You’re ready to start your own Virginia business, and we’re ready to provide you with a complete guide on how to be successful every step of the way!
This guide walks you through all the steps to consider from beginning to end when starting an LLC or corporation in Virginia, including any helpful information you may need along the way such as prices, timeframes, forms, and links to helpful resources.
Starting a business in Virginia is straightforward and affordable. The Virginia State Corporation Commission (SCC) files your business formation documents received in about one business day, which legally creates your business. The business formation filing fees run an LLC $100, and a corporation about $75 (more if you authorize over 25k shares). The SCC provides business owners with an eFile system called the Clerk’s Information System (CIS), which processes business documents in real time and provides helpful resources.
What is a Virginia Business?
A Virginia business is a private, commonwealth-owned corporation that is established for the sole purpose of conducting business in Virginia.
If you have never done business in Virginia, a Virginia business will be an entity that you can start, rather than one you will eventually become liable for. A Virginia corporation or LLC you form will not be liable for civil and criminal liabilities for your activities as a director, officer, or employee of the corporation or LLC, nor will it be subject to personal liability for debts and obligations of the corporation. Virginia residents who are not US citizens cannot form a corporation or LLC.
Your business will be a legal entity governed by state law, subject to the same general and local laws as other entities.
Steps of Starting a Business
1. Obtain a Secretary’s Certification (SCC Form 603) or (CIS Form 8832)
The first step in starting a business in Virginia is to obtain a Secretary’s Certificate or CIS Form 8832 (this is only necessary if you intend to file a separate personal income tax return). Both documents are required under the Uniform Commercial Code (UCC) for a Limited Liability Company (LLC) and you need one of these forms if you intend to file your individual income tax return as an individual and you operate an LLC. These forms are also required by the IRS for all LLCs.
When you apply for this form from your local Revenue Authority, the form requires that you include (1) your social security number, (2) your mailing address, and (3) a copy of a valid business address where you intend to operate.
Choose Your Legal Structure
Whether your business is based in the Commonwealth or across the country, you’ll want to consider any of the three available forms of business organization: Limited Liability Corporations (LLCs), Limited Liability Partnerships (LLP’s), and the Partnership of a Limited Liability Company (PLCC).
All three forms are similar in form, but distinct in structure.
An LLC is created by filing a “statement of organization,” form NO.1 (formerly called a S-1) with the SCC. The entity name is the name of the business and the name of each member. If you include more than five members, you must file a separate statement of members. No member can have the same name as any other member and you can’t include any individual who is the owner of a business you own in another state.
Virginia has sole proprietorship laws that allow anyone to form a business and use it as their own. When sole proprietorship is combined with a limited liability corporation, this business form is the best option for anyone that wants to start a Virginia business.
Starting a sole proprietorship in Virginia is easy as pie and one of the easiest forms of starting a business you can do in the state.
The Sole Proprietorship form is available on the SCC website and can be submitted through any SCC office location. This form allows you to create the business entity that you and the other partners of the LLC will operate under. The only requirement is that you be the signatory on the LLC incorporation documents.
Any partnership must be a “public” partnership (where at least 51% of stockholders are not private interests). A partner is anyone with 1/3rd stock ownership and who can vote. A partnership is a type of limited liability company. A limited liability company is a corporation in the USA where partners are individuals and they have no personal liability for debts incurred by the business.
A limited liability company is the structure for entities which are owned and managed for profit by one or more people. Limited Liability Companies can be created with names as complex as “HOMNUBSSBLV LLC” or as simple as “Jim, Jim, Bob, Chris, Kevin, Ian, John, Brad and Jane, Stitch-Hogged LLC.” The forms can be filled out at any site in Virginia, and filing fees vary from business to business.
Forms are filled out at www.scconline.virginia.gov. Instructions and links are in the below infographic.
A corporation is the entity in which one or more people form to conduct business.
To form a corporation, you need:
A general intent of corporation; An officer to control the corporation; A place of business; A general place of business (PBO); or Your name, business address, and signature.
Forms are available here.
To form a limited liability company, you need:
An initial principal place of business;
A qualified general business purpose;
A qualified LLC name; and
A qualified director or officer.
The LLC forms are available here.
A company (corporation) has the legal right to be treated like any other business when it comes to paying taxes, owning real estate, hiring employees, and selling products.
A partnership (LLP) is formed by multiple partners who are equally responsible for the company and its operations.
Choose Your Location and Name
You can choose to form a Limited Liability Company or a Limited Partnership in Virginia depending on your business needs.
A Limited Liability Company, also known as a LLC, requires the formation of two separate entities: the Limited Liability Company, also known as the LLC, and the Name Holder Corporation (also known as the NRS Corporation), or the name on the Limited Liability Company’s bank accounts. The NRS Corporation is the corporation’s official name and is also the legal name of the entity.
An LLC name can be registered for free. The name on the NRS Corporation (if you decide to be a name holder) can be purchased for $300 for each corporation share (and up to a $3000 for individuals).
Choose a Trade Name
There are many ways to go about selecting a trade name.
The SCC website has a great resource that walks you through finding and choosing a trade name by making you create and save a few choices for future use. There are other resources on the web, though, like Tools for Tinkering, which helps you find and save an option for each term you may want to choose.
It can be easy to get a cool (or even humorous) name, but make sure that you decide upon a name that will work for your company, even if you’re not a “tinkering” kind of person. You also want to choose a name that is not already taken. And never use a business name that has already been assigned to someone else.
File for Your Tax ID Number
The best place to start with the business forms is with your tax ID number. If you’re a sole proprietor or an LLC/corporation company, you’ll need this number to file your taxes in April, and you can use it for anything related to the business (including checks, utility bills, and credit card payments).
The simplest and easiest form to get your business’s tax ID number is from the IRS, but be sure to double-check the details. You may also get it from the SCC, the SBA, or the SBA’s VSOE.
If you have a bunch of entities or pay separately to your accountant and the SBA, you’ll need to create two different SSN’s from the SSA. Then, you can simply fill in your “full-time employee” SSN on the IRS form (also called “Form SS-4”) and have your employees use their own SSN.
Register with the Department of Consumer Affairs
Register with the Virginia Department of Taxation to ensure you are collecting sales and use tax. You may also need to register with the Virginia Department of Taxation for the creation of a new business.
Register your business with the DMV and obtain driver’s licenses, licenses, and vehicle registration certificates.
Purchase liability insurance coverage from a Virginia-licensed insurance company.
Choose a Virginia business name, address, and telephone number. If you don’t own a home, you may also use a P.O. Box for your business.
Once you have established your new business, it’s time to register your business.
Obtain Required Licenses & Permits from the State
Every business entity or business entity member is required to comply with the state’s two primary licenses.
The state corporation license provides the business owner with legal proof that the company exists as a public company, is owned by people who are at least 18 years of age and are a full-time resident of Virginia.
Obtain a Vendor Registration Certificate with the State
There are over 300 forms to file with the SCC to receive a vendor registration certificate. Obtaining a vendor registration certificate from the state is not an additional burden for most companies, but it is recommended as a way of increasing the security of goods being distributed by the business. An alternative solution for large companies is to obtain a corporate vendor registration certificate with the SCC.
Obtain Required Licenses & Permits from Local Governments
Regulation Virginia (Reg. Va.) , which has regulations for LLC and corporation formation in Virginia, specifies a handful of different licenses that you must be fully licensed in order to own and operate a business in the Commonwealth. These licenses are required in order to:
- Operate a business with employees
- Include persons under 21 in the business
- Take deposits in Virginia
- Use most credit cards in Virginia
- The permits and licenses you need include:
- Licenses for taking deposits with credit cards
- License for employee banking
- License for payroll services in Virginia
- Licenses for beer, wine and liquor sales
- License for liquor sales with beer and wine permits
- These are only a few of the licenses required to operate a business.
Create your Financial Plan for your business <<END
Next we’re going to walk you through steps that you can take before you start your business so you’re prepared to launch. You’re more likely to be successful once you’re ready.
Complete a professional business plan and get it reviewed by an accountant or attorney to ensure your business is set up correctly, which will save you time and money.
Get Legal Counseling: Get an attorney or accountant to look over your financial plan and advise you on best business practices. A reputable Virginia attorney or accountant with experience in your industry can provide you with their perspective on your company and the legal options available to you if your company fails.