Pennsylvania LLCs are Free for Veterans and Reservists
Thanks to Act 135 of 2016, which became effective on January 2nd, 2017, Veterans and Reservists don’t have to pay the $125 filing fee for forming an LLC in Pennsylvania.
For Veterans or Reservists, we’ll show you how to form an LLC in PA for free in this short article.
What Defines a Veteran or Reservist?
Under PA’s Military and Veterans Code, a Veteran is defined as “an individual who has served in the armed forces of the United States, including a reserve component and National Guard, and who has been discharged or released from the service under conditions other than dishonorable.”
Under the same Code, a Reservist is defined as “a member of a United States Armed Forces reserve component or National Guard.”
Along with the Pennsylvania Certificate of Organization and Docketing Statement (which we’ll discuss shortly), you’ll need to provide proof of your status when submitting your documents to the state.
How to Provide Proof
There are 4 different ways you can show to the PA Bureau of Corporations that you are a US Veteran or Reservist:
- Federal DD-214 Form
- Federal NGB-22 Form
- A valid Federal Veterans’ Administration Card
- A valid Department of Defense-issued Military Identification Card
Along with your LLC filing, you must send a photocopy of one of these documents to the Bureau by mail (or you can deliver in-person if you want to drive to Harrisburg). Unfortunately, there is no option to file them online.
Warning: You will be held liable for third-degree misdemeanor if you commit any of the following:
1. Fraudulently obtain the Veteran/Reservist filing fee exemption.
2. Assign, transfer, or attempt to assign or transfer a business filing fee exemption.
3. Use or attempt to use a business filing fee exemption in any manner contrary to this Act.
Let’s now discuss the steps to forming an LLC in PA.
1. LLC Name Search
Search your desired LLC name in the Pennsylvania Business Entity Database:
Your LLC name must be “distinguishable upon the record” (unique) and must include the designator “LLC”, “L.L.C.”, “Limited Liability Company”, or any abbreviation, at the end of your name.
2. Choose a Registered Office
A Registered Office is a street address (PO Boxes are not allowed) located in Pennsylvania where legal documents (called Service of Process) can be delivered if your LLC is sued. You can use your home address, an office address, or the address of a friend or family member. This Registered Office address will be listed in your Certificate of Organization, discussed in Step 3 below.
If you don’t want to use any of those addresses (because of privacy; the addresses will appear on public records), you can hire a Commercial Registered Office Provider (CROP) in PA. We recommend Northwest Registered Agent. They have excellent customer service and their yearly fee is just $125 (most companies charge $200 – $300 per year).
3. Mail your Certificate of Organization, Docketing Statement, and Proof
PA Department of State
Bureau of Corporations
PO Box 8722
Harrisburg, PA 17105-8722
The PA Bureau of Corporations will approve your LLC in 7-10 business days and you will receive a stamped and approved copy of your Certificate of Organization in the mail as proof your LLC is now in existence.
Tip: If you want a slightly faster approval time, you can send these documents through UPS or FedEx, instead of regular USPS mail.
4. Complete and Sign an LLC Operating Agreement
Your Pennsylvania LLC’s Operating Agreement spells out who the owners (called Members) of the LLC are, how profits are distributed, how taxes are paid, and more.
You can download a free 6-page Operating Agreement from our extended PA LLC Course here:
5. Obtain a Federal Tax ID Number (EIN) from the IRS
Apply for your Federal Tax ID Number (also known as EIN, or Employer Identification Number) only after your LLC is approved.
The EIN is free from the IRS and it can be obtained online with the EIN Online Application:
6. Open an LLC Business Checking Account
Take your approved PA Certificate of Organization, Federal Tax ID Number, and Driver’s License to the bank to open a business checking account in the name of the LLC.
It’s strongly recommend to create a separate bank account for the LLC to keep business and personal finances apart; an important part of running a legitimate company.
You can read more LLC banking tips here.
7. Obtain any Required Business Licenses and/or Permits
Depending on what type of business you are in and where your business is located, you may need to obtain certain business licenses and/or permits.
You’ll need to get in contact with your city, county, township or borough to find out the requirements for your company, or you can hire License Suite for help:
8. File Your Taxes
Your LLC will not pay federal income taxes directly to the IRS, but instead, taxes will “flow through” to your personal income return (US 1040).
However, you’ll need to file PA-40 with the Pennsylvania Department of Revenue, as well as additional returns, depending on your type of business.
And further, you also likely need to file local taxes with your county, city or township.
We strongly recommend getting assistance from a local accountant as taxes can be quite complicated and making mistakes can lead to penalties and fines.
Congratulations, those are the steps to setting up a Free Pennsylvania LLC for Veterans and Reservists!
Pennsylvania Department of State Contact Info
If you have any questions, you can contact the Pennsylvania Bureau of Corporations at 717-787-1057 (Monday through Friday, 8am – 4:45pm).