4.29.2021

How to Start a Business in Pennsylvania

Written by Austin Chegini

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Have you ever thought about starting a business in Pennsylvania, but you just didn’t know where to begin? Lucky for you, we’ve got you covered. We take a look at what you need to do to start a successful Pennsylvania business, including tax and licensing requirements.

Have a Plan

While it might seem elementary, a good business begins with a thorough business plan, which includes all of the following:

  • Whether you’re selling a product, service, or both
  • Whether you’ll have a brick-and-mortar location or online presence only
  • An analysis of your target market
  • The amount of financing you’ll need to get your business off the ground
  • An in-depth marketing plan 
  • Actionable steps for growth

By having a strong understanding of your company, your desired market, and the financing you need to get where you want to go, you’ll be able to provide investors and potential partners with confidence in you and your business.

In Pennsylvania, you can get online help with writing a business plan at the Pennsylvania Business One-Stop Shop.

Once you’ve got your business plan down, you’re ready to choose a business name.

Select a Business Name

Not only do you want your business name to reflect who you are and what your company stands for, but you also need to be sure it’s not already taken by another company doing business in Pennsylvania.

You can search for the name online; however, if that name is currently being used, you’ll need to change your business name to something else.

If you choose a fictitious name (one that’s different than your legal name for a sole proprietor, or different than the business entity’s legal name), you’ll need to register it with the Pennsylvania Department of State’s Bureau of Corporations and Charitable Organizations.

Sole proprietors using their legal name as the business name are not required to register their business structure with the state, but they may have other registration requirements.

Once you’ve cleared your business name for use, it’s time to select the appropriate business structure.

Choose Your Business Structure

Figuring out which type of business structure is most appropriate for your business can be challenging. In the Commonwealth of Pennsylvania, you have several options to choose from, including:

  • Sole proprietorships
  • General Partnerships
  • Limited Partnerships (LP, LLP, or LLLP)
  • Limited Liability Companies (LLC)
  • Professional Limited Liability Companies (PLLC)
  • Corporations (B, C, or S types, Nonprofits)
  • Foreign Associations

If you’re not sure which business structure is right for you, you can always seek the advice of a Pennsylvania-licensed business attorney, who can help you through the pros and cons of each type, and determine which most closely matches your existing business model.

Now that you’ve selected the best business structure for you, it’s time to get your tax ID number.

Obtain a Federal Tax ID Number

Nearly every type of Pennsylvania business needs to have a Federal Tax ID number, also known as a Federal Employer Identification Number (or EIN) for short. Acquiring this number makes it possible for your business to pay federal taxes and carry out some other tasks.

The IRS website makes registration easy and identifies which businesses don’t need to get an EIN.

You’re finally ready to register your business with the government of Pennsylvania!

Get Registered in Pennsylvania

Pennsylvania has a customized business registration checklist that new business owners can fill out to determine which specific documents need to be completed in order to register the business.

You can quickly register your business online or download the necessary forms and submit a paper application packet.

Registration fees cost:

  • $70 for General Partnerships
  • $250 for Foreign Associations
  • $125 for all other business structures

You may also need to register your business with your local municipality, and they could require additional documents and registration fees.

Veterans and reservists may qualify to have their registration fees waived.

The type of industry you’re in can affect how quickly (or slowly) you receive your business license. If you’re a professional engineer wanting to start your own business, for instance, it may take nearly a year for the registration process to be completed.

Once you’ve registered your business with the state, you’re ready to register for your tax accounts and any additional permits or licenses you may need for your specialized business type or industry.

Obtain a Pennsylvania Tax Account and Permits/Licenses

All Pennsylvania tax accounts must be registered with both the Pennsylvania Department of Revenue and the Pennsylvania Department of Labor and Industry, which can be done online for both agencies.

Depending on the type of business you have, you may need to register for some or all of the following accounts:

  • Sales tax
  • Use tax
  • Hotel Occupancy tax
  • Employer Withholding tax
  • Unemployment Compensation tax

Your business may also need additional licenses or permits to operate in the state, including:

  • Real Estate licenses
  • Licenses for automakers, auto dealers, and salespeople
  • Nursing licenses
  • Landscape architect licenses

This isn’t a complete list of every business activity that could require a specialized permit or license, and you may wish to consult with a business attorney licensed in Pennsylvania to determine which ones you need to obtain.

Some licenses will need to be renewed on a regular basis, so make sure you understand the renewal requirements for your business when you register.

If you plan on having employees, then you’ll also need to think about workers’ compensation insurance before you hire anyone.

Carry Workers’ Compensation

If you’re a business owner with employees, you’ll be required to carry workers’ compensation insurance.

This ensures that should an employee be harmed during their normal work duties or on your business property, they can receive the necessary medical treatment at no cost to themselves. Workers’ compensation claims may be denied by you, the employer, but the denial is typically appealable.

While this may feel overwhelming to think about as a business owner, the state of Pennsylvania has multiple resources available to help you navigate this issue.

Now that you’ve got your employees covered, your business plan is in place, and your tax and registration requirements are taken care of, you can focus on a few essentials.

Get all the Business Essentials

It can be easy to get caught up in the details when planning and registering your business. So much so, that you’ll overlook a few essential items on your to-do list, such as ensuring that you have a solid marketing strategy. This should include leveraging social media to your advantage—enabling you to reach a broader audience.

Don’t underestimate the importance of a user-friendly website when setting up your business. Customers who can find you online are typically more likely to seek out more information about you and your company.

But what many business owners forget about is a robust and secure point of sale system. You’ll want to make sure your customers have a top-notch payment experience. Don’t let a terrible checkout or payment system ruin your customers’ experience and drag down your business reputation.

In fact, Epos Now offers several great solutions for businesses, including mobile point of sale options for both Android and Apple phones and tablets.

Not only that, but this powerful system is also compatible with some of the most popular credit cards (including Visa, MasterCard, and American Express), while also allowing customers to use Apple and Google pay.

You can feel secure knowing that US News and World Report recently ranked Epos Now as one of the best POS providers in the country.

Call Epos Now today to see our point of sale solution in action.

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