Becoming a Sole Proprietor in Pennsylvania

Here is an outline of the steps you should follow to get started as a sole proprietor in Pennsylvania. You should also read the general section for information applicable in any state.

1. Choose a business name for your sole proprietorship and check for availability.

• Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.

• You can use the Search for a Business Entity page to check the availability of your desired name in Pennsylvania. The Name Availabilities page on the Pennsylvania Department of State's website has additional information.

2. Register the business name with local, state, and/or federal authorities.

• If you will be operating your sole proprietorship under a name that is different from your own name, then you will need to file a Application for Registration of Fictitious Name with the Pennsylvania Department of State. The filing fee is $70. You can either register your fictitious name online using the Online Business Registration Interview interface or download the appropriate form and mail it into the Department of State.

• Pennsylvania also requires that you publish an advertisement in two newspapers in the county where your business is located, stating that you have filed or intend to file a fictitious business name registration application. The advertisement must contain the following information:

• The fictitious name;
• The address, including street and number, if any, of the principal office or place of business of the business to be carried on under or through the fictitious name;
• The name and address, including street and number, if any, of the person filing the registration; and
• A statement that an application for registration of a fictitious name is to be or was filed "under 54 Pa.C.S. (relating to names)."

One of the newspapers must be a legal periodical or newspaper. If there is no legal periodical or newspaper published in the county, then two newspapers of general circulations are sufficient. If there is only one newspaper of general circulation in a county, advertisement in that newspaper is sufficient. The Department of State has a list of legal newspapers. Proof of satisfaction of the advertising requirement should not be submitted to the Department of State, but you should retain proof in your business records.

• Although you are not required to do so, you should consider registering your business name as a federal and/or state trademark. Please see the Trademark for Business Naming section for details.

3. Obtain any required local licenses.

• Please see the general section for details.

4. Determine what tax and other regulatory obligations your sole proprietorship has, and take care of any necessary registrations.

• If you have an employee or employees, you need to apply for an Employment Identification Number (EIN) from the IRS. You can apply for an EIN online. You may apply for an EIN even if you have no employees. Doing so may make it easier to open a bank account and reduce your risk of identity theft. There is no filing fee.

• If you have an employee or employees in Pennsylvania, you need to register for Pennsylvania employment taxes through the Online PA-100 interface or the Online Business Registration Interview interface.

• Whenever you hire an employee in Pennsylvania, you must inform both the IRS and the Commonwealth of Pennsylvania. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information on reporting new hires at the Pennsylvania New Hire Reporting website.

• If you have an employee or employees in Pennsylvania, you are required to carry workers' compensation insurance. The Pennsylvania Department of Labor & Industry administers the program.

• As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.

5. Open a bank account for your business.

• It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your business. The bank will probably require your Social Security Number or EIN and a copy of your business name filing, although you may not need any documentation if your business's name includes your surname. (Here is an example of what banks may require.)