Moving To Philadelphia – For Entrepreneurs
We are fortunate to meet so many newcomers to the state of Pennsylvania, particularly here in Philadelphia. Many are attracted by the lifestyle and business opportunities available and today, I’d like to share just a bit of insight with entrepreneurs who want to come to our state to live and work here.
Real Estate in Philadelphia:
You might love Philadelphia for its lifestyle and location and are wondering how this choice will affect your business, particularly if team members have to relocate here, or if we consider the overall cost of living. Well the good thing is that housing in Philadelphia, PA is slightly competitive on a national scale, scoring 48 out of 100. Now if we consider office space, a fast-moving entrepreneur may see opportunity in the fact that the pandemic may well have created a temporary lull in demand, which according to sources, created a fiscal issue for the local government. That means that if we’re talking commercial real estate, the market is not overheated, leaving space for capital growth, particularly once working from home goes out of fashion again.
Starting a business in our state:
In the State of Pennsylvania starting an LLC is as simple as filing a Certificate of Formation with the Department of State, which costs a mere $125. This is the officially recognized document that will create your company as an LLC in the eyes of Pennsylvania law. This article will walk through the other requisite steps in order to get your LLC up and running.
A Suitable Name
When deciding upon a name for your Pennsylvania LLC, owners need to resist the temptation to focus solely on the catchiness of a name, as there are legal naming requirements for LLCs in Pennsylvania that need to be considered. In addition to others, LLCs should be aware of the following important naming regulations:
- The use of words such as ‘university’, ‘attorney’, and ‘bank’ (among others) form a list of restricted words that require an LLC to have additional paperwork, and sometimes even an officially licensed practitioner of that industry, in order to use them in their name
- Similarly, LLCs are not permitted to use any words that might lead to some mixup between your company and a branch of government
- All LLCs must have the term “limited liability company” in their name, either in full or shortened as just “LLC”
- A new LLC’s name must be adequately distinct from that of any pre-existing LLC in the state of Pennsylvania
Prospective business owners can check if their desired name is available for use with a quick search on the Pennsylvania Secretary of State website.
All LLCs in Pennsylvania are required to elect the address of a registered office. A registered office, which is commonly referred to as a ‘registered agent’ in many other states, represents an LLC’s official mailing address for all important correspondence between the state and your company. This could include legal notices, tax information, or state filings.
It is a legal requirement that your registered office’s address is based in Pennsylvania.
File Certificate of Organization
An LLC is officially registered when it files its Certificate of Organization plus its Docketing Statement to the Pennsylvania Department of State. It is also recommended that LLCs take advantage of this time to find an answer to the important decision of whether they want to be managed by their members or managers.
Usually, this process of filing the certificate will only take 2-3 days and can be completed both online and by post.
Image Credit: TRUiC
Create An Operating Agreement
This next step is not a legal requirement in the state of Pennsylvania (though it is in a number of other states). That said, it is extremely useful and helpful to a business in the future if they set out this document from the start.
An operating agreement is a document that contains a number of important details pertaining to the business, namely its ownership status and policies of operation. Establishing this from the get-go is incredibly productive for businesses since it forces the owners to confront potentially big issues in a non-risk setting to preclude future conflict over the same topics had no agreement been formed beforehand.
There are a number of templates available online that can provide your LLC with a good starting point for your own operating agreement. Another key point to note is that the operating agreement does not need to be filed with the state, it is a document for your business to keep internally so that they can freely refer to it in the future should they need it.
Get Your LLC EIN
The final step before your business can set off on its corporate journey is to apply for an Employer Identification Number (EIN) from the IRS. This nine-digit number enables the tax authority to keep tabs on businesses and ensure their affairs are in order; it is the business equivalent of a social security number.
This is simple plus free to obtain and allows LLCs to open a business bank account in their own names as well as hire their own employees. As you can see, forming an LLC in Pennsylvania is a relatively straightforward process that is only composed of five steps. TRUiC’s comprehensive article on the subject of how to form an LLC in Pennsylvania is a great resource for further information.
Final take on your move to Philadelphia:
You will find that real estate in Philadelphia is an attractive option both for private and commercial purposes. Families love our city because it has all the benefits of a large city, yet it has the small town features in terms of architecture and design. Higher education in Philly has a renowned reputation and we expect that the international student market will bounce back strongly as the world moves on from the pandemic. Being so close to New York and other vital parts of the U.S. and buying into a city that had a stable population graph versus the rapid rises in Texas or dramatic falls in Chicago, might be the perfect next move for your business and family.