You’re about to embark on a long and exciting journey, one full of hard work and rewards: starting a new business. With wide eyes and big dreams, you’re about to enter the world of business ownership.
But beyond the initial thrill of the startup decision, there’s a lot to consider. In fact, if you’ve never done it before, starting a business can seem like an intimidating mountain of work. Out of all your responsibilities and tasks, you might not even know where to start.
But have no fear. The good news is that once you have everything planned out and understand the process, the formation process is smooth sailing. And this is your go-to guide.
Everything you’ve been wondering about, everything you need to do, every question you have – it’s all right here. By the time you’re through these 16 steps, you’ll be a bonafide business owner who’s prepared for sustained success.
1) Write a Business Plan
Jumping into this endeavor without goals, directives, or a sense of direction can lead to a scattered, unproductive business.
A business plan lays the groundwork for your future success. It helps you analyze key elements of your business and forge pathways to achieve your goals. Here are a few things you should consider including in your business plan:
- Executive Summary (a separate document that gives a complete overview of your business’ purpose, plans, goals, competition, opportunities, etc.)
- Company description
- Market Analysis (opportunities, competition, etc.)
- Managerial or organizational structure
- Products and/or services
- Marketing strategies
- Funding goals
- Financial projections
Business plans aren’t just great for internal operations, but they give your business legitimacy in front of potential investors, customers, partners, and more. Need help? Check out this guide from the U.S. Small Business Administration.
2) Decide on a Business Name
You might’ve come up with the perfect name right away. If so, consider yourself lucky.
Sometimes, deciding on a business can be difficult, requiring brainstorming meetings and late-night rap sessions. That’s because your name is your business’ identity and reputation. It should be something that’s unique and memorable but also defines your business purpose.
When you choose a business structure (see step 3), be aware that they each come with their own naming restrictions, which you can find on this page. So, whether you go with a corporation, LLC, or something else entirely, make sure you’re following the state’s rules.
But that’s not all. Any name you choose must not be taken by another business. Before you put a name on legal documents, advertising, etc. you should search for it to see if anyone else has already claimed it in West Virginia. If not, you’re good to go. Lock it down by filing a name reservation or using it on your formation documents.
3) Decide on a Legal Structure
There are only a few types of business structures, but each one dictates some important parts of how your business will run.
The most popular types are the sole proprietorship, general partnership, limited liability company (LLC), S corporation, and C corporation. Most small businesses go with the LLC because of its unique blend of flexibility and personal asset protection.
However, you shouldn’t make this decision without reading up on all of your options. We’ve done plenty of research on each business type and developed side-by-side comparisons. Check out our LLC vs. Corporation and LLC vs. Sole Proprietorship comparison guides for a closer look.
4) Choose an Agent of Process
The Secretary of State needs a point of contact for your business, someone who will be available at your registered office address during typical business hours – 9am to 5pm.
This person is called an agent of process, and they serve as an intermediary with the state, receiving all of your company’s important legal communications and relaying them on to you. The West Virginia agent of process ensures that no important state documents, deadlines, or payments fall through the cracks, so you’ll want to choose a person or company you trust.
You can choose either an individual or a business entity as your West Virginia agent of process, but they must:
- Be an individual West Virginia resident or a corporation authorized to do business in the state.
- Have a physical address in West Virginia.
- Have a mailing address in West Virginia (no P.O. boxes allowed).
Remember that an individual agent shoulders much of the responsibility for your business compliance, so it’s often wise to choose a professional (like an attorney, manager, etc.). That said, the requirements are pretty broad, so you can also appoint friends or family members if that’s preferable.
Or, you can choose a registered agent service instead. These companies take care of all your agent of process responsibilities, and some will even handle your business formation and annual reporting as well.
Important: You must continuously maintain an agent of process on file with the Secretary of State. If your agent resigns or you appoint a new one, you’ll need to notify them by filing the appropriate documents.
5) Register Your Business
This is the big one, the step that officially creates your business. No matter which business type you choose, you’ll need to register it with the Secretary of State.
LLCs: Going with a limited liability company? Then you’ll need to file an Articles of Organization. You can find it this West Virginia LLC filing as an electronic submission or a hard copy form. Either way, it costs $100 and must be approved before you can commence business activities in the state.
Sole Proprietorship/General Partnership: There are no official forms or fees to register as a sole proprietor or general partnership. Simply start doing business and that’s it! While this is obviously faster and easier, we recommend incorporating your business because of the personal asset protection LLCs and corporations provide.
Foreign Entities: Any business initially formed in another state that’s expanding to West Virginia doesn’t follow the same procedures. You won’t need to form your business again, but you will need to foreign qualify it by filing an Application for Certificate of Authority. Make sure you foreign qualify before doing business in West Virginia, or you could face some serious penalties.
6) Get an EIN
The Employer Identification Number (EIN) is your ticket to doing state and federal taxes. It’s a nine-digit number, much like a Social Security Number, that identifies your business on tax documents.
If you’re forming an LLC, it will be considered a “pass-through” entity, so the business itself won’t pay federal income taxes. Instead, you and the other members will report income and losses on your personal tax returns.
But this doesn’t mean you can go without an EIN. If your LLC pays any type of business taxes – like Sales, Use, or Unemployment Taxes – or hires employees, you’ll need to get one.
Unsure if you need one? The IRS provides a useful “Do I need an EIN?” link on this page, where you can also apply for an EIN. If you go through the online application process, you’ll receive your number immediately.
Otherwise, you can submit a Form SS-4 by fax to (855) 641-6935 or by mail to :
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
7) Open a Business Bank Account
LLC and corporation owners are required to keep their personal and business finances completely separate, or they risk losing their personal asset protection. To do so, you’ll need a business bank account.
The good news is that opening a business bank account is pretty simple. Just pay a visit to your bank’s local branch and sit down with one of the bankers there. You will need to present your formation documents, an EIN number, and some personal information. Then, you can direct all of your business income and expenses to that account instead of a personal one.
It doesn’t really matter which bank you choose, whether it’s a national giant like Chase or Bank of America or a small, local bank. However, it’s usually easiest to go with the one where you have existing accounts.
8) Handle Any Tax Obligations
Ah, taxes. They’re always part of the picture, especially when you run a business.
Familiarizing yourself with your business’ tax requirements will help you establish a solid financial plan going forward. LLCs don’t need to file a corporate tax return and pay federal income taxes, so you’ll handle these taxes as part of your personal return.
Corporations, on the other hand, will need to pay a Corporate Income Tax, while sole proprietorships/general partnerships will need to pay self-employment taxes.
There are a few other taxes your business may owe in West Virginia, depending on your circumstances:
Business Registration: Every West Virginia business must register with the state Tax Department before doing business. This filing costs $100.
Sales and Use Taxes: Any business that sells goods in West Virginia must pay a Sales and Use Tax at a rate of 6%. Your county or city might have its own additional sales tax, so you’ll want to check with your local government.
Excise Tax: Your business might owe an Excise Tax if it engages in certain activities or sells certain goods. You can find more information here.
Other Taxes: West Virginia maintains other miscellaneous taxes for certain business activities, like the Fuel Tax and the Severance Tax. You can find a full list of other business taxes on the West Virginia Tax Department website.
9) Find an Accountant
Sometimes it’s easier to hand off your financial responsibilities to a professional. Not only will an accountant ensures that your taxes are filed and paid correctly, but they might also find a few ways to save your business money.
Bookkeeping and tax procedures are time-consuming and require some specialized knowledge. Balance sheets, financial reports, cash flow, audits, and much more – an accountant can ensure that your company operates smoothly and streamlines its expenses.
This can be expensive depending on the complexity of your finances, but the benefits an accountant offers can be well worth it.
10) Create an Operating Agreement
An operating agreement constructs a framework of procedures and standards for your business. This is where you can lay out processes for member conduct, asset allocation, compensation policies, voting procedures, dissolution, and much more.
While operating agreements aren’t technically required in West Virginia, they are essential to your business’ stability and success. They provide a safety net in legal disputes and legitimacy in front of banks, courts, government agencies, and other businesses.
You can either draft one yourself using an online template, or you can hire an attorney or an incorporation service to take care of it for you.
Once you’ve drafted your agreement, it must be approved by each of your LLC’s members, then filed with the rest of your business documents. You do not need to submit it to the Secretary of State.
11) Acquire the Necessary Licenses
After filing your formation documents, your business is legitimate, but it might still need specific licenses before opening its doors in West Virginia. This depends entirely on your business type and purpose, but there are three main state licenses you should know:
Professional Licenses: Certain occupations must obtain licenses through specific state boards before doing business in West Virginia. These licenses all go through the Department of Labor.
Environmental Permits: If your business has any impact on West Virginia’s air, land, or water, it will likely need one or more permits from the Department of Environmental Protection.
Building/Zoning Permits: If you plan on building or renovating any structures, your business will need a special permit from your county or city government.
Local Licenses: Your specific city, county, or municipality might have its own licensure requirements. Take a look at your local government’s website to find out.
You can find more about required business licenses on the West Virginia One Stop Business Portal.
12) Consider Business Insurance
Even though it’s not pleasant to consider, there’s always a chance that unforeseen events might take a toll on your assets.
While forming an LLC or corporation offers some personal asset protection, additional business insurance can also protect your business assets in cases of lawsuits, damages, etc. You can acquire insurance for your business products, vehicles, specific occupations and much more.
If you hire employees, you’ll also need to get workers’ compensation insurance. SBA.gov has a useful guide for determining which forms of insurance your new business might need.
13) Build a Website
Your company’s digital presence is just as important as its physical one. Like it or not, most potential customers will find your business online, and if you don’t exist online, you’re missing out.
But don’t worry, you don’t need to be an HTML or web design expert to build a website. Sites like WordPress and Squarespace make it easy to construct an elegant and responsive website, no coding necessary. But if you’re not comfortable or confident doing it on your own, you can always hire a professional web designer to take care of it for you.
14) Launch Social Media Accounts
Making your mark on the digital landscape doesn’t start and end with your website. Most successful businesses also have a robust social media presence on multiple platforms. Facebook, Twitter, and Instagram are all great ways to connect organically with potential customers and develop your brand voice.
Just don’t forget to publish consistent social media content, or you’ll have trouble building a base of followers.
15) Understand Ongoing West Virginia Requirements
After you’ve launched your business, things will likely be moving at 100 miles per hour as you evolve and grow. But in all of the excitement, you can’t forget your state’s ongoing compliance requirements. Every state has its own annual or biennial business requirements.
Every West Virginia business must submit an Annual Report once per year between January 1st and July 1st. The fee is $25 for every business type except limited liability partnerships (LLPs), which must pay $500. Be sure to file on time! If you don’t, you’ll incur a $50 late fee and after 60 days, the state can administratively dissolve your business.
16) Check Out West Virginia Small Business Resources
You’re not on this journey alone. There are plenty of free resources available to make starting and growing your business a smoother, easier process.
A little support can go a long way, and there are a ton of resources available to your budding business if you know where to look. SBA.gov can point you in the right direction. Check out West Virginia’s district office page, which includes this resource publication, for information on business development centers, loan opportunities, financial advising, networking opportunities, and more. You’re bound to find the right resources to elevate your business.