Start a Pennsylvania Corporation

Starting a new business is a major undertaking. In Pennsylvania, you’ll need to work with the Bureau of Corporations and Charitable Organizations of the Department of State to form a new corporation. All those who want to do business in the Keystone State must file applications and other documentation with the Secretary of the Commonwealth.

A corporation is a complex business structure, and Pennsylvania allows the registration of business, professional, and nonprofit corporations. In this guide, we’ll cover the basics of both standard corporations and professional corporations (specialized corporations formed by licensed professionals like physicians or attorneys). If this sounds appealing to you, then read on!

To start a corporation in Pennsylvania, you must file the Articles of Incorporation and a Docketing Statement form with the Bureau of Corporations and Charitable Organizations of the Department of State.

Many documents can be filed online through Pennsylvania’s online business document filing system, which is accessed through Keystone Login. Regular processing takes seven to 10 business days, after which your completed documents will be returned via email.

Form your corporation in Pennsylvania

There are many steps to take before and after legally registering your corporation with the state. To simplify the process of forming a corporation in Pennsylvania, here are the steps to follow. Our guide below can help you start a corporation and get you on the path to business success.

Step 1: Name your Pennsylvania corporation

Naming your corporation is an important first step. It can also allow you to be creative. Choosing a name for any type of business will require a lot of time and decision-making. Pennsylvania has some important business naming rules that all entrepreneurs will need to abide by.

Pennsylvania Corporation Naming Rules

Pennsylvania law states the following about naming a corporation:

• The name of a corporation must contain the word “Corporation,” “Company,” “Incorporated,” “Limited,” or an abbreviation of any of these words. It could also contain the word “Association,” “Fund,” or “Syndicate.” The name cannot contain “Limited Liability Company” or any of its abbreviations.
• The name of a professional corporation may contain the abbreviation “P.C.” or the word “Associates.” It may also contain the name of one or more of the present, prospective, or former shareholders. The name should also uphold any requirements enacted by the profession’s regulatory bodies.
• Corporation names can’t have any words, phrases, or abbreviations prohibited or restricted by statute or regulation. Approval to use restricted items may be granted by a government agency, board, or commission depending on the situation.

Check if the name you want is available

To see if the name you want is available, conduct a name search on the Pennsylvania Department of State website. You can also call the Bureau of Corporations at (717) 787-1057 to verify name availability or submit a written request to the Pennsylvania Department of State. There is a search fee for written requests, and you can only list up to three names per request.

Get a domain name for your Pennsylvania corporation

You should also conduct a domain name search to see how the name you want can be used as a website address. Reserving your corporation name and a domain name is necessary if you want to reserve your rights to their usage. We can help you with reserving a domain name.

Reserving a Business Name

If you have your ideal name but aren’t ready to file the formation paperwork yet, you can reserve it. A name reservation form can be filed online or by mail for $70 (as of this writing). If the name is available at the time of filing, it will be reserved for 120 days. If you haven’t registered your corporation with the commonwealth after this period, you can apply to reserve the name again for a further 120 days.

Getting a “Fictitious Name” for Your Corporation

A “fictitious name,” or “doing business as” (DBA) name, allows you to do business under a name other than your corporation’s legal name. According to the Fictitious Names Act, you must register a fictitious name with the Pennsylvania Department of State for $70 (as of this writing). This registration establishes the identity of the business owners. However, it doesn’t give owners exclusive rights to the name.

Additional Rules for a Fictitious Name

If your fictitious name registration lists one or more individuals with an interest in the business, you must fulfill the following advertising requirements:

• You must officially publish notices that your business has filed or intends to file an application for registration of a fictitious name.
• The advertisement must be placed in two newspapers in the county where your business will be located. The newspapers must have general circulation, and one must be a legal newspaper.

Although we don’t offer a fictitious name service for Pennsylvania, we do have a page containing more information about the topic.

Check for trademarks

Before submitting your paperwork, make sure that your desired business name hasn’t been trademarked by conducting trademark searches at the state and federal levels. A trademark is used to identify your company’s goods and set them apart from the competition. A service mark is similar but represents services instead of goods. These marks can be any word, name, symbol, or any combination of such. Before using or registering a mark, you’ll need to search the commonwealth records and United States Patent and Trademark Office (USPTO) database to determine availability.

Pennsylvania trademark registration costs $50 and is valid for five years, after which you’ll need to file a renewal. Federal registration is valid for 10 years and costs substantially more. It’s usually easier to register a trademark with the state, but federal registration offers broader protection. This step is important if you plan to expand your business outside of the state.

Step 2: Appoint directors

A corporation is a business entity with rights, privileges, and responsibilities. Those who form a corporation are known as incorporators. In Pennsylvania, you can have one or more incorporators. They appoint directors who form a board whose job it is to manage the corporation. A director can be an incorporator but doesn’t have to be.

For professional corporations, the criteria for who can be a director are a bit stricter. In most cases, the directors need to be licensed in the corporation’s profession.

Electing the initial directors

Incorporators elect the company’s initial directors at an organizational meeting before filing the Articles of Incorporation with the commonwealth. This meeting is also when you’ll create and approve corporate bylaws, determine your share structure, and execute an incorporator’s statement. 

Additional Considerations

Pennsylvania law requires a business corporation to have at least one director to manage its business affairs. Provide details within your articles or bylaws for how directors will be elected, removed, or succeeded.

Step 3: Choose a Pennsylvania registered office

A registered office — commonly referred to as a registered agent in other states — is a designated street address where a person or provider receives service of process and other legal correspondence for your company. This is a requirement for all PA corporations.

Registered Office Considerations

When you form a Pennsylvania corporation, you’re required to provide the state with a registered office address. If your corporation doesn’t have a physical location or mailing address in the commonwealth, you must choose a commercial registered office provider and list them on your articles instead. You can also choose this option if you would rather not receive legal notices at your place of business or if you aren’t available to receive them during regular business hours.

Step 4: File the Pennsylvania Articles of Incorporation and Docketing Statement

The Articles of Incorporation, also known as a Certificate of Incorporation in some other states, is a document that legally forms your corporation. Each state has its own forms and filing requirements. You’ll probably want to form your corporation in the state that will be considered the “home base” for your business operations.

The Articles of Incorporation form is filed with the Department of State for $125. You can do so online through the Keystone Login website. Veteran- or reservist-owned small businesses are exempt from this fee when they provide proof of status. If you’re forming a professional corporation, you’ll need to add a heading to the form that states your company name and that you’re a professional corporation.

You may also want to consider business and tax perks. These incentives vary by state and can offer many benefits depending on your type of business. How much it costs to form a corporation varies by state, so that’s something else to consider when deciding where to start a business.

What to Include in your Pennsylvania Articles of Incorporation

If you aren’t sure what to include in your Articles of Incorporation, then consider the following:

• The name of the corporation (following all naming laws)
• The corporation’s proposed registered office or the name of the corporation’s commercial registered office provider
• The name and address of each incorporator
• The specified future effective date, if any
• Additional provisions, if any
• Signatures of all incorporators
• The number of shares the corporation is authorized to issue

Issuing Stock and Shares for Your New Corporation

Authorized shares are how many shares of stock the corporation can issue once it’s formed. Shares can be issued only once, but they can be sold and traded. Those who own or are given shares are known as shareholders. If you plan to issue more than one kind of share, you’ll need to add additional provisions to your Pennsylvania Articles of Incorporation.

For professional corporations, keep in mind that only licensed professionals (in the same field as the business) can be shareholders of the company.

Shares are used to gain the investment money needed to start and grow your business. They can also be given to initial investors to reward them, as they’ll receive returns on their investment through dividends. You’ll learn more about issuing stocks later.

Filing a Docketing Statement in Pennsylvania

New entities in Pennsylvania must also file a Docketing Statement with the Articles. It includes the following information:

• Entity name
• Tax responsible party
• Description of business activity
• Employer Identification Number (EIN) or Federal Tax ID Number (FEIN) (more on EINs later in this article)
• Tax year or fiscal year-end

The Internal Revenue Service (IRS) allows companies to be taxed according to a calendar or fiscal year, which means a period designated for accounting purposes and preparing financial statements. There is no fee for filing a Docketing Statement.

Pennsylvania Corporation Publication Requirement

Pennsylvania has an advertising requirement that must be met when filing the articles. You must publish the intent to file or the actual filing of the Articles of Incorporation. The ads must run in two newspapers of general circulation. If possible, one newspaper should be a legal journal.

The ads must contain the name of the corporation and a statement that it is to be, or has been, organized under the provisions of the Business Corporation Law (BCL) of 1988. You should run the ads in the county where your business is located.

Affidavits of publication, or proofs of the advertising, will be sent to you after the ads have run. It isn’t required to file this documentation with the commonwealth; however, you should file them with the minutes of the corporation should anyone ever need to reference them.

Step 5: Create corporate bylaws

Corporate bylaws are rules and regulations governing the operation of your business. They are created and adopted by your board of directors. In Pennsylvania, you aren’t legally required to file bylaws; however, they are very important and useful. Bylaws help ensure your business will be well run and regulated. Keep your bylaws filed with your company’s other business records.

If you’re forming a professional corporation, keep in mind that your bylaws will need to uphold all requirements enacted by your industry’s governing standards.

What to Include in Your Bylaws

Corporate bylaws usually include information like the following:

• Name of the corporation and business address
• Purpose or mission of the corporation
• Names of incorporators, the board of directors, and officers
• Qualifications, elections, and the terms of directors and officers
• Committee operations (groups of board members with specific duties)
• Details about issuing stocks
• Shareholder meeting requirements
• Disclosure of conflicts of interest
• Procedures to amend bylaws

Step 6: Draft a shareholder agreement

A shareholder agreement outlines the rights and responsibilities of your corporation’s shareholders or those who own stock in your business. It’s a legal document used to ensure equality and protect shareholders. The agreement should include shareholder and director names and contact information. You should also consider including important details about:

• Voting rights
• Distributing dividends
• Selling or transferring shares
• Amending the agreement
• Resolving disputes

You can draft a shareholder agreement by using an online template. You don’t need to file one with the commonwealth, but a copy should be kept with your business records. If you don’t have a shareholder agreement, your company must abide by Pennsylvania corporation law.

Step 7: Issue shares of stock

As a corporation, you’re required to issue shares of stock as detailed in the Articles of Incorporation. How many and what kind you issue is up to you. Please note that you must record who owns shares and how many shares have been publicly or privately issued.

A private corporation issues private stocks, usually to company founders, employees, managers, or a private investor group. Not issuing public stock allows you to keep ownership of the business with private owners. There’s more freedom to choose your investors and your company’s focus.

Issuing Stock to the Public

Sometimes, private companies go public when they’re ready to grow. When corporations issue shares on the public market, it means anyone can buy them. This often results in companies gaining access to large amounts of cash, but it’s also risky and could lead to failure.

Remember that if you issue public shares, you must file quarterly statements with the U.S. Securities and Exchange Commission (SEC). To learn more about Pennsylvania regulations, contact the Pennsylvania Department of Banking and Securities.

Issuing Stock as a Professional Corporation

Professional corporations can’t sell stock to the general public because all shareholders need to be licensed in the same professional service as the corporation.

Step 8: Apply for necessary business permits or licenses

Business permits or licenses may be necessary for your corporation to operate legally in Pennsylvania. Unfortunately, there’s no one-stop shop for all local, state, and federal permits and licenses. It may be worth it to hire a service to conduct research for you so you can save time and meet all legal requirements.

The Bureau of Corporations in the State Department doesn’t issue permits or licenses. They recommend that if you conduct a regulated professional activity that you apply for a license from that regulatory agency, commission, or board (this is especially important for professional corporations). Additional licensing requirements can be found by contacting your county, city, borough, or township office.

Step 9: File for an EIN and review tax requirements

Before you file the Pennsylvania Articles of Incorporation and Docketing Statement, you need to apply for and have an EIN. An Employer Identification Number (EIN) is given to you by the Internal Revenue Service (IRS). It’s a unique tax ID number for your corporation. You use it to file your Docketing Statement, hire employees, open business bank accounts, and file taxes. An EIN is also known as a FEIN.

You can file for an EIN online for free. You can also complete the SS-4 form, mark it Attn: EIN Operation, and fax it to 855-641-6935. The form can also be mailed to the Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.

Let us take care of this step for you. As part of our business services package, we can help you secure an EIN.

Step 10: Submit your corporation’s first report

A first, or initial report, is information you file with the commonwealth about your corporation. Business, nonprofit, and professional corporations must file this report. They are required to file a Statement of Summary of Record only once with the state but can file it again as needed. The statement includes the corporation’s current name and the following, as applicable:

• Address of the current registered office or the name of its commercial registered office provider
• The statute by or under which it was incorporated or formed
• The date that the corporation was formed and under which name
• Statement of how the company was incorporated or formed
• The date that the original Articles of Incorporation were recorded and where
• If the statement is being delivered to the Department of State with amended and restated Articles of Incorporation
• If the currently effective articles are filed or recorded, plus the Recorder of Deeds book and page numbers
• If the amended and restated articles for a professional corporation are attached
• If the corporation has never adopted any name other than its original and current name
• A list of any names by which the corporation was known, other than its original name and current name, plus the date on which each name change became effective

The Statement of Summary of Record can be mailed with a $70 fee to:

Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722

How much does it cost to start a corporation in Pennsylvania?

It costs at least $125 to start a corporation in Pennsylvania. Most documents can be filed online, but you’ll need to pay for postage for those filed through the mail.

Costs may include name reservation ($70), fictitious name registration ($70), state trademark registration ($50), federal trademark registration ($225), Articles of Incorporation filing ($125), corporate bylaws template ($35), commercial registered office provider ($100-$300 annually), and first report ($70).

Be sure to take into account other costs, such as permits, licenses, and annual reports. Benefit corporations, those formed to create a public benefit, must file an Annual Benefit Report for $70 each year.

Nonprofit corporations are also required to file an annual report; however, there is no cost to do so.

Reduce stress and worry by partnering with ZenBusiness. We’ll handle the red tape, keep your business compliant, and help you to more easily start your Pennsylvania small business.

What are the benefits of a corporation in Pennsylvania?

There are many advantages to forming a corporation in the Keystone State. The benefits of forming a corporation include personal asset protection and recognition as an official business within and outside of the U.S. Shares of stock can also be issued so you can raise the capital needed to start, run, and grow your business.

In addition, Pennsylvania offers a variety of business incentives, credits, and programs. The state provides these benefits to support business startups and promote job and economic growth.

Tax credits, rebates, refunds, and other monetary assistance programs may be available if your corporation is eligible.

A disadvantage of forming a corporation is that it’s a complex business structure, especially when compared to a limited liability company (LLC). It involves more time, paperwork, and people to get it started and keep it running. Some corporations are also subject to double taxation, where you have to pay taxes twice on corporate income.

How is a Pennsylvania corporation taxed?

There are three main types of corporations in Pennsylvania: C corporation, S corporation, and nonprofit corporation. Your company will automatically be registered as a C corporation unless you choose differently.

C Corps

C corporations are considered separate business entities that are taxed at the corporate level. This leads to double taxation for shareholders and owners, who must pay both corporate and individual taxes.

S Corps

S corporations are considered pass-through entities. Typically, this means they aren’t taxed at a corporate level, and shareholders only pay taxes on their individual tax returns.

Nonprofits

If you form a nonprofit corporation and follow nonprofit guidelines, you can apply to be exempt from paying corporate income taxes. Employees of the nonprofit corporation will still pay taxes on their wages.

There are a variety of Pennsylvania taxes that will need to be paid, such as:

• Corporate net income tax
• Corporate loans tax
• Capital stock tax

Special classes of corporations, like professional corporations, could also be subject to other selective business taxes. It’s best to consult with a tax professional to make sure your corporation is filing for all the applicable local, state, and federal taxes.

Recommended article: How to Form a Pennsylvania Professional Limited Liability Company

We can help

Are you ready to start your corporation in Pennsylvania? Then we can help! Check out our formation services and others that can help you run and grow your business (note: at this time, we don’t currently offer formation services for professional corporations, just standard ones). Get started today by learning what we can do for you.