Introduction
Pennsylvania has recently implemented significant changes to its business laws, impacting companies of all sizes across the state. Whether you are a small business owner or managing a large corporation, it is crucial to understand these changes to remain compliant and enable your business to seize new opportunities. In this article, we will disclose key changes and what they mean for your business.
Annual Report Filing in 2024
In November 2022, changes were signed into law as Act 122, updating Title 15 of the Pennsylvania Consolidated Statutes, frequently referred to as the Associations Code.
One substantial change that will affect every business entity is the shift from decennial filings (every 10 years) to annual filings. Beginning in 2024, all Pennsylvania domestic filing entities, registered foreign entities, and general partnerships are required to submit an annual report with the Pennsylvania Department of State. The filing deadline is controlled by the type of entity:
Corporations, both domestic and foreign, for profit and nonprofit, are required to file prior to June 30.
Limited liability companies, both domestic and foreign, are obligated to file prior to September 30.
All other entities required to file annual reports must do so on December 31 or prior.
New entities must first file in the calendar year following the year they become subject to the filing requirements.
The annual report must contain:
- the entity name and the jurisdiction in which it was formed
- the address of its registered office
- the name of at least one governor (The person in charge)
- the names and titles of all the principal officers
- the address of its principal office location, including the street and number
- its entity number or identifier issued by the department
Updates to the Business Corporation Law (BCL)
One of the most noteworthy changes is the amendment to the Business Corporation Law (BCL). The new provisions focus on simplifying the process of forming and managing a corporation in Pennsylvania. Key changes include:
Streamlined Registration Process: The process for registering a new corporation has been simplified, reducing the paperwork and time required to get a business launched.
Easier Amendment Procedures: The law now allows for easier amendments to corporate documents, enabling businesses to adapt more quickly to changing market conditions.
Enhanced Protections for Minority Shareholders: New provisions have been added to protect minority shareholders, ensuring fair treatment and dispute resolution.
Modifications to Limited Liability Company (LLC) Laws
LLCs in Pennsylvania will also see several updates, making this business structure even more flexible and attractive. The key changes include:
Simplified Operating Agreements: The requirements for LLC operating agreements have been relaxed, giving members more freedom to define their internal rules and management structure.
Default Rules for Dissolution: The new law introduces default rules for the dissolution of LLCs, which will apply if the operating agreement does not specify otherwise. This is intended to provide clarity and reduce potential disagreements.
Enhanced Liability Protections: Members of LLCs now enjoy enhanced liability protections, further separating personal assets from business liabilities.
Conclusion
The recent changes to Pennsylvania’s business laws represent bring new opportunities for businesses to thrive. They also require careful attention to ensure compliance. By remaining informed and adapting to these changes, your business can navigate the evolving legal environment and continue to succeed in Pennsylvania’s dynamic economy.
If you still have questions about how these changes might impact your business or need assistance with legal compliance, don’t hesitate to consult Sher & Associates P.C. at info@sherpc.com or call (610) 683-0771.