Doing Business in Pennsylvania
All foreign associations, whether incorporated or not, are required to comply with Pennsylvania law governing corporations and unincorporated associations.[1] No type of foreign association or limited liability partnership may “do business” in Pennsylvania prior to obtaining licensure from the Department of State.[2] The foreign business must file with the department a “foreign registration statement” that includes the name of the business, the type of association (corporation, limited liability company, etc.), the jurisdiction of formation, the mailing address for the principal or office, and the address of its office in Pennsylvania.[3] The Department of State of Pennsylvania hosts a website that creates a “checklist” of requirements for any business to register in the Commonwealth and obtain a commercial activity license after providing some basic information about the foreign association.[4]
Several activities will not be considered doing business in Pennsylvania, which include: legal proceedings, internal affairs of the business carried out in Pennsylvania, selling through independent contractors, merely soliciting or obtaining business in Pennsylvania, securing or collecting debts, conducting an isolated transaction that is not in the course of similar transactions, and doing business in interstate or foreign commerce.[5] Unlike Virginia, D.C., and Maryland, Pennsylvania will not require a foreign association to register the business to maintain an action, which permits a foreign association to recover debt, enforce an obligation, or recover personal property entitled to the business under contract in Pennsylvania state courts.[6]
Material Supplier Deliveries
Similar to Maryland and D.C., Pennsylvania specifically excludes isolated transactions as well as activities in interstate commerce from its definition of “doing business” in the commonwealth.[7] These exceptions allow suppliers of goods to solicit orders for delivery in Pennsylvania without first registering the foreign company, so long as the supplier accepts the offer outside the commonwealth.[8] Failure to register as a foreign business in Pennsylvania will not prevent a supplier from collecting payment in Pennsylvania courts as long as the terms of the contract are finalized in the jurisdiction of the supplier.[9]
Pennsylvania Contractor Licensing Requirements
Pennsylvania does not have a state body governing licensure of general or specialty trade contractors, instead the commonwealth’s Construction Code Act (C.C.A.) dictates the general standards with which municipalities (counties or cites) must comply when licensing any contractor in a particular locality within Pennsylvania.[10] Those municipalities must comply with the C.C.A. when issuing a license to any type of contractor that works on construction, alteration, repair, or occupancy of any building located in the commonwealth.[11] The Department of Labor and Industry has the authority to review measures taken by municipalities in enforcing or administering the C.C.A. and may enforce compliance through state courts.[12]
General contractors and specialty trade contractors therefore need to be familiar with any licensing requirements imposed in the locality they provide those services. For example, Philadelphia requires contractors to provide a copy of the business’ commercial activity license, tax identification number, proof of insurance, and application fee of one hundred dollars ($100).[13]
[1] 15 P.S. §401 “Application of Chapter”
[2] 15 P.S. §411 “Registration to do Business in this Commonwealth”; see also, 15 P.S. §102 “Definitions”
[3] 15 P.S. §412 “Foreign Registration Statement”
[4]See, https://business.pa.gov/register/
[5] 15 P.S. §403 “Activities not Constituting Doing Business”
[6] 15 P.S. §403 “Activities not Constituting Doing Business”
[7] 15 P.S. §403 “Activities not Constituting Doing Business”; compare DC Code Section 29-105.05; Maryland Code Annotated: Corporations and Associations Section 7-103.
[8]Fredelle Footwear, Inc. v. Lou’s Shoe Bazaar, Inc., 63 Pa. D. & C.2d 367,368 (1973).
[9]New Jersey Steel Tube Co. v. Riehl, 9 Pa. Super. 220, 225 (1898).
[10] 35 P.S. §7210.104 “Application”
[11] 35 P.S. §7210.104 “Application” (exceptions to this general rule include utility and miscellaneous use structures that are accessory to detached one-family dwellings, agricultural buildings, or “temporary structures”)
[12] 35 P.S. §7210.105 “Department of Labor and Industry”
[13] Phila. Code § 9-1004. “Contractors”;