
Some options include sole proprietorship, partnership, limited liability company (LLC), corporation, and S corporation.
How do I make sure my business name is available in Pennsylvania?
You can search the Pennsylvania Business Name Availability Database through the Department of State’s website.
What are some of the common licensing requirements for starting a business in Pennsylvania?
Licensing requirements depend on the nature of your business. For example, a restaurant will need a food service license, and a construction company might need to obtain a contractor’s license.
Does Pennsylvania have any specific tax laws that I should know about as a small business owner?
Yes, Pennsylvania has its own set of tax laws, including a state income tax, sales tax, and more. You should speak with a tax professional about compliance.
What are some helpful business resources in Pennsylvania?
Check out resources from the Pennsylvania Department of Community and Economic Development and the Small Business Development Center Network.
Can I form an LLC in Pennsylvania?
Yes, forming an LLC in Pennsylvania is straightforward.
Are there any state-specific employee regulations in Pennsylvania?
Yes, Pennsylvania has strict rules around minimum wage, child labor, and workplace safety.
Can I register my business online in Pennsylvania?
Yes, the Pennsylvania Department of State allows for online business registration.
Is it expensive to start a business in Pennsylvania?
Costs depend on the type of business you are starting, but it’s generally comparable to other states.
What types of insurance do businesses in Pennsylvania usually carry?
Common types of insurance include general liability, property, and worker’s compensation.
Do I need a business plan to start a business in Pennsylvania?
It’s always a good idea to have a formal business plan, especially if you plan on seeking funding.
What’s the difference between a corporation and an LLC in Pennsylvania?
Corporations offer more uniformity in management and shareholding, while LLCs allow for more flexibility in how they are structured.
Are there any grants or funding opportunities for small businesses in Pennsylvania?
Yes, there are a number of grant and funding programs specific to Pennsylvania, including the BEN Franklin Technology Development Authority and the PA Small Business Development Centers.
What are the steps I need to take to register my business in Pennsylvania?
Steps include choosing a business structure, registering with the Department of State, obtaining any necessary licenses or permits, and registering for taxes.
Can I sell goods online from Pennsylvania?
Yes, there are no limitations on where you can sell goods from within Pennsylvania.
Are there any environmental regulations I need to be aware of when starting a business in Pennsylvania?
Yes, there are a number of state and federal regulations related to air, waste, water pollution, and more.
How can I get a Pennsylvania tax ID number?
You will need to register with the Pennsylvania Department of Revenue to obtain a tax ID number.
Are there any mentoring or consulting programs available for Pennsylvania small business owners?
Yes, the SCORE Association and the Small Business Development Center Network offer free support to entrepreneurs in Pennsylvania.
What’s the first step to starting a business in Pennsylvania?
Research your business idea thoroughly and create a formal business plan before taking any additional steps.
What’s the average processing time for a business registration in Pennsylvania?
Processing time can vary, but expect it to take several days to several weeks.
Can I operate my business from home in Pennsylvania?
Yes, Pennsylvania allows for businesses to be operated from home so long as you comply with any local zoning laws.
Do I need to obtain a Federal Employer Identification Number (EIN) in Pennsylvania?
You will need an EIN if you are planning to hire employees or file business taxes in Pennsylvania.
What are some common mistakes that I should avoid when starting a business in Pennsylvania?
Mistakes include not conducting thorough research, underestimating costs, and failing to obtain the proper licenses.
How can I locate a business attorney in Pennsylvania?
Consult with your local bar association or utilize online directories to find qualified attorneys in Pennsylvania.
What paperwork do I need to register my business with the state of Pennsylvania?
You will need to file articles of incorporation, articles of organization, or a certificate of registration, depending on your business structure.

Also Read

Why You Should Start Business in Pennsylvania

One of the main advantages of starting a business in Pennsylvania is its central location on the East Coast of the United States. Situated between New York City and Washington D.C., Pennsylvania offers easy access to major markets and transportation hubs. This makes it an ideal location for businesses looking to expand their reach and attract customers from all over the country.

In addition to its prime location, Pennsylvania boasts a diverse economy that provides ample opportunities for businesses of all sizes and industries. From agriculture to technology, healthcare to manufacturing, there is a wide range of sectors thriving in the state. This diversity not only offers a solid customer base but also provides opportunities for collaboration and innovation across industries.

Furthermore, Pennsylvania has a skilled workforce that is second to none. With top-tier universities and vocational schools located throughout the state, businesses have access to a talented pool of workers with specialized skills and knowledge in a variety of fields. Whether you’re in need of engineers, marketers, or healthcare professionals, Pennsylvania’s workforce is equipped to help your business succeed.

Another key advantage of starting a business in Pennsylvania is its business-friendly environment. The state offers numerous incentives and programs designed to support entrepreneurs and small businesses. From low taxes to grants and loans, there are many resources available to help you get your business off the ground and grow successfully.

Moreover, Pennsylvania has a strong entrepreneurial ecosystem that fosters innovation and collaboration. With networking events, mentorship programs, and startup incubators located throughout the state, entrepreneurs have access to a supportive community that can help them navigate the challenges of starting a business.

Lastly, Pennsylvania’s rich history and vibrant culture add a unique charm to the state that can help businesses stand out from competitors. Whether you’re opening a store in Philadelphia, launching a tech startup in Pittsburgh, or setting up a manufacturing plant in the countryside, Pennsylvania offers a diverse range of settings that can appeal to different audiences and help you create a brand that resonates with customers.

In conclusion, Pennsylvania provides a favorable environment for starting and growing a business. With its strategic location, diverse economy, skilled workforce, business-friendly environment, and vibrant culture, the state offers numerous benefits that can help entrepreneurs succeed. If you’re considering launching a new business venture, Pennsylvania may just be the perfect place to turn your dreams into reality.

Conclusion

Starting a business in Pennsylvania has unique advantages and challenges since it offers a large and diverse market, access to skilled talent, and numerous networking opportunities, making it an attractive location for entrepreneurs. However, business owners must also contend with a high cost of living, intense competition, and potentially complex regulations.

Ultimately, whether starting a business in Pennsylvania is the right decision depends on the entrepreneur’s specific needs, goals, and industry. It is crucial to conduct thorough research and consider factors such as taxes, regulations, workforce availability, and target market when choosing a location for a new business. By carefully weighing the pros and cons, entrepreneurs can make informed decisions and set themselves up for success in the competitive Pennsylvania business landscape.

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