- Step 1. Naming Your Virginia LLC
- Step 2. Choosing a Registered Agent
- Step 3. File Your Articles of Organization
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN/Tax ID Number
- Step 6. Keeping Your LLC Running
- Virginia LLC Resources
Step 1. Naming Your Virginia LLC
When naming your Virginia LLC, there are several things you need to keep in mind to make sure that the name is legally acceptable and available for use.
Legally Required Designation
According to Virginia Law, the name for your LLC must contain the phrase “limited liability company” or one of the following abbreviations:
- Limited Company
When choosing a name for your LLC, make sure that it is unique and doesn’t infringe on an existing business. You also want to choose something that is easily searchable by potential clients or customers.
- The name you choose should not already be in use by another business or LLC operating in Virginia. You can perform a search of available names to help narrow down your options.
- Restricted words, such as Bank, Attorney, and University, may require additional paperwork and the presence of a properly licensed individual in your LLC.
- You may reserve an LLC name for up to 120 days by filling out an application with the Virginia SCC. The application must be mailed and costs $10.
- Check to see if a domain name is available for your LLC’s name. Even if you don’t want a business website right away, purchasing the domain name ahead of time can save you future hassle.
There are certain words that you cannot include in your LLC’s name, as they may cause confusion between your business and a government entity. These words include things like:
- State Department
Step 2. Choosing a Registered Agent
In the state of Virginia, you are required to appoint a registered agent for your LLC. The registered agent is an individual or business entity who is responsible for receiving all tax forms, legal documents, notices of lawsuits, and official government communications, effectively acting as a point of communication between your business and the state of Virginia.
The registered agent that you choose must be a resident of Virginia or a business, such as a registered agent service, that is authorized to conduct business in the state. Any individual in the LLC, including yourself, can be a registered agent if this criterion is met.
Step 3. File Your Articles of Organization
To start the official process of establishing your LLC, you will need to file the Articles of Organization with the Virginia SCC. There are a few requirements for filing, which we will discuss below.
This information is a required part of the Articles of organization and it must be included for your LLC to be established.
- Your LLC’s name
- The name and address of your registered agent
- The LLC’s principal office address
- Signatures of the LLC’s organizers
Keep in mind that PO boxes are not allowed as addresses for either your LLC’s principal office or the registered agent’s address.
How to File
You can file your Articles of Organization online, in-person, or by mail, whichever is easier. There is a filing fee of $100 regardless of the method, and there may be additional fees depending on the mailing services you use.
As of January 2020, the Virginia Clerk’s Office does not allow for expedited services for paper submissions. With both mail and in-person filing, you can expect the processing time for your LLC to be around 1 to 3 weeks, with in-person filing taking less time and mail filing having the longest processing time of all the methods.
When filing online, there are two options. The first is to use the SCC efile website. This website allows you to create an account, log in to the website, and then enter all of the required information for the Articles of Organization online. After you have entered the information, you can select the pay and file button, completing the process.
The second option for online filing is to submit a PDF of the Articles of Organization that you filled out by hand. You can use the same website for submitting this, but instead of selecting the efile express option, you need to select the “submit a PDF” option that can be found under “PDF submission.”
Online filings are processed immediately and in real-time, so there is no need for expedited servicing; your LLC can be formed the same day as you submit the paperwork.
To file your Articles of Organization by mail, send the completed document in a secure envelope to this address:
State Corporation Commission
PO Box 1197
Richmond, VA 23218
You will also need to include a check for the filing fee of $100 made out to the Virginia SCC. Remember not to send cash in the mail, as this will not be accepted. Checks are the only acceptable form of payment for mail filing.
To file your Articles of Organization in person, bring the completed document and a form of payment (either check, cash, or card) to cover the $100 filing fee to this address:
State Corporation Commission
Clerk’s Office, First Floor
1300 E. Main St.
Richmond, VA 23219
Using an Assumed Name
While your LLC’s official name has to be on the Articles of Organization, Virginia does allow LLCs to conduct business under an assumed name, otherwise referred to as a fictitious business name or a DBA name. This means that while your LLC has a specified name, you can do business under a different name; this may come in handy for someone who registers an LLC under their name but doesn’t want their real name associated with their business.
If you are choosing to use an assumed name, you will need to file an additional certificate of fictitious name with the Virginia SCC at the same time you file your Articles of Organization. There is a $10 filing fee for this form.
Step 4. Create an Operating Agreement
An operating agreement isn’t required by the state of Virginia, but it is a good idea to have one established. This legal document outlines all of the rights and responsibilities of every LLC member and its managers, and can also establish how the LLC is managed (member-managed vs manager-managed).
By clearly establishing the expectations and requirements for each member and manager of the LLC, you can avoid conflicts caused by miscommunications and can protect your liability better in the cause of lawsuits. If you do not have an operating agreement, Virginia state LLC law will govern how your LLC should operate in the event of a conflict, something which may not be in your best interests.
You can use an online template to help you get started drafting your operating agreement. Remember that you don’t need to file this form, but you should keep it on hand and treat it like the important business document it is.
Step 5. Get an EIN/Tax ID Number
Your Tax ID number, also known as an EIN (Employer Identification Number), is required by the IRS for LLCs that have more than one member. It is like a social security number for your business and will help identify your business on tax documents.
You will need an EIN to hire employees, open a business bank account, and file or manage your federal and state taxes.
If you are a one-member LLC, you will only need an EIN if you choose to hire employees or you want to tax your LLC as a corporation instead of a sole proprietorship.
It is free to receive an EIN through the IRS and can be requested either online or through the mail. If you do not have a social security number, you will need to file through the mail.
You can complete the EIN application form through the IRS website here. This is the quickest way to request the EIN and you will receive your number as soon as the application is completed.
If you want to request your EIN by mail, you can fill out this form and mail it to the address below. Leave section 7b blank if you do not have a social security number. Once you mail the form off, you can call the IRS at (267) 941-1099 to follow up on your application. This step is especially important for international EIN applicants.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6. Keeping Your LLC Running
Once you’ve established your LLC and received your tax ID number, you can officially start doing business under your LLC. However, there are some additional Virginia requirements that you should keep in mind if you want your LLC to operate smoothly and without legal issues.
Pay Annual Registration Fees
Virginia doesn’t require LLCs to file annual reports, but they do require that an annual registration fee be paid. This fee is $50 and should be paid each year on or before the last day of the month in which your LLC was created; the registered agent will receive a notice detailing the due date of the fee before it is due.
You can pay the fee either online through the Virginia SCC website, by mail, or in person. If you don’t pay the annual registration fee by its due date, you will be given a $25 penalty. If the fee hasn’t been paid within three months of the due date, your LLC will be terminated and you will not be able to perform business under it anymore.
Separate Your Business Finances
Once your LLC is established, it is important that you start to separate your business and personal finances and assets. In the case that your LLC is sued, your personal assets will be safe from liability, as your LLC and its assets will be the ones named in a lawsuit.
It is a good idea to open up a business checking or credit account to handle all of your finances, in addition to hiring a business bookkeeper or accountant. Doing this can help you keep track of your taxes with ease, build your professional reputation with customers, and can help build a relationship with your bank that may make it easier to secure future loans.
You will need to have your EIN on hand to open an account for your LLC, in addition to the operating agreement and the Article of Organization. There may be additional documents required depending on the bank, so make sure to double-check and organize everything you need before showing up to open a business account.
Keep in mind that some banks charge fees or have required minimum balances, so you will need to understand all of the service options available to you when setting up a business bank account, only choosing what works the best for your LLC’s needs
Keep up With Federal and State Taxes
Virginia LLCs are considered a pass-through tax entity, meaning that your LLC will not pay taxes, but you as an individual member of the LLC will. You will need to choose a tax structure that works for your LLC – either sole proprietorship, a partnership, an S Corporation, or a C Corporation – and file your taxes accordingly. You can read more about the differences in these tax structures here.
If you elect to have your LLC taxed as a corporation, you will need to fill out the IRS Form 2553. As a corporation, your LLC will have to file a separate tax return, unlike with a sole proprietorship or partnership where you only have to file an individual tax return. Corporate tax for your LLC is 6 percent in Virginia and will need to be paid to Virginia’s Department of Taxation (DOT).
State Employer Taxes
If your Virginia LLC has employees, then you will need to pay state employer taxes. To do this, you will need to register your business through the Virginia Department of Taxation’s website. From there, you’ll use form VA-5 or VA-15 to file withholding taxes on a periodic basis. Each year, you will need to use form VA-6 to reconcile the LLC’s tax withholding.
You will most likely also need to register to pay state unemployment taxes. This is done through the Virginia Employment Commission’s website. Each quarter, you will use forms VEC FC 20/21 to report wages and pay the accompanying unemployment taxes.
Sales and Use Taxes
If you will be selling goods in Virginia with your LLC, you must collect and pay sales tax on any products sold. You need to register with the Department of Taxation online to declare this purpose for your LLC (you will receive a certificate of registration) and then make sure to submit sales tax returns either monthly or quarterly to the DOT.
Acquire Necessary Permits and Licenses
Virginia doesn’t require a state business license in order for you to conduct business with your LLC, but it does have requirements for specific business activities or occupations, which include, but aren’t limited to, cosmetologists, architects, lawyers, real estate brokers, and accountants. You can access a full list of professions and businesses that may require a license through Virginia’s Department of Professional and Occupational Regulation website.
Additionally, each city and county in Virginia has differing requirements about which licenses may be necessary for your business. So even though a state license is not required, you may find yourself having to acquire a license through your local city government. You can check your county’s requirements for business licenses here, and don’t hesitate to contact your local county’s government website for more instructions on meeting permit and licensure requirements.
Fees for obtaining a local county or city business license in Virginia vary based on location but can be as little as $15 per year, ranging all the way up to a couple of hundred dollars per year. You will need to renew your license or permit between every 1 and 3 years, depending on local requirements.
When it comes to federal permits and licenses, you can use the Small Business Administration’s website to find out which type of license, if any, is required for your business. You can also access free business counseling services through the website if you need help understanding any type of federal permit or licensing requirement.
Virginia LLC Resources
These resources can be helpful during every step of the process of establishing and operating your LLC in Virginia.
- Virginia business entity name search
- Domain name search
- IRS EIN assistant
- Virginia new entity resources
- Virginia annual registration payment
- Calculate individual income tax
- Calculate state employer withholding
- Virginia Department of Taxation
- Virginia county listing with license requirements
- State licenses and permits
- Federal licenses and permits
Though starting to file an LLC in Virginia may seem overwhelming, once you understand the steps and get to work on the process, you will realize that it is not actually that complicated of an procedure. As long as you make sure to meet all filing requirements and keep up with the yearly expectations of your LLC, you will be sure to have a smooth, legally running LLC for as long as you need it.
Check out these most frequently asked questions about Virginia LLCs to understand more about establishing and running your LLC effectively.
It costs $100 to file to establish an LLC in Virginia. You may pay an additional $10 fee to reserve your LLC name before filing or an additional $10 to file to operate a business under an assumed name in the state.
The most cost-effective way to start an LLC in Virginia is to file online, without reserving an LLC name ahead of time and without conducting business under a fictitious name. This is also the fastest way to start an LLC in Virginia.
How much your Virginia LLC pays in taxes depends on your tax structure. Sole-proprietorships and partnerships will most likely file individual income tax returns and pay self-employment taxes, while S Corporations and C Corporations will file a separate tax return for their business and will have to pay state corporation tax.
Your Virginia LLC may also be liable for state employer taxes or sales and uses taxes, depending on the type of business conducted.
You don’t have to file an annual registration report in Virginia, but you will need to pay the annual $50 registration fee each year if you want your LLC to stay established.
How long it takes to establish your LLC in Virginia depends on if you file by mail, online, or in-person. If you file online, you can often be established as an LLC the same day. In-person filing may take a few days, and mail filing can take between 1 and 3 weeks to officially establish your LLC.
While it’s true that you can completely set up an LLC all by yourself, if you find that you are massively confused by the establishment of your LLC or the tax classification process, it may be a good idea to hire a professional. Either a specialist in business law and LLCs or a professional accountant can help you understand the best tax and management structure for you and your business, taking some of the stress of the start-up process off of your shoulders.
If you have finished conducting business with your LLC in Virginia, you will need to follow several steps to dissolve it, especially if you want to avoid any future liability connected with your LLC. Typically, these steps will be outlined in your Articles of Organization or your operating agreement, so you should refer to these documents for what to do.
Virginia’s LLC Act also allows the collective written consent of all LLC members to act as a notice of dissolution. You can read more about this process here.