Starting a new LLC in Virginia is actually relatively easy, and generally only takes a few hours of work spread out over a couple of weeks.
While there are certainly many different paths you can follow, this article will largely describe the “easy” method that we generally recommend to first-time entrepreneurs as a kind of checklist so they can ensure they’re staying on track.
Specifically, the ten steps that we will be covering are:
- Choose a name that meets the requirements set by the Virginia SCC.
- Appoint a registered agent and determine your registered office.
- File your articles of organization digitally on the Virginia SCC website.
- Prepare an operating agreement for your new business.
- Obtain an EIN from the IRS.
- Open a new business bank account using your EIN.
- Acquire the permits and licenses you need to operate in your intended location.
- Ensure you’re following all industry best practices and relevant compliance laws.
- Begin business operations using your new business bank account.
- Remember to renew your LLC every year.
Note that this article does not constitute legal advice, and that you must speak with an attorney if you are looking for insight into your particular case.
Instead, this article simply explains the basic ten steps that, in our experience, most entrepreneurs will follow as they begin to start up their new businesses.
1. Choose a Name for Your Business
The first step in registering your Virginia LLC is choosing your company name. When you do choose a name for your LLC, make sure it complies with the Virginia naming requirements.
The State Corporation Commission provides a comprehensive list of Virginia’s naming requirements, so it’s wise to review these guidelines fully before you begin.
In general, the name of your company must include the phrase “limited liability company” or an acceptable abbreviation (LLC), and must not include a restricted word or phrase such as “bank,” “attorney,” or “engineer” unless you meet the specific qualifications for such words.
Do not include words or phrases that are confusingly similar to government agencies, such as “Federal,” “State Department,” or “FBI.”
Additionally, you should perform a Business Entity Search for your intended name to ensure the name is actually available, and isn’t taken by some other business.
Finally, we recommend that you check to make sure the web domain for your intended name is available as well.
If a quick Google search turns up another business that’s confusingly similar to your own, or if your intended domain name is taken, it may not be wise to register a new business under that name.
2. Appoint a Registered Agent
Next, you’ll need to appoint a registered agent to receive legal documents on behalf of your new business.
Often, this means either planning to act as the registered agent yourself or contacting a business attorney who will act as the registered agent on your behalf.
The agent whom you appoint must meet certain requirements. Specifically, they must be:
- A Virginia resident; or,
- A corporation that is authorized to do business in Virginia.
If you choose to appoint a Virginia resident as your LLC’s agent, they must be:
- A member or manager of your LLC;
- A member or manager of an LLC that is a member or manager of your LLC;
- A general partner of a general or limited partnership that is a member or manager of your LLC;
- A trustee of a trust that is a member or manager of your LLC; or,
- A member of the Virginia State Bar.
In short, if you choose to appoint a Virginia resident as your LLC’s agent, they must be affiliated with your LLC as a member or manager by one of the extensions given above.
No matter whom you choose to appoint as the agent, they must have a physical street address in the Commonwealth.
3. File your Articles of Organization
In order to formally register an LLC in Virginia you must file Articles of Organization with the Virginia State Corporation Commission (SCC).
You can do so online using the State Corporation Commission’s Clerk’s Information System (CIS).
The application will ask for your LLC’s name, the name and address of your registered agent, your LLC’s principal office address, and the signatures of all organizers.
The filing fee for this document is $100.
4. Prepare an Operating Agreement
Although this step is technically not required in the Commonwealth of Virginia, you will find it favorable to complete it anyways.
Essentially, an operating agreement is an internal document that will help you establish how you plan to run your LLC.
This includes the rights and responsibilities of all the members and managers.
The reason why setting up an operating agreement for your Virginia LLC is so favorable is because it reinforces your limited liability by formally establishing your LLC as a separate business entity.
If you choose to forgo this step, be advised that Virginia’s default LLC laws will govern how your LLC may operate.
5. Obtain an EIN
Next, you’ll need to contact the IRS to receive an Employer Identification Number(EIN).
EINs are nine-digit numbers that are assigned to all businesses by the IRS for tax identification purposes.
Think of it as the social security number for your new business.
You’ll need an EIN in order to open a business bank account, file and manage your taxes, and hire employees, so it’s critical that you obtain your EIN as soon as possible.
6. Open a New Business Bank Account
After you receive your EIN, you should go to a bank that offers business services and open a new business bank account.
Make sure to route all business funds to and through this account. Never mingle your own money with that of your business.
Involving your personal assets with those of your business is often referred to as “piercing the corporate veil,” and it’s a great way to end up liable for any losses or lawsuits incurred by your business.
For this reason, it’s often wise to not only open a new checking account, but to open a new credit card as well.
Similarly, get in contact with a business accountant and find a way to manage your books in order to make a clear distinction between your own assets and those of your business.
7. Acquire the Relevant Permits and Licenses
In order to operate in most Virginia counties and cities, you’ll need to acquire a variety of licenses and permits, as well as business insurance, to show that you’re a reputable establishment.
Bear in mind that virtually all Virginia businesses will need some kind of business license to lawfully operate.
To begin, contact the Virginia Department of Professional and Occupational Regulation to talk about any licensing requirements you may have.
You can also view some basic information about this process on the VDPOR application website.
You should note that Virginia does not have a single license that pertains to all business types.
Instead, you may have to apply for a different permit or license depending on the product or service you’re selling, the structure of your business, and the location you’re operating in.
For example, Virginia barbers need to complete a training program and pass a written and practical exam.
Similarly, Richmond requires different permits based on the goods and services your business offers.
Because many local business licenses are set by city ordinances, these licenses and permits are often subject to change without notice.
Make sure to check with your local government for the most up to date information on the requirements your business needs to satisfy for that area.
8. Purchase Business Insurance
Next, keep in mind that business insurance is an optional but important part of any new business.
Insurance provides a safety net for your business, allowing you to manage potential risks and grow your business without having to worry about potentially catastrophic incidents.
When you start a new venture, you want to make sure that your investment is safe by purchasing the correct type(s) of insurance.
For example, all Virginia businesses with two or more employees must purchase workers’ compensation insurance, as required by Virginia law.
It’s also highly recommended that you purchase general liability insurance and professional liability insurance that suits the needs of your business.
9. Begin Operations
Once you’ve settled all of the matters listed above, you should be ready to begin operations!
If you have any questions about running or maintaining your business, or if you’re worried about business compliance in general, you should speak to an attorney about your case.
Often, an experienced local business attorney can provide insights into running your business safely and efficiently, freeing you up to focus on the marketing and sales side of things.
10. Renew Your LLC Annually
Finally, make sure to pay the annual registration fee to renew your LLC with the Virginia SCC.
This fee is currently $50, and is due on the last day of the month in which the LLC was registered to transact business in Virginia.
For example, if you registered your business on March 14th, 2021, you must renew your LLC’s registration by March 31st, 2022.