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If you are starting a company in Virginia, you have the option of choosing from a variety of businesses, such as:
- Limited Liability Company
- Sole Proprietorship
- Partnership
- Corporation
If your business comes under any of these categories, it is essential to consider forming an LLC. Here are some steps to starting a new LLC in Virginia.
1. Choose a Business Name
You must do a Virginia LLC search to ensure that another business does not already use your proposed name. The Virginia State Corporation Commission site (SCC) performs the search.
When you are choosing a business name, consider the following factors:
- Will the business be operated out of your home? If so, are there any zoning restrictions where you live that may prohibit your forming an LLC in Virginia if the name contains the word “home”? You can check with your city or county for this information.
- Is the name you are considering available with the Virginia State Corporation Commission? To check, you can go to the website and enter your proposed Virginia LLC search name in the “Searches can be conducted on” tab, and then click “search.”
2. File Articles of Your Business
To register your new LLC in Virginia, you must file articles of business with the SCC located at 101 North 14th Street, Richmond, VA 23219-3921. The filing fee is $100. You can also file online. There is an additional convenience fee of $5 for filing online via credit or debit card. You need a valid credit card and an email address to file online.
You can mail your articles of organization to the SCC at PO Box 1197, Richmond, VA 23218-1197. Moreover, you can also fax your articles of organization to the SCC at 804-371-9657, provided you have a working fax machine.
3. Virginia LLC Operating Agreement
An operating agreement can help resolve problems between members by clearly stating each member’s rights and responsibilities regarding operations and management of the LLC. An LLC operating agreement is unnecessary by Virginia state law. However, it is recommended for the protection of all LLC members.
4. Virginia Annual Report
Virginia requires annual reports to be filed with the SCC every year on a predetermined basis. The reports can be filed online, by mail, or fax and include a $100 filing fee.
It is important to remember that the filing date of the annual report determines when your LLC must begin doing business in Virginia and your authorized period to transact intrastate business (i.e., only in the state of Virginia). For example, if your LLC was formed in May of 2016 and you filed an annual report on July 1, 2017, your authorized period to transact intrastate business will end April 30, 2018.
5. Virginia LLC Taxes
An LLC is its own entity for tax purposes, which means that the income and expenses of the business are generally not reported on your personal federal and state tax returns.
You also need to file Form 8832 with the IRS to report that your business is treated as an LLC for federal tax purposes. In other words, elect to have your LLC taxed as a disregarded entity. The one requirement for this election is that most members must consent.
You should also be aware that you will need to submit a Form W-9 with your federal tax return each year. Form W-9 requests the name and Social Security number or Employer Identification Number of the person or business you do your taxes. The form may be required to be submitted at any time during the tax year.
If you have any specific questions about taxation, do not hesitate to consult a tax professional for advice.
6. Foreign Qualification in Virginia
If your LLC was formed outside of Virginia, it is considered “foreign.” It must register to transact intrastate business and qualify as a foreign LLC in Virginia. You can check with the SCC if you are unsure about your LLC’s status. But, an LLC will be required to register as a foreign LLC if:
- The LLC does business in Virginia, and its owners, members, or managers have a place of business in Virginia.
- The LLC owns real property in Virginia.
- The LLC is a limited partnership that does business in Virginia and has a general partner who is not a foreign LLC from another state.
- Intrastate services are being performed in Virginia by the LLC, and the LLC has no members in common with another Virginia LLC that is not domestic.
- You have stockholders, partners, members, officers, or employees domiciled (living) in Virginia who hold at least five percent of the ownership interest in your company.
- The LLP is licensed by the State Bar of Virginia to transact intrastate business through an independent representative located in Virginia.
