For many individuals who are new to entrepreneurship, the easiest and fastest option to start a business in Virginia is an LLC formation. This business entity structure is ideal for most startups, especially small- and medium-sized companies. The advantages, protection, and flexibility that it offers make it an appealing choice.
Generally, LLC formation comes with multiple benefits. Some of them are the following:
- It separates and limits the personal liability of the business owner from the liabilities and debts of the company.
- The filing, management, regulations, compliance, and administration of a Virginia LLC are typically simple.
- It allows the company to choose pass-through taxation, but can also have corporate tax treatment if it is suitable for the company.
- There is no limit to the number of owners.
- Transferring of LLC ownership is easy and does not require you to complete complicated tasks.
LLC Formation in Virginia
There are many factors you have to consider for successful registration of business in Virginia. While the whole ordeal can be simple, it requires patience as it may be time-consuming. Generally, you will have to go through multiple steps.
- Choosing a Company Name – Under the state law, you will have to include the words Limited Company or Limited Liability Company in your business entity’s name. You may choose to use any of the abbreviations of the said phrases. Additionally, you also need to ensure the distinguishability of your company name. You cannot use a name that another business entity has registered with the state. To prevent any problems, you can check the availability of your company name in the business entity name database of Virginia.You can also reserve the company name that you want by filing an Application for Reservation or Renewal of Reservation for a Business Entity Name with the Corporations Commission. Doing this will reserve the name for 120 days. This filing comes with a $10 fee.The state allows LLCs to use an assumed name, which is also known as doing business as (DBA) or fictitious name. If you do not want to use the legal name that you have registered in your formational documents, then you can submit a Certificate of Assumed or Fictitious Name with the Corporations Commission. The filing fee is $10. You can only apply for this after you successfully register your LLC with the state.
- Nominating a Registered Agent – Before you proceed to the registration, you will have to appoint a registered agent in the state. You can choose either an individual or third-party organization that will agree to receive legal correspondence and business documents on behalf of your company. Check this article out to find out more about the requirements for a Virginia registered agent.
- Filing the Formal Paperwork – Like other states, Virginia requires LLCs to submit formal paperwork. In this state, it is known as Form LLC-1011: Articles of Organization. You have to submit this to the Corporations Commission. The filing fee for this is $100. To complete the form, you have to provide the following pieces of information:
- Name of your company
- Name and address of your registered agent
- The initial principal office address of your LLC
- Signatures of the organizers
- Creating an Operating Agreement – The state does not require you to prepare an operating agreement. But, this internal document can help your business. Generally, it establishes the operating procedures to run your LLC. It also sets out the responsibilities and rights of the owners, who are known as members, and managers. It can establish the management structure of your LLC. At the same time, having an operating agreement can help preserve the limited liability feature of the LLC by proving that the company is a separate entity.
- Ensuring Compliance with Tax and Other Regulatory Requirements – Depending on your LLC formation, you may have other tax and regulatory requirements.
- Employer Identification Number (EIN) – Getting an EIN from the Internal Revenue Service (IRS) is necessary if your LLC has multiple members. Even if you are the sole owner, you may also need it to hire employees and open a business bank account. Acquiring an EIN is free.
- Business Licenses and Permits – Some LLCs may also need to secure business licenses and permits. It will depend on the type of activities that your company does and its location. To find out if you need to obtain local licenses and permits, check with the clerk of the city or county where your company’s primary place of business is located. For state licenses, check the Business One-Stop website of the state.
- Department of Taxation Registration – If your company will hire employees or plan on selling goods that require the collection of sales taxes, you will have to register with the Department of Taxation. Use Form R-1.
- Annual Registration – As a Virginia LLC, your company will have ongoing compliance obligations with the state. You have to pay the $50 annual registration fee on or before the end of the month in which you created your LLC. Your registered agent will receive a notice of assessment from the Corporations Commission. If you fail to pay on time, your company will face a $25 penalty.
Once you decide on a LLC formation in Virginia, you have to familiarize yourself with the registration process and state requirements. Generally, you will have to go through several steps to make sure that everything you need to set up your company is in order.
For some business owners, this process can be daunting and overwhelming. Fortunately, it is not something that you have to face alone. You can get help from a reliable partner.
Getting the right support can help make the whole ordeal hassle-free. That is why it is important for you to find a trustworthy third-party organization like DoMyLLC. Our team of experts can handle the preparation and filing of formal paperwork. We can also serve as your registered agent to help make sure that your company will always remain compliant with the state.
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