How To Start a Business in Pennsylvania

About half of Pennsylvania’s private labor force, or 2.5 million people, work in the state’s 1.1 million small companies. Since small businesses make up 99.6% of all enterprises in Pennsylvania, they are extremely important to the state’s economy. The financial impact of small businesses can be seen in a range of industries, including manufacturing, education, professional services, retail, construction, and health care.

Pennsylvania offers many resources to assist businesses in expanding and thriving, including no-cost or inexpensive technical assistance and consultation from industry professionals all around the state. The thriving economic landscape also creates a way for businesses to grow steadily.

Step 1: What Kind of Business Should I Start in Pennsylvania?

Due to its convenient location, highly educated workforce, support for small enterprises, and affordable cost of living, company owners can choose from several small businesses that will flourish in Pennsylvania. The company should ideally capitalize on any of the important areas of the Pennsylvania economy. Some good examples of businesses to start in Pennsylvania include

How To Do Market Research in Pennsylvania

Market research includes activities such as locating the companies already active in a certain industry, locating financial data for the entire sector, examining customer demand for a good or service, and examining industry estimates and potential. For organizations of any size or sector, market research is a crucial tool for understanding their target market, identifying client wants and preferences, and learning about their rivals. In a nutshell, market research aids in the expansion and success of enterprises. Data that can be gotten from market research include

Small firms must concentrate on the types of data that will be most useful for their particular needs because gathering market research data may be time-consuming and expensive. One of the most effective ways of performing market research is through surveys. Surveys are a sure way to gather direct feedback from potential customers and understand the target market.

Step 2: How To Write a Business Plan

A business plan is a written outline that gives a general overview of a business. The business plan also acts as a roadmap for the company, keeping it on course and ensuring that activities expand and change to achieve the objectives stated in the plan. The main goal of the majority of business plans is to raise capital from investors and establish the principal business focus. An entrepreneur can more clearly comprehend what has to be done to achieve their financial goals by writing a business plan. These objectives are also emphasized in the completed company strategy. Though they can be developed for other audiences as well, business plans are typically created for lenders, investors, or shareholders. It’s crucial to adjust a company plan for the intended audience. 

A comprehensive business plan contains information on:

Step 3: Do I Need a Business License in Pennsylvania?

Yes, business licenses are mandatory to start and operate a business in Pennsylvania. To conduct business legally in Pennsylvania, individuals must have a business license. Depending on the kind of services and goods a business provides, the state mandates that it be completely licensed and registered. These regulatory company licenses and permits address areas including sales tax, public health and safety, and the environment.

A person may need to apply for additional registrations, licenses, and certificates with different state government agencies depending on the type of business they are conducting. The Pennsylvania Business Special Registrations webpage can be used if they are unsure of the type of licenses their company needs. 

Professional licenses are also important for businesses that offer any professional services in the state. Businesses such as dentistry, law, medical services fall under this category. Business owners can find the necessary licenses for their business and apply for professional licenses by visiting the department of State webpage. This webpage can also be used to find licensed businesses in the state. There are also a number of zoning requirements and municipal permits needed to start a business in a particular location in Pennsylvania. It is a good idea to ask the city administration what the exact criteria are before applying for a business license. Enquires about all the licenses to start a business can be made online by filling out the Pennsylvania business online one-stop shop contact form.

The telephone number to call to reach the Pennsylvania Business One-Stop Shop is 1.833.722.6778. Monday through Friday, 8:00 AM to 4:30 PM, excluding state holidays, are the usual business hours.

How Much Does a Business License Cost in Pennsylvania

The cost of a business license in Pennsylvania is dependent on the type of license and the location of the business within the state. For example, a retail food facility will have to obtain a license from the Pennsylvania department of Agriculture. This license costs $241 with an annual renewal fee of $82. The business is also required to pay an inspection fee of $150 to get a license.

An example of a license that is dependent on the jurisdiction where the business is located is the business commercial activity license in Philadelphia. This license costs $125.

Step 4: How Much Does It Cost To Start a Business in Pennsylvania?

How To Get Business Funding in Pennsylvania

Some sources of funding for new businesses in Pennsylvania include:

How to Self-Fund a Business in Pennsylvania

Self-financing is a way of funding a business by using savings from one’s own pocket, commissions on first purchases, and loans or investments from family and friends. Self-funded businesses take a different approach than those that use standard financing techniques, such as enlisting investors to acquire extra capital. Therefore, entrepreneurs can retain control over all business-related choices if they use their money to create and expand a business. However, those that choose this strategy might not have enough money to extend a company’s activities at a respectable rate.

How To Find Investors in Pennsylvania

Most business owners depend on investors to fund a business at different stages of a company’s lifecycle. There are many types of investors and the business owner must choose the right investor according to company size ,  business strategy, and the needs of the company at a particular time. securing investment takes a lot of planning and consideration and is dependent on the ability of the business owner to prove business profitability for a young business and worthiness for a start-up.

Business owners can search for investors In Pennsylvania through

Angel Investors

Angel investors are persons who put their money into startups to support a business in its initial stages. most time angel investors are high-networth individuals that invest in a company in its early stages in exchange for a stake or equity in the business. In Pennsylvania, there are a lot of angel investors and angel investor networks that connect entrepreneurs to persons that are willing to invest. Some local angel Investors in Pennsylvania include

The Commonwealth of Pennsylvania’s Angel Investment Venture Capital Program (Program) is another service the Pennsylvania government offers to foster a business climate that attracts and supports early-stage investment for Pennsylvania-based companies with the potential for rapid expansion. Business entities that need an angel investor can submit an application to the office of budget for funding.

Inquires can be made at

 Budget at 333 Market Street, 

19th Floor, Harrisburg,

 PA 17101; 

telephone: 717-787-2542; 

email: budget@pa.gov.

Venture Capitalists

Venture capitalists fund high-risk businesses that are thought to have room for long-term growth. Investment banks, wealthy investors, and other financial entities are typically venture capitalists. Pennsylvania has a long list of venture capitalist firms that provide investment opportunities for new businesses in the state some of them are

How to Get a Loan To Start a Business in Pennsylvania

Small business loans provide a way for small business owners to get funds for their new businesses. when searching for a loan it is important to find a good interest rate that is feasible from a business perspective and understand the lender’s risks attached to the loans. In Pennsylvania government Authorities and private firms offer a number of different categories of loans under programs geared toward building businesses.

The Pennsylvania Department of Community and economic development offers loans through programs that are accessible to business owners. Some of these programs include

Small Diverse Business Capital Access Program

The Pennsylvania Industrial Development Authority (PIDA) oversees the Small Diverse Business Capital Access Program, which offers low-interest loans and lines of credit to small to various companies that agree to maintain and create full-time jobs in Pennsylvania. This fund is available to businesses in different sectors of the Pennsylvania economy and can be used to purchase business equipment.

The Business Opportunities Fund 

The business opportunities fund gives persons access to installment loans and lines of credit to business owners to increase cash flow and expand their business.

Pennsylvania Capital Access Program

Through partner banks, this program offers a loan guarantee that can be used for various commercial reasons. Businesses can use this loan to buy land, a building, equipment, or as working capital.

Getting a Loan from the U.S. Small Business Administration (SBA)

The US small business administration allows business owners to obtain financing for small businesses. Through a recognized lending institution, anybody can qualify for an SBA-guaranteed loan. SBA-backed loans feature lower down payments than conventional loans, and some of them can be obtained with no collateral. 

To get these loans, the business will have to show that they meet SBA size standards and can repay the loans. Generally, the loans can be accessed by any business with a sound business plan. Eligibility for this loan is also determined by how a business generates money, the nature of its ownership, and the location of the business.

How To Find Pennsylvania Business Grants

Pennsylvania business grants are available to new businesses that meet certain criteria in the state. Grants, unlike loans, are most times not repaid; hence there is a lot of competition for grants in the state of Pennsylvania. To get grants, businesses must adhere to guidelines during application and must be eligible to access grants in the state. Some business grants available to businesses in Pennsylvania include:

Small business advantage grant

The small business advantage grant is given to businesses in Pennsylvania with more than 100 employees to improve their equipment and supplies. The grant is between $5000-$8000 depending on the size of the business.

Empowerment zones grant

This grant is specifically for businesses that reside in Philadelphia.

Can I Start a Business With No Money in Pennsylvania?

Yes starting a business with no money is doable. The key to starting a business without money is creating a buisness plan and having a good network of persons, a good business plan will eventually attract investors to the business and will allow the business owner to follow a path to eventual business growth while having a good network will ensure that the business has a customer base.Entrepreneurs can create a service-oriented business with little or no money if they possess the necessary skills. Online Business that involves serving as a middle man such as real estate referal can also be started with little or no money.

Step 5: Choosing a Business Structure in Pennsylvania

In Pennsylvania, businesses can choose from four different forms of organizational structures: corporations, limited liability companies (LLCs), and general or limited partnerships. Every business structure has unique qualities, as well as unique registration requirements, registration costs, and annual filing obligations. The business structure decided on will be influenced by legal and tax factors, as well as personal needs and the needs of the business owner.

Before filing, business owners should do their homework, consult legal counsel, and get expert tax guidance. To learn more about the registration costs and yearly filing requirements for each business structure, view the Department of State’s Fee Schedule.

How To Start a Sole Proprietorship in Pennsylvania

A sole proprietorship is the most straightforward type of structure to start in Pennsylvania because it allows for exclusive ownership and control. The majority of small enterprises are run by sole proprietors. As a company expands, the owners may choose to create a new structure, like a partnership or a corporation. There are a few advantages that sole proprietorships have over other business arrangements. They are easier to set up, have fewer legal requirements, and the owner keeps the earnings. The process of ending the business, if necessary, is likewise straightforward. However, sole proprietorships have limited capacity to generate money, and the firm is ended upon the death of the sole proprietor. They also have unlimited personal liability for all obligations and liabilities of the business.

To start  a sole proprietorship in Pennsylvania, business owners can follow these steps:

How To Start a Corporation in Pennsylvania

The most complicated type of company structure is a corporation, mostly due to the amount of paperwork needed to form one. Corporations cap their liability at the amount stockholders have invested in their shares. Corporations are unaffected by an owner’s share transfer or death, in contrast to other corporate structures. Since profits are taxed at the corporate level, and dividends distributed to owners are taxed at the individual level, corporations must maintain extensive records and are subject to strict regulation. Prospective shareholders transfer funds and/or assets in exchange for the corporation’s capital stock while founding a corporation.

In Pennsylvania, C companies and S corporations are the two types of corporations used for tax and income purposes. Each is subject to a particular set of rules that determine its profits and losses. While corporations electing a Federal S status must utilize Pennsylvania personal income tax laws for determining income, C corporations follow federal income tax regulations with minor modifications.

Cooperations are created in Pennsylvania by following these steps:

 How To Start an LLC in Pennsylvania

Due to the owners’ restricted personal liability for the LLC’s debts and activities, limited liability firms (LLCs) are common in Pennsylvania. This business structure is comparable to corporations, however, LLCs are less complicated and pay less additional tax than corporations do. With its flexible management and the advantage of pass-through taxation, LLCs function more like sole proprietorships or general partnerships. Members of an LLC are its owners. Since the majority of states do not place restrictions on ownership, members can be natural persons, corporations, other LLCs, or foreign organizations. No minimum or maximum number of members is established. Some corporations, like banks and insurance companies, cannot be LLCs.

By submitting a Certificate of Organization and docketing statement to the Bureau of Corporations and Charitable Organizations, a Pennsylvania limited liability company can be created. It is recommended to acquire legal guidance before filing to ensure that all legal ramifications are properly taken into account because there are significant legal concerns involved when launching any business, including tax considerations.

Under Pennsylvania law, various forms of specialized limited liability businesses may be set up. In Pennsylvania, several kinds of LLCS include

How To Start a Business Partnership in Pennsylvania

Partnerships are similar to sole proprietorships, except they involve two or more people. They are simple to establish and take advantage of each member’s managerial and financial skills. In Pennsylvania, business owners have a choice between three forms of partnerships. general partnerships, limited partnerships, and limited liability partnerships.

How To Start a Limited Partnership in Pennsylvania

Any partnership with one or more general partners and one or more limited partners is referred to as a limited partnership. The general partners have management control, share the right to use partnership property, share the company’s profits in predetermined proportions, and are jointly and severally liable for the partnership’s debts. The limited partners have limited liability exposure and are not involved in the day-to-day management of the limited partnership. Limited partners may invest in the company but are not allowed to vote or manage its day-to-day activities.

Business owners must file a Certificate of Limited Partnership with the Department of State to create a limited partnership in Pennsylvania.

A limited liability partnership is created when an existing general partnership or limited partnership files a statement of registration seeking limited liability status under Chapter 82 of Title 15 and registering with the Bureau of Corporations and Charitable Organizations. The general partners’ personal liability as general partners is reduced by the limited liability partnership status, which also offers them additional protection. Professional partnerships, such as accountancy firms or law firms, frequently form limited liability limited partnerships.

How To Start a Nonprofit in Pennsylvania

A non-profit is an organization set up to carry out social welfare work in the community. Members and shareholders in a nonprofit do not receive any payments from the profits of the company instead, the monetary gains are reinvested into the company to accomplish the mission of the non-profit.

The mission of a nonprofit organization must be clear. The IRS lists the following as examples of this: philanthropic (social causes), religious, scientific, educational, literary, or other defined purposes for the general welfare.

To start a nonprofit in Pennsylvania:

Step 6: Choosing a Business Location

A business location is one of the most significant choices that affect a business in Pennsylvania. Business owners must take several factors into account before choosing a location. The type of business is the key factor in choosing a location. Municipal and zoning requirements determine what kind of businesses can run in certain areas of the state. certain cities in Pennsylvania have zoning codes that new businesses must adhere to. An example is Philadelphia which has an atlas map tool that people can use to find good locations for their new businesses. when choosing a location business owners must find one that fits into the following criteria

What Kind of Business Can I Run From Home in Pennsylvania?

Pennsylvania offers entrepreneurs the chance to launch new enterprises and eventually expand them, especially for those with limited funding. Starting a business from home is simple and doesn’t cost much. Pennsylvania’s regulations for home businesses are likewise not complicated, making registration simple. In Pennsylvania, due to zoning and professional licensing requirements, some businesses cannot be run from home some businesses that people can run from home include:

How Do I Start a Small Business From Home in Pennsylvania

Persons interested in starting a home-based business in Pennsylvania need to get the following.

Business owners must first register their home businesses with the Internal Revenue Service and the Pennsylvania Treasury. The business will also require a business tax account to pay taxes to the IRS.

Business owners can check with the neighborhood zoning commission to obtain zoning permission for starting a home business. The administration of each municipality or county includes zoning commissions. Use the online resources of Pennsylvania’s counties or municipalities to find the zoning commission for the area where the home business will operate.

Businesses must also apply for licenses; certain cities require special licenses to be able to operate a business within them for example starting a home-based business in Philadelphia will require businesses to get a commercial activity license. Pennsylvania Open 4 Business is an online tool for residents of Pennsylvania who are thinking about starting a home business.  The tool provides information to Pennsylvania residents about state resources that are accessible, how to register a business, and whether financial incentives are offered in Pennsylvania for home-based businesses. Persons can also get information from IRS publications on starting a business from home.

Step 7: Legal Requirements for Starting a Business in Pennsylvania

How To Get an EIN Number in Pennsylvania

The IRS issues the nine-digit Employer Identification Number (EIN) to identify businesses and the kinds of tax returns they file. It may only be used for professional purposes. All firms must have an EIN, which they utilize for all transactions and communications with the IRS and Social Security Administration (SSA). persons can download Understanding the EIN which will give users a detailed explanation of tax ID number operation.

 An EIN can be requested by business owners via the Internet, phone, fax, or mail. The Internet is the most effective approach. The EIN is promptly issued following the validation of an online application.  Requestors must first finish the SS-4 form to apply for an EIN using any other means. If a request made by mail or fax is accepted and it is found that the company needs an EIN Number, it will take four working days and four weeks, respectively, to receive a response. Requests can also be made over the phone, however, the SS-4 form must first be completed to provide the information requested during the phone call. Fax and mail applications may be submitted to:

(For US applications)

Internal Revenue Service

ATTN: FIN Operation

Cincinnati, OH 45999

Fax: 855-641-6935

(For applicants with no legal residence or place of business in the US)

Internal Revenue Service

Attn:  EIN International Operation

Cincinnati, OH  45999

Fax: 855-215-1627 (within the U.S.)

Fax: 304-707-9471 (outside the U.S.)

How To Get a Pennsylvania Registered Agent

In Pennsylvania, a business does not need to designate a registered agent however a business must register with a commercial registered office address provider(CROP). The CROP is an agent authorized by a registered business to receive service of process on its behalf according to Pa.R.C.P. 423  of Pennsylvania civil procedure. The Pennsylvania Department of State keeps a list of CROP located in every county in Pennsylvania. Business owners can contact these agents to make a contract as their business CROP. Businesses risk both civil and criminal sanctions if they list a CROP address without first signing an agreement with the CROP.

Patents, Trademarks, and Copyrights in Pennsylvania

A trademark is a term, name, symbol, or other item that is traded with products to identify the source and set them apart from those of others. The Pennsylvania Department of State must receive a completed trademark registration form when registering a trademark in Pennsylvania. The application should include crucial information about the symbol or product per Title 54, chapter 7 of the Pennsylvania general assembly statute. After the date of registration, trademarks are in use for five years., An application must be submitted for renewal for a similar term after the end of the first term.

   A copyright is a set of legal privileges that immediately belong to anyone who produces an original work of authorship, such as a book, song, video, or piece of software. These privileges cover the ability to copy the work, create derivative works from it, distribute copies, as well as publicly perform and exhibit the work. Copyrights can be registered online with the U.S. Copyright Office registration portal.

A patent is a privilege bestowed by the government that enables an inventor to prevent others from manufacturing, using, selling, or importing their invention for a predetermined period following the date of filing—typically, 20 years. Trademarks can be registered online with the united states patent and trademark office by filling out the required application on the USPTO’s Electronic Filing System

Pennsylvania  Business Tax

The Pennsylvania Department of Revenue is taxed by setting tax rates for the different businesses in the state; Businesses are taxed according to the type of business structure and the goods and services they offer. The proper payment of federal, state, and local taxes is a crucial aspect of maintaining the company’s legal compliance as a Pennsylvania business owner. Pennsylvania business taxes include Sales and Use Tax; anyone bringing in retail sales of tangible personal property or taxable services from outside the state is required to collect sales and use tax. Every person who uses, leases, or rents tangible personal property in Pennsylvania must register with the state and acquire a current sales tax license. The state sales tax in Pennsylvania (PA) is presently 6%. The overall tax rate may reach 8%, depending on the local governments where the business is situated.

Cooperate Income Tax-Cooperations in Pennsylvania have to pay cooperate income tax. Pennsylvania has the second-highest corporate company tax rate in the US, but it’s a flat rate and doesn’t apply to not-for-profit organizations. The basic rate tax is 9.99% of the corporation’s federal taxable income.

Personal income tax-Single-member LLCs only have to pay the 3.07% personal income tax required by the state.

Are Business Records Public in Pennsylvania?

Yes, business records in Pennsylvania are public. Under Pennsylvania law, businesses registered in the state must file documents related to their primary activities with the Department of State’s Bureau of Cooperations and charitable organizations. The department is responsible for disseminating these records to the general public upon request. Business records can be requested in person, by mail, or through telephone. The bureau does not assess a fee for telephone information.

Pennsylvania business records can also be searched through the Bureau of Cooperations and charitable organizations database. A written request can be made for a business records search can be made to

Department of State, 

Bureau of Corporations and Charitable Organizations,

PO Box 8722, Harrisburg,

 PA 17105-8722

The name and address of the subject of the search must be included in the request letter.