How to Move an LLC to Pennsylvania

An out-of-state LLC, also called a foreign LLC, can change its state of organization to Pennsylvania through statutory domestication under the Pennsylvania Uniform Limited Liability Company Act of 2016. The process requires a plan of domestication custom-drafted to comply with both Pennsylvania law and the law of the state the LLC is leaving, along with coordinated filings in both states.

Whether the domestication can proceed also depends on the laws of the state the LLC is leaving. Both states must permit the transaction for the domestication to be available. To find out whether your LLC qualifies and what the process involves, request a free analysis of your LLC move.

After domestication, the LLC keeps its formation date, employer identification number, existing contracts, property, bank accounts, and employees. The domestication changes the LLC’s legal home state without interrupting business operations.

Why Business Owners Move LLCs to Pennsylvania

A Pennsylvania LLC domestication may make sense if a business owner moves to Pennsylvania or if the owners prefer to have Pennsylvania law govern the company. An owner might transfer an LLC to Pennsylvania for any of the following reasons:

• Convenience. Owners who move to Pennsylvania may find that it is more convenient for the LLC to be primarily governed by the jurisdiction where the owners live.
• Reduced reporting. Pennsylvania does not require LLCs (other than restricted professional LLCs) to file annual reports. Instead, Pennsylvania LLCs submit a decennial filing every ten years. An LLC that domesticates to Pennsylvania and no longer has to file in the original state will avoid the time and expense of annual filings.
• Tax savings. A business can reduce its overall tax bill by limiting the number of states in which it must pay taxes. Domestication to Pennsylvania may let an LLC avoid taxation by the original state if it results in an insufficient connection, or taxable nexus, between the state and the business. Pennsylvania usually ranks about average in state business tax rankings but compares favorably to other states in the Northeast.
• Legal advantages. A Pennsylvania LLC domestication might be a wise business decision if Pennsylvania law offers advantages over other states. For example, Pennsylvania may have a more flexible system for LLC management or profit distribution than the original state. Pennsylvania also has multiple tax-credit and grant programs for businesses involved in certain fields.
• Easier hiring of professionals. Legal systems and tax rules are mostly state-specific. A business that needs an accountant, lawyer, or other professional needs someone familiar with the right state’s law. Domesticating an out-of-state LLC to Pennsylvania can help owners who live in Pennsylvania more easily find local professionals with the right expertise.

Who Can Domesticate an LLC to Pennsylvania

Pennsylvania LLC domestication is available for LLCs formed in states that authorize the process. An LLC domesticating to Pennsylvania must comply with both Pennsylvania law and the current state’s law.

The current state’s law governs whether the LLC can domesticate to Pennsylvania (the state must authorize domestication), the content of the written plan of domestication if required, the standard under which the LLC’s members or managers must approve the plan, and the effective date for the domestication.

The principal eligibility requirement is that the LLC’s current state must authorize domestication. Not all states do, and the current state may call the process domestication, conversion, or another name. The state must have a statutory procedure that lets an LLC change its domicile to a new state.

Business owners must also review the LLC’s articles of organization and operating agreement to ensure there are no provisions that prevent domestication to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

An out-of-state LLC must confirm that Pennsylvania permits LLCs to engage in the company’s field of business. Pennsylvania allows most business areas other than acting as an insurance company. If the LLC provides professional services (services requiring a license or comparable authorization), it must qualify as a professional company under Pennsylvania law, which imposes additional requirements.

If Pennsylvania prohibits the type of business in which the LLC is engaged, the LLC should not domesticate to Pennsylvania.

Statutory Framework for Pennsylvania LLC Domestication

Pennsylvania’s domestication provisions are not in the state’s LLC act. The authorization for LLC domestication is in Title 15 of the Pennsylvania Consolidated Statutes (the Associations Code), Chapter 3, Subchapter G, which governs entity transactions for all business entity types. The LLC act itself, the Pennsylvania Uniform Limited Liability Company Act of 2016 (15 Pa.C.S. ch. 88, §§ 8811–8898), governs the LLC’s internal affairs after the domestication takes effect but does not contain the domestication procedures.

The key provisions that apply to a Pennsylvania LLC domestication are:

• 15 Pa.C.S. § 371(b) authorizes inbound domestication, allowing a foreign entity to become a Pennsylvania entity of the same type.
• 15 Pa.C.S. § 371(a) authorizes outbound domestication, allowing a Pennsylvania entity to become an entity of the same type in another state.
• 15 Pa.C.S. §§ 372 through 375 supply the procedural requirements, including the plan of domestication, member approval, and the statement of domestication filed with the Pennsylvania Department of State.
• 15 Pa.C.S. § 136(c) sets the effective date for filings with the Department of State, including the statement of domestication.

An LLC domesticating to Pennsylvania must satisfy both the transaction mechanics in Chapter 3 and the formation and governance requirements in Chapter 88. Chapter 3 authorizes and structures the domestication itself; Chapter 88 defines what a Pennsylvania LLC is and how it operates once the domestication is complete.

Documents Required for Pennsylvania LLC Domestication

A Pennsylvania LLC domestication requires several documents that must satisfy both states’ requirements. The following documents govern the transaction and control the company after the domestication takes effect.

• Plan of Domestication. A plan of domestication designed to comply with the requirements of both Pennsylvania law and the law of the state that the LLC is moving from. The plan authorizes and governs the domestication transaction and must be custom-drafted to satisfy both states’ requirements simultaneously.
• Statement of Domestication. The statement of domestication filed with the Pennsylvania Department of State’s Bureau of Corporations and Charitable Organizations. The statement must be signed by an authorized person.
• Certificate of Organization. The formation document required under the Pennsylvania Uniform Limited Liability Company Act of 2016 to establish the LLC as a domestic Pennsylvania entity. The certificate of organization is filed with the Pennsylvania Department of State along with the statement of domestication.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, or a similar term.
• Pennsylvania Operating Agreement. A state-specific operating agreement to properly structure the LLC as a Pennsylvania LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Pennsylvania organizational documents as the LLC’s governing documents.

Pennsylvania law permits electronic signatures on the statement of domestication and certificate of organization. The Pennsylvania Department of State accepts e-filed copies of electronically signed documents.

The documents above reflect Pennsylvania’s domestication requirements. The LLC’s current state imposes its own documentation requirements, including a plan of domestication or similar document approved by the LLC’s members or managers. Both states’ requirements must be satisfied for the domestication to be complete.

How to File a Pennsylvania LLC Domestication

Filing a statement of domestication with the Pennsylvania Department of State establishes the company as a Pennsylvania domestic LLC. The domestication proceeds through the following steps:

• Conducting a preliminary name search with the Bureau of Corporations and Charitable Organizations to confirm the LLC’s name is available in Pennsylvania.
• Obtaining signatures on the statement of domestication and certificate of organization from an authorized person.
• Filing the statement of domestication and certificate of organization with the Pennsylvania Department of State.
• Filing domestication documents with the departing state’s filing agency.

The Pennsylvania Department of State processes domestication filings in the order received. The Department suggests allowing 15 days for filed documents to be processed. The domestication becomes effective on the date the statement of domestication is delivered to the Pennsylvania Department of State, unless the statement specifies a later effective date. For a detailed breakdown of each phase in the domestication timeline, see how to move an LLC through the domestication process.

Cost of Moving an LLC to Pennsylvania

The cost of moving an LLC to Pennsylvania depends on the scope of work involved. The documents and filings described above require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity. To find out what your specific move will cost, request a free analysis of your LLC move.

In addition to professional service costs, the Pennsylvania Department of State charges a $70.00 filing fee for the Statement of Domestication and a $125.00 filing fee for the Certificate of Organization. The total Pennsylvania filing fee for inbound domestication is $195.00. The fees paid to Pennsylvania are in addition to any filing fees that must be paid to the LLC’s original state.

Pennsylvania LLC Laws That Apply After the Move

The Pennsylvania Uniform Limited Liability Company Act of 2016 imposes ongoing requirements on all domestic LLCs, including those formed through domestication from another state. An LLC that domesticates to Pennsylvania becomes subject to these obligations immediately upon effectiveness of the domestication.

Pennsylvania Decennial Report and Compliance Requirements

Pennsylvania does not require LLCs (other than restricted professional LLCs) to file annual reports. Instead, Pennsylvania requires domestic LLCs to file a Decennial Report with the Pennsylvania Department of State every ten years. The filing fee is $70.00.

Pennsylvania LLC Operating Agreement Requirements

Pennsylvania refers to an LLC’s internal governance document as an operating agreement. The operating agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The operating agreement is not filed with the state; it is maintained by the LLC as a private document.

Pennsylvania Registered Office Requirements

Pennsylvania does not require LLCs to appoint a registered agent, as many states do. Instead, Pennsylvania requires LLCs to designate a registered office where service of process may be delivered.

An LLC without a Pennsylvania location can hire a commercial registered office provider. The fee is typically $100.00 to $200.00 per year.

Moving an LLC Out of Pennsylvania

Pennsylvania permits outbound LLC domestication, provided the destination state also authorizes the procedure. The outbound LLC must file a statement of domestication with the Pennsylvania Department of State’s Bureau of Corporations and Charitable Organizations, accompanied by a plan of domestication approved by the LLC’s members or managers. Pennsylvania does not require a separate certificate of surrender; the statement of domestication completes the Pennsylvania side of the transaction.

The Pennsylvania Department of State charges a $70.00 filing fee for the outbound statement of domestication. The destination state will require its own formation and domestication documents and will charge separate filing fees.

Alternatives to Pennsylvania LLC Domestication

When domestication is not available because the other state’s law does not authorize it, a merger-based reorganization achieves the same result. The reorganization involves forming a new Pennsylvania LLC and merging the out-of-state LLC into it, with the Pennsylvania LLC as the surviving entity. The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law.

The Pennsylvania Department of State charges a filing fee of $150.00 for the merger filing, in addition to the $125.00 formation fee for the new Pennsylvania LLC. For a detailed explanation of how the reorganization process works, see our guide to LLC reorganization.

For a state-by-state comparison of LLC domestication and conversion laws across all states, see our guide to LLC domestication and conversion by state.