Do you want to start a limited liability company (LLC) in Virginia? If so, you've come to the right place! From filing the necessary paperwork to choosing a registered agent, our step-by-step guide will provide you with all the information you need to know about forming an LLC in Virginia.
We will cover:
Let’s get started!
What Is An LLC?
When you start an LLC in Virginia, you’re separating your business and personal assets. In other words, if your company experiences hardship or you get sued, and you don’t have an LLC (or another business entity with liability protection), your personal assets, like your home and car, may be in jeopardy.
Why Start An LLC In Virginia?
Opening an LLC in Virginia also gives you the option to adopt the tax status of other business structures, like sole proprietorships, S corporations, and C corporations. Many LLCs are designated disregarded entities by the IRS unless you opt to be taxed as a corporation, so you’ll enjoy most of the tax benefits of a sole proprietorship, while also enjoying liability protection.
LLCs also enjoy:
How To Start An LLC In Virginia
Ready to start an LLC in VA? Here’s your six-step process to do so:
Select Your Business Name
First, you need a name for your business—one that’s not already taken.
Start by doing a business entity name search on the Secretary of State’s website. Business owners usually use their company’s name to establish their name recognition and brand identity. However, if you plan to only use your official name on legal documents, you can get a “Doing Business As” (DBA) name instead.
Next, check the Trademark Electronic Search System (TESS) database before filing any paperwork. Usually, running a name search is sufficient, but when you’re forming an LLC, it never hurts to be thorough.
Virginia LLCs require you to include either “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” as part of your organization’s official name.
In Virginia, you cannot include anything with the words “bank” or “trust” in your business name unless you’ll be engaged in the banking or trust company business, or if it’s “clear from the context of the remaining words that it will not be engaged in such business.” If you want to include words like “land surveying,” “architecture,” or “engineer,” you must be lawfully engaged in their services. In most cases, you also cannot use “United States,” “national,” “reserve,” or “federal” in your business name.
We also recommend looking up the URL availability of your business name. If your business name and URL are both available, get them quickly! It’ll make it easier for your audience to find you online.If you’re worried your name may get taken by someone while setting up your LLC, don’t be! In Virginia, you can reserve your name for up to 120 days for only $20.
Choose Your Registered Agent
Your registered agent is the person who will accept all legal and government correspondence for your LLC. It can be you, another LLC owner or member, or a business entity authorized to conduct business in the state of Virginia.
Your registered agent must have a physical registered address in Virginia. A P.O. Box won’t cut it. Also, their address will become public record once your organization receives its LLC designation. To protect their privacy, some LLC owners use a business entity as their registered agent.
Obtain Additional Licenses Or Permits
When you start LLCs in VA, you may need a state business license. While Virginia doesn’t have a blanket requirement, some industries, like real estate and engineering, do. If this is the case, fill out the required forms to obtain whatever licenses you need. Also, check out your city and county websites, because they may have additional licensing or zoning requirements.
If you're selling taxable goods or services, register with the Virginia Department of Taxation to collect sales tax from your customers. You'll report sales tax to the state monthly or quarterly, depending on your LLC's sales volume.
Draft Your Articles Of Organization
Next, you’re ready to create your Articles of Organization. These are the legal documents that outline your LLC’s basic information—and don’t worry, they’re not as scary as they sound.
To prepare your articles of organization, you need the following:
You can mail this document or file it online. The filing fee is $100.
Before you submit your Articles of Organization to the Secretary of State, check to make sure you’ve filled it out properly. Inaccurate information could cause you a real headache down the road.
Create Your Operating Agreement
An operating agreement outlines how your LLC will conduct business. It includes your rules, regulations, and much more! Think of it as your LLC's constitution. Even though Virginia doesn’t require you to have an operating agreement, nor do you need to file one, we strongly recommend that every business entity has one.
Operating agreements define:
Once you’re drafted your operating agreement, give copies to your entire LLC membership, so they can review and sign them. This can save you a lot of trouble if your company ever has a legal or financial dispute. Without an operating agreement, the courts may be left to decide how to resolve a dispute, which may not be in your or your LLC’s best interest.
Obtain your Employee Identification Number (EIN)
Finally, you need to get an EIN from the IRS. It’s free and easy to do when you fill out this online application. Without an EIN, you won’t be able to hire employees or open a business bank account, so obtaining one is essential.
How Much To Start An LLC In Virginia?
In total, how much does an LLC cost in Virginia? Luckily, not much! Your initial filing fee costs $100. After, you’ll have to pay an annual state registration fee of $50. While you may have additional costs (e.g., additional licenses or permits, workers compensation insurance, unemployment taxes, etc.), those are the only fees required of all Virginia LLCs.
What Are Your Responsibilities After Opening An LLC In Virginia?
Now that you’re up and running, here’s how to remain in good standing in VA:
Manage Any Employer Requirements
Does your LLC have employees? If so, you need to report new hires to the Virginia New Hire Reporting Center within 20 days, regardless of whether the employee is seasonal, part-time, or full-time. You must also pay employer taxes and unemployment taxes, and purchase workers compensation insurance.
Pay Taxes And Fees
Identify all your tax-related obligations locally, federally, and statewide. Some cities and counties in Virginia charge an annual “license tax.” This varies based on your LLC’s gross sales for the year.
Also, don’t forget to submit your $50 annual state registration fee. It’s due each year on the last day of the month you formed your LLC. If you formed your LLC on September 8th, it’ll be due on September 30th each year. You’ll receive a notification from the Virginia State Corporation Commission regarding when it’s due.
Stay In Compliance
Finally, remain in compliance with the federal government. As an LLC owner in Virginia, you and your partners are required to pay federal self-employment taxes.
If you have employees, you have to withhold Medicare and Social Security taxes from their paychecks and report them to the government. You’re also required to pay federal unemployment taxes.
Do you still have questions about how to start a LLC in Virginia? We’ve got answers!
No. Costs can vary considerably from state to state. For example, LLCs in NJ cost $125 to form, and then require an additional $50 each year to remain in good standing. LLC California costs are $70 to form, with a $20 biennial fee and an $800 annual tax obligation due each year.Other states have varying startup and annual fee costs. For example, LLC Tennessee costs $307 minimum to start. However, if you have more than six LLC members, it’ll cost you an additional $50 per member to form an LLC in Tennessee, capping out at $3,000. Their annual fee works the same way, with the minimum you’ll pay to be $300 each year.
Paying yourself from an LLC, or taking an “owner’s draw,” is simple. All you have to do is transfer a portion of your LLC’s cash reserve from your company account to your personal account. That’s it!
If multiple members share the profits, make sure each member gets the agreed-upon amount or percentage transferred to their account. This amount should be outlined in your operating agreement or similar document.
Conclusion: How To Start A LLC In Virginia
Starting an LLC might be intimidating. Thankfully, our step-by-step guide will help you navigate the process—and if you still have questions, just ask! We can help you obtain your LLC license, so you can run a successful business.Ready to make your business an even greater success? Check out The Lazy Man’s Guide to Living The Good Life, and discover how to maximize your potential!