Does a Nonprofit Organization in Pennsylvania Require a Business License?

By Elizabeth Rayne

A business license is simply an issuance of permission to operate in the state. Although nonprofits do not transact business in the traditional sense, they must still obtain various permissions from the state of Pennsylvania to conduct their affairs. Depending on the type of nonprofit organization, required permits may include general licensing, occupational licensing, charity registration, local licensing, and foreign business licensing.

General Licensing

A nonprofit organization's "license," or authority, to operate in the state of Pennsylvania is its properly filed articles of incorporation. The articles of incorporation must include the names of the incorporators, the name of the nonprofit, and state its charitable purpose. The articles may also list the directors of the nonprofit and the duration of the business. Organizations are required to advertise their intention to incorporate in two local newspapers. The articles are filed with the Pennsylvania Department of State with the appropriate fee. Once the state accepts and approves the articles, the nonprofit has the authority to operate in the state of Pennsylvania.

Occupational Licensing

Depending on the type of business you are operating, you may be required to obtain a professional license. Occupations that require licensing include legal services, accounting and most health-related professions. You must contact the specific state board that pertains to your profession to determine the licensing requirements. For general information about professional occupations, or to determine if a profession requires a license, you can contact the Pennsylvania Bureau of Professional and Occupational Affairs.

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Charity Registration

The nonprofit must file a charitable organization registration statement with the Pennsylvania Bureau of Charitable Organizations for permission to solicit donations from Pennsylvania residents. Religious institutions and public charities that receive contributions of less than $25,000 per year are excluded from this requirement; they do not need permission to solicit donations. Additionally, professional solicitors and professional fundraising counsels who are paid to raise funds for organizations must register with the Pennsylvania Bureau of Charitable Organizations before they are allowed to raise funds.

Local Licensing

If a nonprofit has a physical location in a particular Pennsylvania town or county, it may need a local business license or permit. Some counties require that all businesses, including nonprofits, apply for a business permit. Certain businesses may require additional permits, such as child care facilities, food vending businesses, or tobacco-related companies. Further, permits are required whenever new construction takes place.

Foreign Business Licensing

If your nonprofit organization is registered in another state, you must obtain a certificate of authority from the Secretary of the Commonwealth to have permission to conduct business in Pennsylvania. The application for a certificate of authority must be filed with the Secretary, accompanied by a docketing statement. Nonprofit organizations must publicize their intent to apply for a certificate of authority in two Pennsylvania newspapers.

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A sole proprietorship is a common business entity because it is relatively simple to set up and allows for a great deal of flexibility in how the business is managed. As a sole proprietor, you have complete control over the management of the business, take all the profits and avoid corporate income taxation. Although there are no registration requirements to initially form a sole proprietorship in Georgia, depending on the type of business, the Georgia Secretary of State recommends professional, local and tax registration.

How to Obtain a Trade Name in Pennsylvania

A trade name, known as a fictitious name in Pennsylvania, is an assumed name that a business uses to conduct business that is different than its legal name. For example, if you want your business to be known as Exquisite Assortments, you have to register "Exquisite Assortments" as your fictitious name. Registration of a fictitious name does not provide a business entity with exclusive rights to use the name. However, you cannot register a fictitious name that conflicts with an already-registered name. In Pennsylvania, trade name registration is handled by the Department of State and requires two parts: submitting an application and publishing your fictitious name in the county in which you will do business.

How Can a Nonprofit Change Its Name?

A nonprofit is organized under state law as either a corporation or an unincorporated association. A corporation, the most common structure, has strict organizational, reporting and registration requirements. An unincorporated association is an informal group of two or more people working for social good. For both forms, changing the nonprofit organization's name requires the approval of the people who run the nonprofit or its members. A name change can have repercussions that affect donors and fundraising.

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