If you’re looking for a reliable DIY guide for starting an LLC in Virginia, look no further. Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.
That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire a good LLC service – they’ll take care of the paperwork so you can spend more time growing your business.
Recommended: Compare the Top LLC Services
If you’re new to the process of starting an LLC, you might also be unfamiliar with the LLC formation services that are reliable and offer great value – like ZenBusiness. As a reference point we compared them to the two most well known LLC formation services, IncFile and LegalZoom. See our comparison guides for more information:
Step 1: Name Your LLC
What’s in a name? Quite a bit, actually. Your business name is your Virginia LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.
Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.
While you can (and should) be creative with your business name, there are certain commonwealth requirements that it must follow.
Virginia law requires your business name to include the words/abbreviations “Limited Liability Company,” “Limited Company,” “L.L.C.,” “L.C.,” “LLC,” or “LC.” Plus, there are certain words that it cannot contain, like “bank,” “trust,” “engineer,” “architecture,” “land surveying,” or any word implying that it’s a corporation or partnership.
Your name might comply with all of the above, but if it’s already in use, you can’t reserve or register it. Any name you choose must be distinguishable from every other business name on record with the State Corporation Commission. If you discover your desired name is taken, making changes to the following components will NOT be enough to distinguish it:
- Entity designators like LLC, Ltd., or Inc.
- Articles (“a,” “an,” and “the”)
- Conjunctions (like “and,” “but,” and “or”)
- Special Characters
Consequently, if you want to make your name unique, you must make a significant change to one or more of the keywords.
Consider this: your friend Fanny wants to open a flower shop in Richmond, Virginia. The name she is considering, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the State Corporation Commission’s records.
Determine the Name is Available
Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Articles of Organization without first confirming it’s available. Use the State Corporation Commission’s Check Name Distinguishability search to see if there’s an existing business using your desired name.
Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.
Optional: Name Reservation
You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in Virginia for a total of 120 days.
Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can protect it by submitting an Application for Reservation form and a $10 fee to:
State Corporation Commission
Office of the Clerk
P.O. Box 1197
Richmond, Virginia 23218-1197
Or, if you live near Richmond, you can drop it off in person at the Tyler building (1st floor): 1300 East Main Street Richmond, Virginia 23219
Unfortunately, there’s no online submission option for name reservations, so you will need to either mail or hand-deliver it. Typical processing time is 5-7 business days, so that name will be yours within a week or so.
Step 2: Choose a Registered Agent
Fanny’s LLC is quickly taking shape, and if it’s going to operate in Virginia, she’ll need a go-between for commonwealth and legal communications. This is called the registered agent.
A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the commonwealth so you don’t have to. But maintaining an agent isn’t just a convenience, it’s required. To quote the State Corporation Commission, “Every Virginia and foreign business entity authorized to transact business in Virginia is required by law to continuously maintain in the Commonwealth a registered office and registered agent. The sole statutory duty of the registered agent is to forward to the business entity at its last known address any process, notice or demand that is served on the registered agent. A business entity may not have, at any given time, more than one person serving as its registered agent in Virginia.”
Taxes, lawsuits, maintenance requirements, and more – the registered agent takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, your agent makes your business available to receive documents even when you’re out of town or away from the office. This is especially important if your physical office is outside Virginia.
Now for the practical application, the “how-to.” Once you’ve decided on your registered agent and that person or company has consented to the appointment, include their name and Virginia address on your Articles of Organization. This will make the agent’s information part of the commonwealth’s public record.
You have plenty of registered agent options, and they all fall into two large categories:
Individual as Registered Agent
You may think that an individual registered agent would need specialized training or experience, but this isn’t the case. However, your agent must be a resident of Virginia with a physical address in the Commonwealth (no P.O. boxes). And he or she must either be a member of the Virginia State Bar or part of your LLC’s management. You can even serve as your own LLC’s agent, provided you meet these requirements.
Registered Agent Service
It can be a lot easier, though, to use an LLC formation service like IncFile or Northwest Registered Agent, so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your Virginia LLC on your own, you can use a national registered agent service to cover your agent duties.
During the life of your LLC you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, you’ll want to make the change as soon as possible because operating without an agent on file can lead to administrative dissolution.
Step 3: File the Formation Documents with the Commonwealth
This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.
She’s reserved her unique business name, designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Articles of Organization. This filing creates a record for Fanny’s Florals and Design, LLC with the Virginia State Corporation Commission, giving it authorization to commence business in the commonwealth.
When it comes to actually filing the document, you’ve got options. Feel free to file online, by mail, or in person. All three require a $100 fee.
Need to start your LLC quickly? File online. Using Virginia’s efile Express will process your form in real-time, so you can get started on the next steps right away.
Hard Copy Filing
First, download the paper application and fill it out. Processing time for paper applications is 5-7 business days, but you can request expedited, next-day processing for an extra $100 or same-day processing for an extra $200. To request either, submit an Expedited Service Request Form with your Articles of Organization.
Mail your forms and payment to:
State Corporation Commission Clerk’s Office
PO Box 1197
Richmond, VA 23218-1197
If you’re local to Richmond, you can hand-deliver it instead to:
State Corporation Commission Clerk’s Office, First Floor
1300 E. Main St.
Richmond, VA 23219
After your form has been processed, your LLC is registered with the State Corporation Commission and you’re well on your way to doing business in Virginia.
Step 4: Create an Operating Agreement
The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.
Virginia doesn’t require your LLC to adopt an operating agreement, but if you want to set your business up or success and stability, you should create one. Your agreement establishes highly customized processes for nearly every aspect of your business, allowing it to run smoothly and protecting your personal assets in potential legal disputes.
Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decided to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to tax structure.
If you’ve decided to draft an agreement, there are two ways to go about it:
- Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but we recommend this one, courtesy of Northwest Registered Agent. It’s got everything you need to draft a solid agreement.
- Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with commonwealth law, includes all necessary information, and avoids Virginia’s default laws.
What are default laws?
Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the commonwealth will make that decision for you.
Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.
Step 5: Get an EIN
There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.
Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation or partnership, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.
The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:
Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.
You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.
Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Okay, so you’ve filed the Articles of Organization, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!
Step 6: Taxes, Licensing & Income Reporting
For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep a Virginia LLC running smoothly and in good standing with the commonwealth.
Before you start doing business, create a plan for the following potential LLC requirements:
As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.
Virginia LLCs have a fairly simple commonwealth taxation process too. Like federal taxes, Virginia’s taxes “pass-through” to the owners’ personal returns. Plus, unlike some other states, Virginia doesn’t impose a franchise or privilege tax on its businesses. Even so, every multi-member LLC must submit an annual tax return purely for informational purposes. Check out the Department of Taxation’s Pass-Through Entities page for more information.
Your LLC might be off the hook for business-related federal and commonwealth taxes, but that doesn’t mean it gets to skate by tax-free. There are certain circumstantial taxes your LLC might owe. The Sales Tax and Use Tax, for example, are for any business that sells merchandise. And any business that maintains employees is subject to a Withholding Tax and Unemployment Tax. If this describes your LLC, register for the appropriate taxes on the Virginia Tax Online Services page, or by submitting Form R-1 (Withholding, Sales, and Use taxes) or Form VEC-FC-27 (Unemployment Tax).
Depending on your LLC’s location, it may also owe a local tax to its city, municipality, or county. Consult your local government’s website to find out.
The Articles of Organization may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.
Real estate brokers, for example, must obtain licensure through the Virginia Real Estate Board before doing business in the commonwealth. And if our friend Fanny wanted to expand into landscape architecture, she would need a license from the APELSCIDLA Board. To find out if your LLC needs any particular licenses, pay a visit to the Department of Professional and Occupational Regulation website.
Certain cities and counties require their own specific licenses too, so you should also check with your local government.
After you’ve completed all the steps above, your LLC will be off and running. In the midst of making deals, allocating income, hiring employees, and everything else that comes with operating a business, don’t forget that Virginia has certain annual maintenance requirements for its companies, specifically the Annual Registration Fee.
The commonwealth doesn’t require Annual Reports like many states do, but each year, your LLC will need to pay a $25 fee by the end of it’s anniversary month. Mark it down on your calendar, because late payments incur an additional $25 penalty, and if you skip the payment entirely, the commonwealth can administratively dissolve your business.
You can pay the Annual Registration Fee online or by mailing it to one of the addresses listed in the name reservation an Articles of Organization sections.
And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your Virginia LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.
Need Help Creating Your LLC?
If you even skimmed this guide to look over the steps, you likely got a sense of how many moving parts there are when starting an LLC. Can you do it all yourself? Absolutely. We have complete confidence in you.
But if you’d rather hand it off to someone else and not have to worry about it again, we recommend using an LLC formation service. This way, you can go about your other business responsibilities with the confidence that everything will be submitted correctly and punctually.
Plus, an LLC formation service can handle maintenance items like Annual Reports, so you can take them off your to-do list. And on top of that, many services also provide a registered agent.
Sound good? Whether you know that you’ll need an LLC service or you’re just exploring your options, take a look at IncFile and Northwest Registered Agent. These are two of the top services available. And you can take our word for it because we’ve done a whole lot of research on the topic.