How to Start an LLC in Virginia
One of the first steps of any business journey is to actually form a legal business entity, whether that’s a sole proprietorship, LLC, or corporation. LLCs are a very popular option because they provide some liability protection for owners in case the business is ever sued. This guide will cover the process of how to start an LLC in Virginia.
For VA entrepreneurs, forming an LLC in Virginia will require working with the Virginia State Corporation Commission. This guide will show you all the steps required to form a Virginia limited liability company.
Consider utilizing an LLC formation service
If you want the simplest, quickest process possible, it’s a good idea to use a business formation service. These companies help entrepreneurs form new business entities by guiding them through the state-required formation process. The process is handled online and is simple and efficient – plus, if you have any questions, you will be able to contact customer support representatives.
If you choose to do the work on your own instead, you will need to follow the instructions below.
Name your new company
The next step is to decide on what you want to name your new business. You need to choose the formal business name that you will use for your LLC, but the use of trade names (see below) does provide some flexibility in how you brand your business in the future.
There are some criteria that must be satisfied when it comes to naming your business. The full rules are laid out by these State Corporation Commission guidelines. The main rules are that the name must contain “limited liability company”, or one of the abbreviations like “LLC” or “L.L.C.”, and that the name must be unique from other business names in the state. You can search a database of all business entities in VA here.
Once you select a name that is available and meets the other criteria, you can move on to the next step. If you’re not yet ready to form the LLC but want to save the name, you can reserve the name for 120 days for a filing fee of $10.
Using a fictitious name in Virginia
Once your LLC is registered, you can also register a fictitious name – or multiple – for your business. These are secondary names that you can legally do business under, once they are registered. But registering for a fictitious name is just one simple form, instead of the entire process of starting a new LLC. The fictitious names are essentially “attached” to your existing business entity.
The use of fictitious names (called DBAs or trade names in most states) allows for more flexibility in branding and marketing your company. And if you expand to a new location or even a new business activity, you can probably continue operating under your current LLC and just add a trade name. The option of using trade names also reduces the pressure to find the “perfect” LLC name for your business.
Appoint a registered agent
Every Virginia LLC must appoint a registered agent for its business. This can be any individual who lives in Virginia and has a physical mailing address (no PO boxes). It can also be a company that is licensed to do business in the state.
The registered agent’s main role is to receive notice of lawsuits and other legal documents, on behalf of the company. If the business is ever sued, the notice will be sent to the registered agent.
Most entrepreneurs either serve as their own registered agent, or they use a professional registered agent service. Services are a good option, as they protect the owner’s privacy and ensure professional handling of all important mailings and notices.
ZenBusiness is a great choice, and they even include the first year of registered agent service for free if you use their LLC formation packages (starting at $49).
Northwest Registered Agent is another good option for a registered agent service, which provides personalized service.
You will need the name and address of the registered agent in order to move on to the next step.
Complete an LLC operating agreement
Note: This step is optional, but recommended.
Virginia does not require an operating agreement, but it is still wise to have one. This document lays out details about how your company will be run, as well as the key rights and responsibilities of owners and LLC members. Thus, it’s particularly important for LLCs with multiple members/owners.
Operating agreements are not submitted to any government agency – instead, they are simply kept on file with the business itself.
You can use an operating agreement template provided by a service like ZenBusiness if you use them to form your LLC in the first place. Or, you could work with a local attorney to draft a custom agreement.
File Articles of Organization
To formally establish an LLC in Virginia, you must file the Articles of Organization with the State Corporation Commission. This can be done through the mail or online; in either case, the filing fee is $100.
To file online
File online with the State of Virginia. Pay the $100 Virginia LLC fee online.
To file by mail
Download and fill out the Articles of Organization. Include a $100 check or money order, made payable to the State Corporation Commission. Then mail the document and payment to:
State Corporation Commission
P.O. Box 1197
Richmond, VA 23218-1197
Once submitted, you will need to wait for Virginia to process the documents. This can take up to a week or two, depending on how many applications are already in the processing queue.
Apply for an EIN
EINs aren’t technically required, but they are very important for so many business activities that they may as well be mandatory. You need an EIN before you can hire employees, or even open a bank account in most situations.
EIN stands for employer identification number. It’s essentially like a social security number, but for your business. It’s used to identify your company on tax filings and when you hire employees.
Simply fill out this application on the IRS website to apply for an EIN. There is no cost for this application, and the number is typically issued immediately.
Apply for business licenses & permits
You may need to apply for various business licenses and/or permits before you can legally do business in Virginia. This is an addition to the actual formation of your LLC. The formation process establishes the LLC as a business entity but does not necessarily satisfy all the requirements of legally operating that business.
There are requirements on the state level, as well as the federal and city/county local levels. Specifics will vary depending on what type of business you run and where you operate. Below is an overview, but you will need to do your own research to ensure you meet all the requirements.
Virginia may require business licenses or permits for your company in some situations. You can find an overview of available permits here. The Department of Professional and Occupational Regulations has more detail as well. You will also need to register tax accounts for unemployment insurance tax and employer withholding tax.
Finally, you have local-level requirements. Most counties will require a general-purpose business license, meaning every business must get one regardless of industry. Some cities require their own licenses. And there are specialty permits – such as health permits or liquor licenses – that are handled on the local level and/or the state level.
Keep your business in good standing
Beyond the initial formation process, you must complete various requirements for ongoing compliance. This means keeping up with annual reports, filing taxes, and renewing your permits and licenses.
Where things can get a bit complex is when you start thinking about requirements on each level of government. You will need to satisfy criteria on the federal level, state level, and local level (city and county). Because of the mash-up of requirements, it’s important to plan ahead so that you don’t miss anything.
The requirements that your business faces will depend on where you operate, as well as what industry you are in and how regulated it is. Here are some of the most common requirements that the majority of businesses will face:
- Virginia LLC annual registration fee – due every year for all LLCs ($50). Virginia does not require an annual report, but you must pay the registration fee.
- State tax returns
- Federal tax returns
- Local tax returns
- State payroll taxes/employer taxes
- Federal payroll taxes/employer taxes
- Annual renewals of business licenses
- Annual renewals of permits and professional licenses
- Ongoing need for a registered agent (you must always have an agent on file with an up-to-date mailing address)
- Much more
This list is far from complete, so you will need to research specifics for your business. Check with officials on the state and local level, and ensure that you are meeting all federal reporting and regulation guidelines as well.
Open a business bank account
Once you have your EIN (as well as a business license and some money for an opening deposit), you can open a bank account for your business. And you should do this as soon as possible once your business is formed.
Once you have a business bank account, use it exclusively for all business-related transactions. Keep using your personal bank account for all your personal transactions. In this way, you can completely separate business and personal finances, which is better for business accounting purposes.
Each bank or credit union will have slightly different requirements and criteria for opening a business bank account. Contact the bank ahead of time to check what you will need to bring in with you.
At this time, you may also wish to seek our business insurance, a line of credit, and/or other financial tools for your new company.
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