Form a S-Corp in Pennsylvania
Everything you need to know about forming a S-Corp in Pennsylvania. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Corporate Name
Select a unique business name that includes a required designator such as 'Inc.', 'Incorporated', 'Corp.', or 'Corporation'. Search the Pennsylvania Department of State's business name database to confirm availability before filing.
30 minutes
Appoint a Registered Agent
Designate a registered agent with a physical Pennsylvania street address (P.O. boxes are not permitted) to receive legal documents and official state correspondence on behalf of the corporation. The agent can be an individual resident or a qualified commercial registered agent service.
1-2 hours
File Articles of Incorporation
Prepare and file the Articles of Incorporation (DSCB:15-1306) with the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations. The form requires the corporate name, registered office address, registered agent name, and the name and signature of the incorporator.
1-2 hours
Adopt Corporate Bylaws
Draft and adopt corporate bylaws that outline the internal governance rules of the corporation, including procedures for shareholder and director meetings, officer roles, and voting rights. While not filed with the state, bylaws are legally required under Pennsylvania law and should be kept at the principal office.
2-4 hours
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •Hold Organizational Meeting — Conduct an initial organizational meeting of the board of directors to formally adopt bylaws, elect officers, authorize the issuance of stock, and handle other initial corporate matters. Document all decisions with formal meeting minutes.
- •Issue Stock to Shareholders — Issue stock shares to initial shareholders and maintain a stock ledger. For S-Corp eligibility, the corporation may have no more than 100 shareholders, only one class of stock, and all shareholders must be U.S. citizens or permanent residents.
- •File IRS Form 2553 for S-Corp Election — Submit IRS Form 2553 (Election by a Small Business Corporation) to the Internal Revenue Service to elect S-Corporation tax status. The election must be filed no later than two months and 15 days after the beginning of the tax year in which it is to take effect, and all shareholders must sign the form.
Advantages
- ✓Pass-through taxation avoids federal double taxation, with income and losses flowing directly to shareholders' personal returns
- ✓Pennsylvania does not require an annual report or annual franchise tax, reducing ongoing compliance costs compared to many other states
- ✓Shareholders who are active in the business may reduce self-employment tax liability by splitting income between reasonable salary and S-Corp distributions
- ✓Provides limited liability protection, shielding shareholders' personal assets from corporate debts and legal judgments
Considerations
- •S-Corp election imposes strict IRS eligibility restrictions, including a maximum of 100 shareholders, only one class of stock, and no non-resident alien shareholders
- •Pennsylvania's 3.07% personal income tax applies to S-Corp distributed income, and the state does not offer preferential capital gains rates, increasing the overall tax burden
- •S-Corporations require more formalities than LLCs, including maintaining bylaws, holding board and shareholder meetings, recording minutes, and following strict corporate governance procedures
Annual Obligations
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