How to start a Pennsylvania corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your Pennsylvania corporation.

How to start a corporation in Pennsylvania

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your Pennsylvania corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Pennsylvania requirements:

• Your name must include "Incorporated," "Company," "Limited," "Corporation," "Fund," "Association," or "Syndicate." You can also use an abbreviation of one of these terms.
• Your name must be unique and distinguishable from all other entity names on file with Pennsylvania's Corporations Bureau.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between a Pennsylvania S-Corp and C-Corp tax designation

There are similarities between a Pennsylvania S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, come down to the following:

• Ownership Rules: A C-Corp can have unlimited shareholders and unlimited stock classes, but an S-Corp is limited to a maximum number of shareholders, usually 100, and only one stock class.
• Taxes: A C-Corp is taxed separately. It files taxes at the corporate level, then shareholders may also be taxed on the individual dividends they receive. S-Corps are "pass-through" tax entities. No taxes are paid at the corporate level. Instead, owners pay taxes individually.
• Documents: An S-Corp must file IRS Form 2553 to elect S-Corp status. A federal subchapter S-Corporation is automatically a Pennsylvania subchapter S-Corporation as well. If you don't want your business to be a Pennsylvania subchapter S-Corporation, you must file Form REV-976 with the state, an "Election Not to be Taxed as a Pennsylvania S-Corporation."

3. Appoint directors and shareholders for your Pennsylvania corporation

Each state has its own personnel requirements for incorporating. In Pennsylvania, one or more persons or corporations may act as an incorporator, but incorporators are not required to be officers, employees, shareholders, or directors of the corporation. Directors must be at least 18 years of age. There are no residency requirements.

You may state the number of your corporation's directors in either your Bylaws or your business's Articles of Incorporation. 

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a Pennsylvania address) or choose one to do that service for you (if you are not located in Pennsylvania or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of Pennsylvania

Once you have a business name and registered agent, you can register your business as a Pennsylvania corporation with the state by filing your Articles of Incorporation. This document may be referred to informally as a corporation's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

Pennsylvania has publishing requirements. You must publish either your intention to form your corporation, or notice of the actual forming, in two newspapers of general circulation. It's best if you include a legal journal. Pennsylvania also requires the filing of a docketing statement when you file your Articles of Incorporation.

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in Pennsylvania must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your Pennsylvania corporation.

What to do after incorporating in Pennsylvania

Pennsylvania requires that corporations create corporate records and documents, such as Bylaws and Minutes, to maintain their corporate status. Your business should keep these documents regardless of whether they're required by your state. They help protect the legality of your corporate status. Requirements for Bylaws and Meeting Minutes differ between states.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in Pennsylvania means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in Pennsylvania, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, it is required that you keep records like bylaws and meeting notes to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state