Virginia LLC

How To Create an LLC in Virginia

When creating an LLC in Virginia, it is important to follow specific instructions. These steps include filing your articles of organization with the Virginia State Corporation Commission, choosing a name, and applying for a business license. If you are wondering how to start an LLC in Virginia, follow these steps to get your business up and running.

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Step 1

Select a Name for Your Virginia LLC

Any LLC in Virginia needs a unique name. Like all other states, Virginia requires that your company’s name be different from other business entities on file with the State Corporation Commission. For instance, you cannot name your business “Mister Plumber LLC” if there is an existing company called “Mr. Plumber LLC.” This regulation exists to prevent public confusion.

Under Virginia law, your company must end with one of the following phrases:

Further, there are restrictions on using certain words in your company’s name. For instance, you can’t use the words “architecture,” “engineer,” “bank,” or “trust” in the name unless your business directly conducts those activities.

  • Limited Liability Company
  • Limited Company
  • LLC
  • LC

Step 2

Appoint a Registered Agent

Once you’ve chosen a unique name, the next step is to choose an agent. When creating an LLC in Virginia, you must appoint a registered agent. This is a person or business willing to accept official documents and legal paperwork on your behalf. Virginia has strict guidelines regarding who can serve as a registered agent. All agents must either be a manager or owner of the business, or licensed to practice law in Virginia. The person must also reside and have a physical address located in Virginia.

Alternatively, you can choose a company to act as your registered agent. Many nationwide companies can perform this service in Virginia. A number of law offices can also perform the service on behalf of your LLC for a small fee.

Step 3

Choose a DBA

In Virginia, you have the option to operate under a “doing business as” name. This fictitious name is different from your LLC’s legal name. You do not have to use a DBA, but sometimes it is helpful to do so. For instance, sole proprietors can use one to operate under a different name than the business owner’s persona. If you decide to use a DBA, you need to register with the county clerk’s office in your local jurisdiction. You must then pay a $10 filing fee and file the certificate with Virginia’s SCC.

Step 4

Obtain a Business License if Necessary

Are you wondering what else do you need to know about how to start an LLC in Virginia? It is important to determine whether you need a business license before filing your official paperwork. Virginia does not require a general business license, but LLCs operating in specific industries need one. For example, real estate agents, property developers, engineers, and lawyers must have a license to operate legally.

Further, many cities in Virginia have separate zoning or licensing requirements based on the location of the business. If you are not aware of your local regulations, contact your local zoning office for specifics. If your LLC is planning on selling taxable services or goods, you must register with the Virginia Department of Taxation. You need this registration to collect sales tax from customers and report the sales to the state.

Step 5

File Articles of Organization

This state entity handles the registration process for all business entities. This includes corporations, sole proprietorships, and partnerships. Every LLC must file articles of organization with the Virginia State Corporation Commission. This agency also collects filing fees and enforces regulations.

Virginia allows LLCs to file formation paperwork online or via the mail. File your paperwork online if you want a shorter processing time. The filing fee is $100 for online and mail submissions. The template for your articles of organization is on the SCC’s website. The document must include your LLC’s name, address, and the name and signature of the form’s preparer.

You’ll need to obtain a certificate of foreign registration from the Virginia SCC if you want to operate in Virginia but your LLC operates under the laws of another state. The fee for obtaining this certificate is $100. Include a copy of your home state’s articles of organization.

The State of Virginia should process your documents within two weeks once you submit your articles of organization. Expedited processing is available for an extra fee. Keep a copy of your certified paperwork once you receive them from the state. You may need copies of this paperwork when you file your business taxes or your annual reports.

Step 6

Create an Operating Agreement

After you receive approval from the Virginia SCC, you can conduct business legally. However, it is important to complete a few more steps before you officially open up your LLC. First, you should create an operating agreement. Though not required by Virginia law, this document outlines how your business functions. Operating agreements also describe each owner’s input and profit share information.

Further, an operating agreement helps establish your LLC as an independent business entity. Without this document, Virginia law dictates how your business operates. You can create the operating agreement yourself, or a lawyer can help you for a small fee. Your document should include the following info:

  • The name and address of each owner
  • The products and services your LLC provide
  • The LLC's meeting schedule
  • Each owner’s stake in the business, including voting rights and profit share
  • How much each owner contributed to the business
  • How to handle ownership transfers

Even if you decide to create the document yourself, you should have a lawyer or online legal service review the paperwork for you. Upon approval of the paperwork, you should provide a copy to each member for their signature and review. You may want to have this document notarized for legal purposes. There is no need to submit this document to the Virginia SCC as it is not a compulsory formation document.

Step 7

Comply With State Employer Obligations

You must meet a few more obligations when creating an LLC in Virginia if you have employees. You can disregard these obligations if you are the only member of your business. Otherwise, be sure to do the following:

  • Report employees: Virginia requires you to report all new employees to the SCC within a certain period. You must notify the hiring of all full-time, part-time, or seasonal employees. It is state law to note all employees within 20 days. 
  • Pay taxes: If you have employees, you must comply with payroll taxes and state withholding requirements. Make sure to withhold payroll rates and file payroll tax returns along with your regular business returns.
  • Buy workers’ compensation insurance: Virginia law requires you to purchase workers’ compensation insurance if your LLC has more than three employees. This insurance is a must, even if you only have part-time or seasonal employees.
  • Pay unemployment taxes: Your LLC must pay unemployment taxes if you meet specific requirements. If your payroll is more than $1,400 per quarter, or you have year-round workers, you have to pay this tax. You must also file tax reports four times a year. The Virginia Employment Commission, not the State Corporation Commission, collects unemployment taxes. 

Step 8

Pay Taxes and Fees

Along with any employer-related obligations, familiarize yourself with your LLC’s tax obligations. Your LLC is also required to pay annual fees to continue conducting business legally.

Virginia considers LLCs pass-through businesses for purposes of income taxes. Pass-through entities are not required to pay taxes on the LLC itself. The business profits and losses appear on the owner’s personal tax return. Each owner or manager pays state and federal taxes on their share of the LLC’s profits.

Owner leadership can choose to be taxed as an S-corporation or C-corporation by filing specific documents with the Internal Revenue Service. An LLC that is taxed as a C-corporation must pay federal and state corporate taxes.

As mentioned before, LLCs with employees should deduct payroll taxes and pay unemployment taxes. A percentage of unemployment taxes goes to Virginia, while another portion goes to the federal government.

Finally, you must pay a fee when you renew your state registration. You must renew your registration each year. The yearly payment of $50 must arrive on the last day of the month in which your company started. The Virginia SCC will mail the renewal paperwork to your registered agent. You can also submit this paperwork online. There is a $25 penalty if you pay this fee late. While Virginia requires you to pay your registration fee annually, you do not have to submit an annual report.

Step 9

Fulfill Federal Requirements

When going through the process of how to start an LLC in Virginia, also remember federal regulations. Aside from satisfying state requirements, you need to comply with federal regulations to conduct business in Virginia legally. First, if your LLC has employees or more than one owner, you need to get a federal employer ID number. You also need an EIN if you elected to be taxed as a corporation instead of an LLC. You can obtain an EIN for free online via the IRS website.

Furthermore, Virginia LLC owners need to pay self-employment taxes. These taxes cover federal expenses. You also need to withhold these taxes from your employees’ paychecks and report the numbers to the federal government.

Finally, an LLC with more than three employees needs to pay the federal unemployment taxes, required under the Unemployment Tax Act. Luckily, paying state taxes by the due date can reduce your federal tax authority.

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With GovDocFiling’s convenient service, creating an LLC in Virginia is simple. Our partners at Inc Authority will file your Articles of Organization and provide one year of free Registered Agent services, you only pay mandatory state fees.

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