How to start a business in Pennsylvania

Rebecca Neubauer

BLUEPRINT

Published 1:51 a.m. UTC Nov. 2, 2023

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Starting a business in Pennsylvania can be an exciting and rewarding endeavor. By taking a systematic approach to starting your business, you’ll be well-prepared to navigate the challenges and opportunities that come your way.

There are seven steps to starting a business in Pennsylvania:

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7 steps to register your business in Pennsylvania

1. Start with a business plan

A business plan is a crucial foundation for your business that outlines your goals and the strategies to achieve them. Pennsylvania provides a business plan template to assist new business owners in this step of starting a business.

Funding your business is an essential aspect of the planning process. Estimate your startup costs and identify potential sources of financing, such as personal savings, loans or grants. Look at Pennsylvania’s state funding options to see if they are a viable source of capital for your new business.

Market research is critical for understanding your target audience, competitors and market conditions. This knowledge will help you make informed decisions when developing your products or services, setting prices and choosing marketing strategies. The Small Business Administration offers a list of resources you can use to do market research.

Additionally, explore business software and tools tailored to your needs, such as:

2. Select a business entity

Before starting your business in Pennsylvania, one crucial step is selecting the correct business entity for your needs. This state has four main types of business structures: sole proprietorships, partnerships (general or limited), limited liability companies (LLCs) and corporations.

	EASE OF SET-UP	MANAGEMENT FLEXIBILITY	LIABILITY PROTECTION	TAXATION
Sole proprietorship	Easy	High	None	Personal
Partnership	Moderate	Moderate	General: None Limited: Some	* General: Self-employment Limited: Personal
LLC	Moderate	High	Moderate to high	Self-employment
Corporation	Complex	Low	High	C corp: corporate double taxation S corp: personal

A sole proprietorship is the most straightforward business structure to start. This might be the right option if you’re going for a small-scale business and prefer simplicity. However, it brings full personal liability since there is no legal separation between you and the business.

A partnership allows two or more individuals to share ownership of a business. There are two types: general and limited partnerships. While a general partnership involves equal liability for all partners, a limited partnership has general partners who manage the business and limited partners with limited liability protection.

LLCs blend the benefits of sole proprietorship or partnership in terms of management with the liability protection of a corporation. LLCs offer flexibility in their operation and taxation and provide personal asset protection.

Finally, corporations are separate legal entities from their owners and are owned by shareholders that enjoy maximum liability protection. Corporations require more management formalities and operate under strict guidelines, but they are suitable for larger businesses that need ample funding options.

3. Choose a business name

When starting a business in Pennsylvania, you must decide on a suitable business name. It should not be registered to another business in the state and clearly communicate your company’s services. You can search for existing names on the Pennsylvania Department of State’s (DOS) free business search to ensure you are not selecting a name that another business has already registered.

If you are not ready to register your business entity, you can reserve your name for 120 on the Pennsylvania business filing services website for a filing fee of $70.

For information on how to ensure your name is marketable, unique and not protected from national infringement, read our business naming guide.

4. Register your business entity

Once you’ve chosen a name, it’s time to register your business entity. Different legal business structures exist, like sole proprietorship, partnership, LLC or corporation. Keep in mind that this step does not apply to sole proprietorships but may apply to partnerships.

To fill out these forms, for all business types except sole proprietorship, it is important to choose a registered agent. A registered agent is an individual or company located in Pennsylvania that will receive legal documents on behalf of your business. Explore the top registered agent services to find the perfect fit for your needs.

You can submit your registration filings on the Pennsylvania DOS website. For example, for an LLC, you should file a certificate of organization form (often known as an articles of organization form) and for a corporation, you should file an articles of incorporation form. The business registration fee is around $125 for domestic businesses and can be paid on the website when you file.

5. Apply for an EIN

An employer identification number (EIN) is a unique federal identifier for your business. The IRS uses it for tax purposes. It is also used to apply for business licenses, open a bank account, engage investors, hire employees and seek business funding through grants or loans.

You can obtain an EIN for free by applying online on the IRS website between Monday and Friday, 7 a.m. to 10 p.m. EST. Your EIN will be automatically generated once you submit the form and made available to you on the submission confirmation page.

6. Apply for required licenses and permits

Your business might need federal, state or local licenses or permits to operate legally, depending on the type of business you are opening. These may include occupational, zoning or environmental permits. Visit Pennsylvania’s special registrations page to learn which professional or occupational licenses or permits may apply to your business.

For local permits, you can search your business address on Pennsylvania’s local registrations, permits and zoning page to find local municipal contact information. Use the contact information to inquire about your requirements.

Examples of common state permits and licenses include:

An agricultural license.
A childcare facility license.
An environmental project permit.
A home improvement contractor license.
A manufactured home license.
A sales tax license.

To get a sales tax license, visit the Pennsylvania Department of Revenue to determine your business’s taxability and sales tax license requirements.

7. Open a business bank account

After completing the registration process, it’s essential to keep your business finances separate from personal finances. To do so, open a business bank account and consider a business credit card to handle financial transactions specifically for your business. This will help you track expenses and prepare your tax forms. It can also be a key tool in defending your business’s limited liability protection, depending on your entity type.

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Frequently asked questions (FAQs)

The cost of starting a business in Pennsylvania depends on your business type. Domestic corporations, domestic limited partnerships and domestic LLCs have a $125 registration fee.

Foreign businesses cost $250 to register. Fictitious name registration costs $70, trademark registration costs $50 and most ancillary transactions cost $70 each. Annual reporting costs are $0 for non-profits and $7 for for-profit businesses.

Other associated costs may include hiring a registered agent, consulting with a business lawyer, reserving a business name, applying for business licenses and permits and opening a business bank account. These costs vary based on provider and type.

The time it takes to start a business in Pennsylvania can differ depending on your business type and complexity. Simple businesses like sole proprietorships that don’t have significant registration requirements can be formed in one day. Corporations, on the other hand, may take several weeks for business plan development and paperwork processing.

Some businesses, like online stores or consulting firms, can be operated virtually without a physical presence in Pennsylvania. However, if your business requires a physical location, such as a retail store or a manufacturing plant, you will need to secure a space.

Most businesses must list a physical address when appointing their registered agent office. However, if you don’t have a physical office in Pennsylvania, you can hire a registered agent service provider and list their address for this designation.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Rebecca Neubauer

BLUEPRINT

Rebecca Neubauer is a business, finance, and science freelance writer who learned about personal finance on her journey to pay off $100,000 in student loans. She gained her background in small business and entrepreneurship by transforming her own business from a side hustle to her full-time job, through her role as a business operations manager for six- to seven-figure online businesses, and by working with local small business owners in her community. Rebecca is an avid traveler focused on helping others live location-independent lifestyles, make money on the road, and travel the world through her website https://lifepothesis.com.

Alana Rudder

BLUEPRINT

Alana is the deputy editor for USA Today Blueprint's small business team. She has served as a technology and marketing SME for countless businesses, from startups to leading tech firms — including Adobe and Workfusion. She has zealously shared her expertise with small businesses — including via Forbes Advisor and Fit Small Business — to help them compete for market share. She covers technologies pertaining to payroll and payment processing, online security, customer relationship management, accounting, human resources, marketing, project management, resource planning, customer data management and how small businesses can use process automation, AI and ML to more easily meet their goals. Alana has an MBA from Excelsior University.