Pennsylvania S Corporation Formation

When you form your S Corporation in Pennsylvania, you’ll first submit Articles of Incorporation to the Corporation Bureau of the Department of State. You may wish to review sample Pennsylvania Articles of Incorporation. When they file your Articles and record your information, you’ll then be a legal corporation. The “S” status is a distinction at the IRS level and determines how your corporation will be taxed.

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Steps to Forming a Pennsylvania S Corporation

The Articles of Incorporation that you submit to the Secretary of State should include the following information:

  • Name: You must list the name of your corporation. That name must be distinguishable from other names on file with the Corporation Bureau. Additionally, some words, if present in your name, may require permission from certain professional or occupational boards. In order to avoid any surprise rejections due to name availability issues, you may want to have perform a corporate name search for availability for you.
  • Registered Agent: You will list either a commercial registered agent and their county, or a noncommercial registered agent and their address. If using a noncommercial registered agent, the address must be a physical address (and not a PO Box or other mailing address) and must be within the state of Pennsylvania.
  • Business Incorporation Law: You must include the following statement in your Articles: “The corporation is incorporated under the provisions of the Business Corporation Law of 1988.”
  • Shares: You must enter a number no lower than 1 to indicate how many shares your company is authorized to issue.
  • Incorporator: The person who drafted the forms should list their name and address. This may or may not be someone otherwise affiliated with the company (as an officer, director, etc.).
  • Additional Provisions: If you have any information you wish to be included in the Articles that is not addresses in the clauses above, you can attach them to the form.
  • Signature: The incorporator must sign and date the form.

It’s important that the Secretary of State has current information for you at all times. If any of the information in your Articles changes, you will need to file an amendment to those Articles to make sure the State has up-to-date information for your business.

ClickAndInc can prepare and file your Pennsylvania Articles of Incorporation for you quickly, accurately, and affordably.

Further Responsibilities of a Pennsylvania S Corporation

After your Articles of Incorporation have been filed, you have 75 days to file an S Corp Election Form (form 2553) with the IRS. This form will give you S Corporation status and allow you to be taxed accordingly.

Pennsylvania requires all corporations to submit annual filings. Failure to do so may result in your active status being revoked.

More Information about a Pennsylvania S Corporation

Your Pennsylvania S Corporation:

  • Can have up to 100 owners/shareholders, but no more
  • May deduct the cost of benefits provided to employers (such as parking permits, health insurance, and so on)
  • Has a board of directors, which oversees the policies of the corporation
  • Cannot have more than one class of shares
  • Issues limited liability for owners
  • Must be owned by US citizens or resident aliens
  • Is taxed as owners’ income, not as a separate entity
  • Allows business losses to be deducted on the owners’ individual tax returns
  • Must pay payroll tax

For S corporations, only the salary paid to the owner-employee is subject to employment tax. The remaining income that is paid as a distribution is not subject to employment tax under IRS rules. Therefore, an owner of an S corporation stands to realize substantial employment tax savings. However, the salary you give yourself must not be artificially low; if the IRS finds your salary unreasonable, they may reclassify some of the distribution funds as salary and require you to pay taxes on it.

Pennsylvania Startup Quicklinks

For information on other types of businesses in Pennsylvania, please explore the links below.

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