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LLCs make up 35% of all businesses, making them the most popular structure for small businesses.
There are lots of advantages to starting an LLC, including limited liability protection, pass-through taxation, and flexibility in management structure.
If you want to start an LLC in Virginia, you may be wondering where to start. The process is actually pretty simple and can be broken down into nine easy steps.
The 7 Best LLC Services for Starting an LLC In Virginia
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Create Your Virginia LLC In 9 Easy Steps
In Virginia, you must register your company with the Virginia State Corporation Commission (SCC) in order to establish an LLC. Despite the name, this agency deals with filings for a variety of business forms, including LLCs. The SCC also manages LLC naming requirements, collects filing fees, and creates other regulations that you must comply with.
Starting your LLC doesn’t need to be difficult—all you need to do is follow these nine simple steps.
- Choose a Name for Your LLC
- Appoint a Registered Agent
- File Your Articles of Organization
- Draft an LLC Operating Agreement
- Get a Business License (If You Need One)
- Obtain an EIN Number
- Open a Business Bank Account
- Ensure Compliance With State Regulations
- Pay Taxes and Comply With Federal Regulations
Step 1: Choose a Name for Your LLC
Your LLC’s name must include the phrase “Limited Liability Company” or the abbreviation “LLC.” Furthermore, professional services firms (e.g., doctor’s offices and law firms) must create a professional limited liability company. These companies can pick one of the above endings (P.L.L.C., PLLC, P.L.C., or PLC), but they are not required to do so.
There are also restrictions that Virginia law places on using certain words in your LLC’s name. Unless your business is actually engaged in the respective activities that the words entail, they are off-limits. These words include:
You also can’t include abbreviations referencing other types of business entities, such as “Inc.” which would denote an incorporated company.
Choosing Your Name
The first step in creating your business is deciding on what to call it. The process of changing or rebranding this name further down the line is possible, but it’s best to avoid the hassle and choose something you’re confident in from the outset.
There are a number of factors you should consider when selecting your business name:
- Make sure it’s available: Before you get too attached to a name, make sure that it isn’t already being used by another business in Virginia. You can search the SCC’s business database to see if your desired name is available.
- Keep it simple: The best names are short, sweet, and easy to remember. Avoid anything that is too long or difficult to spell.
- Avoid using restricted words: As we mentioned, there are certain words that you’re not allowed to use in your business name. Make sure to avoid using any of these restricted words.
- Make sure it’s available as a domain name: In today’s digital age, it’s important that your website is easy to find. It is best if your name is available as a .com, but this is not as important anymore, as Google’s search rankings support other domain endings equally.
If you aren’t sure where to start, consider using an automatic name generator tool. Many of these are free to use and can be found with a simple Google search.
Once you’ve begun thinking about what to name your business, it is best to come up with several names that you like and then narrow it down from there.
Using a DBA
When starting an LLC, you’ll have the option to operate under a DBA (doing business as). This means that your brand name can be different from the name you choose for your LLC.
For example, someone named John Doe might own an LLC titled John Doe, LLC and do business as Doe Landscaping.
There are a number of reasons you might want to choose a DBA:
- You already have a strong brand name that you don’t want to give up.
- Your desired LLC name is already taken.
You want to keep your personal and professional lives separate (e.g., if you’re a doctor who also owns a bar).
- You want to open a new business but keep your old LLC.
If you decide that you would like to operate under a DBA, then you will need to file for a fictitious name with the Virginia SCC. The application fee is $10.
Step 2: Appoint a Registered Agent
Your next step in the process will be to find a registered agent. You’ll have to do this before you can file your Articles of Organization.
A registered agent is an individual or business entity that has agreed to accept service of process on behalf of your LLC. This means that if your LLC is ever sued, the papers will be served to your registered agent instead of you.
There are a few things to keep in mind when choosing a registered agent:
- The registered agent must be a resident of Virginia or a Virginia-based business.
- The registered agent must have a physical street address in Virginia (P.O. boxes are not allowed).
- The registered agent must be available during normal business hours to accept service of process.
- You can act as your own registered agent, but we don’t recommend it. If you’re ever served with papers, it will be made public record. This means that your home address and personal information will be available to anyone who wants to see it.
If you would prefer not to use your own personal information, ZenBusiness can help you find one quickly.
Step 3: File Your Articles of Organization
The next step is to register your LLC with the Virginia SCC. The best way to do this is online through their website. To do this, you’ll need to file your Articles of Organization. You can do so online or by mailing in Form LLC-1011.
You will need to provide the following information:
- Your LLC’s name and address
- The names and addresses of your LLC’s members
- The date that your LLC will dissolve (if applicable)
- Your registered agent’s name and address
- Your LLC’s purpose
- Your signature
The filing fee is $100 and you can file it on their website through a portal. You will also need to pay an annual report fee of $50.
Once you have submitted your application, it can take up to three weeks for the SCC to process it.
Once your LLC has been approved by the State, you will receive a Certificate of Good Standing from the SCC. This document shows that your LLC is in compliance with state law and can be used to open a business bank account and apply for business licenses.
Step 4: Draft an LLC Operating Agreement
The State of Virginia does not require LLCs to have an Operating Agreement. However, you may want to draft one anyways.
An LLC Operating Agreement is a document that outlines the ownership and management structure of your LLC. It also sets forth the rights and responsibilities of the LLC’s members. Having an Operating Agreement in place can help prevent disagreements down the road and will make it easier to sell or transfer ownership of your LLC in the future.
An operating agreement also establishes your LLC as a distinguishable business entity. Without it in place to determine how your LLC will function, the State of Virginia will determine how your business will be run by default.
If you decide to draft one, here are a few things you should include:
- The names and addresses of your LLC’s members
- How much each member has contributed to the LLC
- How profits and losses will be distributed
- Voting rights and decision-making processes
- Steps for adding or removing members
- What will happen if a member dies or wants to leave the LLC
- The products or services offered by the LLC
- The LLC’s name and address
- The date the Operating Agreement was signed
- Yours and other stakeholders’ signatures
Once you have drafted your Operating Agreement, make sure to keep it in a safe place. You will not need to file it with the SCC, but it is a good idea to have it on hand in case you ever need to reference it.
Step 5: Get a Business License (If You Need One)
When you’re starting your Virginia LLC, you’ll need to determine whether or not your company will need a license to do business. Virginia does not require a general business license for all companies, but some businesses will need to get a license or permit before they can legally operate.
For example, if you’re starting a business that will sell alcohol, then you’ll need to apply for a liquor license. If you’re planning on opening a daycare, you’ll need to get a license from the Department of Social Services.
Other industries that will require licenses include:
- Food service
If you’re not sure if your business will need a license, you can check out the Virginia Business One Stop website. They have a handy tool that will help you determine which licenses and permits you’ll need to get before you can start operating.
Step 6: Obtain an EIN Number
When doing business in Virginia, you will need an EIN. This is also sometimes called a Tax ID number. You can apply for an EIN online through the IRS website, by fax, or by mail.
To apply for an EIN, you need to obtain Form SS-04 from the IRS website. Once you have completed the form, you can submit it online, by fax, or by mail.
If you are applying online, you will need to have a valid email address in order to receive your EIN. If you are applying by fax or mail, it can take up to four weeks to receive your EIN.
You will need an EIN in order to open a business bank account, apply for business licenses, and file your taxes.
Step 7: Open a Business Bank Account
Before doing any business, you’ll need to open a business bank account. This will help you keep your personal and business finances separate. Even as a single-member LLC—which will be taxed as personal income—it is still a good idea to open a business bank account for expense tracking.
Business bank accounts also tend to have excellent rewards that most credit cards and personal accounts do not, so it is worth looking into what your options are.
To open a business bank account, you will need the following:
- Your business EIN
- Your Certificate of Good Standing from the SCC
- Your LLC Operating Agreement (if you have one)
- Cash runway to deposit right away (sometimes)
Step 8: Ensure Compliance With State Regulations
There are many different regulations you’ll have to comply with as a Virginia LLC owner. If you have employees, there are a few things you’ll need to take care of:
- Employee Reporting: You will need to submit employee information, including Social Security numbers and dates of birth, to the Virginia New Hire Reporting Center under both federal and state law. You have 20 days after hiring or rehiring to complete this.
- Workers’ Compensation: You will need to obtain workers’ compensation insurance if you have any employees working for you in Virginia.
- Unemployment Insurance: If you have any employees working for you in Virginia, you will also need to pay unemployment taxes.
- Payroll Taxes: Payroll taxes are taxes that are withheld from your employees’ paychecks. These include federal income tax, Social Security tax, and Medicare tax.
- Worker’s Compensation Insurance: If you have any employees working for you in Virginia, you will need to obtain workers’ compensation insurance. This will help cover the cost of any injuries or illnesses that your employees may suffer while on the job.
Step 9: Pay Taxes and Comply With Federal Regulations
All businesses in Virginia are required to pay state and federal taxes. The type of taxes you’ll have to pay will depend on the structure of your business.
If you’re a sole proprietor, you’ll need to pay personal income tax on the profits of your business. If you’re an LLC, you’ll need to pay corporate income tax on the profits of your business. If you’re a partnership, you’ll need to pay partnership tax on the profits of your business.
LLCs can choose to be taxed as a corporation as well—this is known as an S-corporation. In this case, you’ll need to pay corporate income tax on the profits of your business.
You will also need to comply with federal regulations depending on the kind of business you run. Based on your industry, it is always best to consult with an attorney or accountant to make sure you are taking care of everything correctly.
Final Thoughts About How to Start an LLC In Virginia
Now you know how to start an LLC in Virginia! The process seems complicated, but it is actually a lot easier than it seems. All you need to do is file the correct documents, find a registered agent, and get an EIN. Once you have all of that, all you need to do is stay compliant with state and federal regulations.
And if you don’t want to go through the whole process on your own, ZenBusiness can help. They will take care of the paperwork, help you find a registered agent, and get your EIN for you. All you need to do is choose a package and they’ll take care of the rest!