A limited liability company (LLC) a business entity that may be taxed as a partnership, sole proprietorship, or, in some instances, as a corporation, which combines flow-through taxation in which owners include all business profits or losses on their individual tax returns with the limited liability of a corporation. Forming an LLC can benefit your business but the process is often complex. It is important to consult with experienced business lawyers who can help guide you through the process. There are several critical steps that must be taken to form an LLC: Choose a Name for Your Limited Liability Company Your LLC name must include the words "limited,” "company,” "limited liability company," or an abbreviation of one of these three options. Your business name cannot be the same as the name of another LLC or corporation on file with the Pennsylvania Department of State. File a Certificate of Organization A Certificate of Organization must be filed with the Bureau of Corporations and Charitable Organizations, along with a docketing statement. The certificate must include:
The certificate must be also be accompanied by a completed New Entity Docketing Statement. This form must include: the LLC's name, its purpose, name and address of person responsible for tax reports, effective date, and fiscal year end. Foreign LLCs organized outside of the state must also register with the Pennsylvania Department of State to do business in Pennsylvania. Appoint a Registered Agent A registered agent or registered office is an entity that agrees to accept legal papers on the LLC’s behalf. The registered agent must be a Pennsylvania resident or a company authorized to do business in Pennsylvania. Create an Operating Agreement Although an operating agreement is not required in Pennsylvania, it is advisable to have an attorney who is well versed with contracts create an agreement designed by company members that contains provisions for critical items and rules to run the company. Comply With Tax and Regulatory Requirements If an LLC has more than one owner, it must obtain an IRS Employer Identification Number. A single-member LLC must acquire an EIN if it is taxed as a corporation or has employees. If your LLC will be collecting sales tax, you must also register with the Pennsylvania Department of Revenue. File Annual Registration LLCs performing professional services must file a Certificate of Annual Registration by April 15th of every year. Failure to file Annual Registration can result in penalties, interest and additional fees. A Uniform Commercial Code lien may be placed against the business until all fees have been paid. Qualified business lawyers can help to make sure your business avoids the pitfalls of failing to file yearly. To see if an LLC is right for you, contact your local team of lawyers practicing in Montgomery County, PA who can help you protect your assets, grow your company and provide smooth sailing through the process of forming an LLC.
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