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What legal steps do I need to take when setting up a limited liability company (LLC) in Pennsylvania?

Picture of Chris Battis By   ·  1 minute read

Setting Up a Limited Liability Company (LLC) in Pennsylvania

When setting up a limited liability company (LLC) in Pennsylvania, there are several legal steps that need to be taken:

  1. Choose a name for your LLC that complies with Pennsylvania's naming requirements. The name must be unique and cannot already be in use by another business in Pennsylvania. Additionally, the name must include "LLC" or "Limited Liability Company" at the end to indicate the type of business entity.
  2. File Articles of Organization with the Pennsylvania Department of State. These articles include basic information about your LLC, such as the name, address, and purpose of the business. There is a filing fee of $125 to submit the Articles of Organization.
  3. Create an LLC operating agreement. This agreement outlines how the LLC will be managed, how profits and losses will be distributed, and the rights and responsibilities of each member. While an operating agreement is not required by law, it is strongly recommended to have one in place to protect your business and avoid future disputes.
  4. Obtain any necessary licenses and permits for your specific industry or business. This may include a business license, tax identification number, and any required specialized licenses such as a medical or professional license.
  5. Consider obtaining liability insurance to protect your LLC from any potential lawsuits or claims.
  6. Comply with any ongoing reporting requirements, such as filing annual reports and paying state and federal taxes.

It is important to note that while forming an LLC does protect your personal assets from business liabilities, there are some exceptions to this protection. For example, if you personally guarantee a loan for your LLC or engage in illegal or fraudulent activities, your personal assets may be at risk.

Additionally, it is always recommended to seek the advice of a licensed attorney when setting up an LLC or any other business entity. A lawyer can provide personalized guidance and advice based on the specific needs and circumstances of your business.