There are specific actions you must take if you are a foreign firm doing business in Pennsylvania and have made the decision to leave the state in order to ensure a seamless and lawful withdrawal. In addition to providing answers to some frequently asked concerns about LLC ownership, sole proprietorships versus LLCs, converting a sole proprietorship to an LLC, and domesticating an LLC in Pennsylvania, this article will walk you through the process of withdrawing your foreign corporation from Pennsylvania.
You must submit a Certificate of Withdrawal to the Pennsylvania Department of State in order to withdraw your foreign corporation from Pennsylvania. You can acquire this form by mail or by downloading it from the Department of State’s website. You must fill out the form with information about your corporation, including its name, state of registration, date of establishment, and registered agent’s name and address in Pennsylvania. A declaration confirming that your company has stopped conducting business in Pennsylvania, is not currently involved in any legal processes, and has paid any taxes and fees owed to the state are also required.
Your Certificate of Withdrawal must first receive tax clearance from the Pennsylvania Department of Revenue in order for the Department of State to accept it. This implies that you must make sure that all state taxes, including the employer withholding tax, capital stock/foreign franchise tax, sales and use tax, and corporation net income tax, have been paid or that the Department of Revenue has waived its right to collect them. You must submit a Form REV-181, Application for Tax Clearance Certificate, to the Department of Revenue in order to acquire tax clearance.
You can submit your completed Certificate of Withdrawal to the Department of State once you have received tax clearance. The Commonwealth of Pennsylvania must receive a check or money order for the $70 filing fee. If everything is in order, the Department of State will examine your filing and issue a Certificate of Withdrawal.
You must cancel any business licenses or permits your corporation may have gotten from Pennsylvania once you have received your Certificate of Withdrawal. Any registrations for state taxes, such as the sales and use tax, employer withholding tax, and unemployment compensation tax, must be canceled in this process. Additionally, you might need to revoke any local business licenses or permissions your company may have acquired. Related queries are:
The ownership of an LLC is not public knowledge in Pennsylvania. However, by using the Pennsylvania Department of State’s online business entity database, you may find out some details about an LLC, including its name, registered agent, and the date it was established. By asking the LLC itself for a copy of its operating agreement or articles of organization, you can also find out more specific information about an LLC.
Several factors, including the size and type of your firm, your worries about personal liability, and your tax situation, will determine whether an LLC or sole proprietorship is appropriate for your company. In general, an LLC offers greater managerial and tax flexibility as well as more liability protection than a sole proprietorship. Nevertheless, establishing an LLC could require more paperwork and costs than doing business as a sole proprietorship.
It is a rather simple process to convert a single proprietorship to an LLC. The Pennsylvania Department of State must receive your articles of organization, and you must apply for a new Employer Identification Number (EIN) with the IRS. Additionally, you must draft an operating agreement for your LLC and transfer all assets and liabilities from your sole proprietorship to your LLC. Although this process could need some legal and accounting support, it is not particularly challenging.
LLC domestication, which is the process of moving an LLC from one state to another while preserving its initial legal existence, is not permitted in Pennsylvania. The assets and liabilities of your existing LLC can be transferred to the new one by creating a new LLC in Pennsylvania. As an alternative, you can maintain its status as a foreign LLC in Pennsylvania and register your previous LLC there.
Yes, single member LLCs are recognized in Pennsylvania. A single member LLC is recognized as a disregarded entity for taxation purposes, which means that the owner’s personal tax return should be used to record the LLC’s earnings and deductions. The LLC nevertheless offers the owner a degree of limited liability protection.