Having a Virginia LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Virginia.
On this page, you’ll learn about the following:
- How to Start an LLC in Virginia
- After Starting your Virginia LLC
- Virginia Foreign LLC
- Why an LLC in Virginia
- Biggest Businesses in Virginia
- Virginia LLC Formation Review
How to Start an LLC in Virginia
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. This section gives you a step-by-step guide on how to start an LLC in Virginia.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In Virginia, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Virginia business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Virginia. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in Virginia. The cost of a name reservation is $10.
Important Quick Links:
Office of the Clerk
P.O. Box 1197
Richmond, Virginia 23218-1197
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Step 2: Assign a Registered Agent in Virginia
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in Virginia. Choosing a Virginia registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of Virginia or have a physical street address in the state. It could also be a business with an office address. Here are the recommended agents and employees for you:
Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Virginia. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in Virginia
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Virginia Secretary of State, which costs $100. LLC cost in Virginia includes other fees and taxes. You may file them online or by mail.
This Virginia Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Virginia, like if it is a member-managed or managers-managed. LLCs with employees need to check the Virginia government portal for guidelines to hire employees.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Virginia LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county. Read more about the Virginia certificate of formation for online registration.
How to File by Mail
If you prefer filing real-life forms for your Virginia LLC registration, then you can download the Virginia Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature. You may also file in person by visiting the office on business days.
Mail To: State Corporation Commission
P.O. Box 1197
Richmond, VA 23218-1197
Step 4: Create Your Virginia LLC Operating Agreement
A comprehensive operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to an LLC operating agreement Virginia does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve Virginia LLC later.
Step 5: Filing a Virginia LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Virginia LLC requires specific rules and regulations. One should know about them before hiring employees. EIN for Virginia foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Virginia LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your Virginia LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Virginia business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Virginia LLC annual report or biennial report
- Already existing LLCs that wish to operate in Virginia must register as Virginia foreign LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Virginia Foreign LLC
To register a Virginia foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Virginia. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Virginia Foreign LLC to know more about having a foreign LLC.
Why an LLC in Virginia
Virginia is listed at number 4 regarding the business establishment and number 1 regarding rules and regulations. This becomes a significant advantage for a business that is thinking of establishing itself in the state. Moreover, there are many benefits like reducing tax liabilities, and various business funding options are offered to LLCs here. Read more on Virginia’s classification of LLC tax. If you are interested in starting one, then you should take a glimpse of the benefits mentioned.
Business Grants for small Businesses in Virginia
Small business is always nurtured and pushed forward toward growth by the state of Virginia. There are many ups and downs that a small business goes through; that is why there is some grants program that is offered to these small businesses to help them get over these ups and downs easily. The grants are discussed below.
- Virginia Economic Development Incentive Grant is the first and most famous grant to a Virginia LLC based on its performance. Governments list out the small businesses, and out of them, those performing well are provided with grant offers. Consuming them, they can think of expansion and create more jobs in the state.
- Next is Virginia Investment Partnership Program, in which a grant is provided to LLC for using advanced technology in their business and focus more on capital growth.
- Commonwealth opportunity fund is another business incentive that can support projects and promote new jobs.
The Virginia Enterprise Zone
Some enterprise zones in the state are an opportunity for LLC in Vermont. There are many incentives provided to businesses that especially come and establish their business in these areas. Some of the incentives offered are:-
- Rebates are offered on fees that are taken for permits and rezoning.
- A net grant of 50% is provided for businesses looking for an upgrade in their tools and machinery.
- A commercial loan façade program helps an eligible business to gain a loan of $5000 to around $50,000.
Some general benefits
There are some general benefits of Vermont State that leverage this state’s option over others to Start an LLC in Vermont.
- Access to the major US markets is readily available in Vermont.
- The labor force that is available in the state is highly educated and well skilled.
- There are many Workforce development programs that help out a business in making the desired workforce.
- The state is right to work, which means no union membership is required if a person wants employment, making it easy to grab a job and find new candidates.
Biggest Businesses in Virginia
As a business person, if you are looking forward to starting an LLC in Virginia, then knowing the state economics is very important. You should study the details of Virginia state businesses and their contribution to the state economy.
The services providing businesses own the biggest chunk of the share in the GDP of Virginia state, i.e., around 66.67%. Yes, the state’s entire service sector is growing at a furious rate as the quality of services here is much better than in other states. The interesting fact is that only 33.3% of people are working in this sector, which means that the per capita income of this sector is also high. The total contribution of the service sector to GDP is around $226.4 billion, which is immense.
The sector includes education and health care sectors with professional and financing services. There is a small contribution of the real estate sector also in this value.
The numbers of technology workers that are present in the state are maximum as compared to other states. The state has exported the maximum number of computer chips to people worldwide, which has made the state one of the best exporters around the world. The state’s technology corridor has many firms related to technology and internet-based software, which is also booming at a huge rate.
The technology sector has alone accounted for the production of $1 billion amount of chips exported worldwide.
Almost 32% of the land of Virginia is occupied by the agriculture sector, which is providing around 357,000 jobs to people around. Although tobacco is not the state’s main crop, it still ranks 5th in terms of its production in the country. The main things for which the state is famous are peaches and plums in crops and turkey raising operations when it comes to poultry.
Top small business ideas that are famous in the state are:-
- Pool cleaning and maintenance business
- Pest control businesses
- Dog grooming business
Virginia LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Virginia. Click on the steps in this list to read the full detail.
- Name your Virginia LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a registered agent
In Virginia, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in Virginia
Once you have completed the necessary steps to create your new company, you should consider filing articles of organization with the Virginia State Corporation Commission. You can file these documents online or at your local SCC office. If you choose to file by mail, you should make sure to include a check for the filing fee. The Virginia SCC accepts both credit cards and eChecks for filing fees. Upon filing, you should keep your new LLC paperwork in a safe place with other documents related to your business. Purchasing a customized business kit is also a great idea to keep important documents together.
Before you can file Articles of Organization, you should create a copy of your LLC operating agreement. If you decide to create an LLC online, you may want to consider hiring a lawyer or using an online service to help you write the operating agreement. After creating your LLC, make sure that the company will have a registered agent, as this person will be the main point of contact with the state regarding your business. The Virginia State Corporation Commission does not require the use of a registered agent when creating an LLC. However, you should always choose someone who will have a solid background and understand the legalities involved with your business.
While you may not need to obtain a business license to start up in Virginia, many businesses require professional licenses. Visit the Virginia Department of Professional and Occupational Regulation to learn more about licensing requirements. Generally, LLCs operate as pass-through entities, meaning that the income they generate is taxed through to the members, rather than being distributed to the shareholders. If you’d like to pursue a different tax treatment, you’ll need to consult a Virginia lawyer or accountant. For tax purposes, LLCs must pay employee taxes and collect sales tax.
If you are a resident of Virginia, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $100 (domestic LLC) and $100 (foreign LLC), LLC costs in Virginia include $50 for Annual Reports every year. LLCs are liable to pay sales tax of 4.3% every year
It takes no time to get an LLC in Virginia if you file it online. For the mail filing, it takes 7 business days to get an LLC.
Every year all the LLC have to submit an Annual Report and pay $50 to the Virginia Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLC in Virginia at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, leave a comment below.