A Pennsylvania LLC operating agreement can help you create your company’s governing procedures, establish policies for other members to follow, and handle legal challenges as they arise. This document can help you experience success in lawsuits and safeguard your assets if economic conditions become unstable.
You can meet with other company members to record the specific details of your operating agreement. Once everyone agrees on what to include in the document, they can sign it and keep a copy for their records.
Is an LLC Operating Agreement Required in Pennsylvania?
No, Pennsylvania doesn’t require LLCs to have an operating agreement.
However, you can still consider creating one, as it outlines a company’s management methods, goals, and procedures for profit distribution.
By Type
Laws
Pennsylvania provides thorough guidance on setting up an LLC. The state’s operating laws, as defined by Title 15, Chapter 88, offer detailed information on how to start, form, and identify your business as a limited liability corporation.
Furthermore, § 8815 provides the contents of an operating agreement. It touches on topics like:
- The scope of the operating agreement
- Limitations
- Permitted terms
- The determination of manifest unreasonableness
Costs and Fees
Explore some of the costs and fees that come with owning and operating an LLC:
- Domestic filing fee: $125
- Foreign filing fee: $250
- Name reservation fee: $70
- Decennial renewal report: $70
How to Form an LLC in Pennsylvania
Follow the below steps to form an LLC in Pennsylvania:
Step 1 – Choose a Company Name
Your LLC entity will need a name. However, before you use specific words or phrases to identify your operation, you need to perform a name search on the State of Pennsylvania’s website. This research will confirm that you’ve chosen a unique name that no other company currently uses.
Before choosing an LLC name, keep in mind the following requirements Pennsylvania law dictates:
- Include “LLC” in your name. According to Pennsylvania state guidelines, a limited liability company or its abbreviation must appear in your company name (LLC or L.L.C.).
- Don’t mimic the government. Names such as FBI, Treasury, State Department, and others may cause confusion between your LLC and a government agency. Don’t use any name that sounds like a federal, state, or local organization.
- Consider additional legal ramifications. You may need additional paperwork and a licensed individual to be part of your company if you provide specialized services.
Step 2 – Seek a Registered Office
LLCs must have a registered office, which some states call a registered agent. A registered office will receive all legal correspondence on your LLC’s behalf.
A registered office can be a Pennsylvania resident or a business legally operating in the state. Whichever registered office you choose must have a physical address within the state. If you don’t want to seek a registered office alone, you can hire one through a registered agent service.
Step 3 – File a Certificate of Organization
The certificate of organization establishes official authority for your company to operate as an LLC in Pennsylvania. You need the following information for your application:
- Your official name and primary place of business
- A physical business address (not a P.O. Box)
- Names of your LLC members
- Organizer signature
- Effective LLC formation date
- The primary industry in which your company will conduct business
You can file online on the state’s website. Otherwise, you can contact the Department of State to confirm where to mail in a copy of your certificate of organization.
Step 4 – Fill Out an Operating Agreement
While an operating agreement is optional for an LLC in Pennsylvania, it can help you classify your company’s operating procedures and ownership guidelines. If you write one, ensure you account for your company’s and owners’ specific needs and preferences.
Step 5 – Get an EIN
An Employee Identification Number (EIN) can help you open a business bank account and file your tax returns following state law. If you have at least one employee, this nine-digit number will allow you to accurately set up your payroll system. You can apply for an EIN through the IRS free of charge.
Step 6 – Keep Current With Your Reporting
While most states require LLCs to submit annual reports, Pennsylvania only requires LLCs to submit an updated company report every ten years. Ensure you fill out the decennial info with the most updated business information.
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