Forming an LLC in Virginia a Step by Step Guide
Congratulation’s on your decision to start a new business in the state of Virginia. Before we start let’s take a quick look at exactly what is a small business LLC and why it’s a great way to get your new business idea of the ground and up and running so you can start growing running and building your future.
What is a Limited Liability Company or “LLC”
- The acronym LLC stands for limited liability company. In Virginia due to the business structure of an LLC it offers the personal liability protection of a corporation with a pass-through taxation of a sole proprietorship or partnership.
- By forming a VA LLC for your business you are creating a great way to protect your personal assets in the event of your business being sued. This is one of the most popular reasons that people will opt for an LLC.
- An LLC can be owned by a single individual or can be owned by more than one person. An Virginia LLC with one member who is known as a single-member LLC if your LLC will have more than one owner it will be known as a multi-member LLC
1. Pick a Name for your LLC
There are laws concerning the naming of your LLC and how you use the name. Following the Virginia law, an LLC name must contain the words “Limited Liability Company” or “Limited Company” or the abbreviations “LLC,” “LC,” “L.L.C.,” or “L.C.”
Your businesses chosen name must be unique and different from the names of any other business entities currently on file with the Virginia State Corporations Commission, Office of the Clerk.
How can I check for my business name? Names may be checked for availability at the Virginia business name database.
We are not yet ready to move forward but have a name, can I reserve the name?
That’s a great question and the answer in short is Yes you can. Reserve your new business name for up to 120 days.
You will need to file the following form;
Application for Reservation or for Renewal of Reservation of a Business Entity Name (Form SCC631) with the Commonwealth of Virginia State Corporation Commission. The reservation must be filed by mail. The filing fee is $10. You can find the form here SCC631 Form Virginia
2. Pick a Registered Agent
Appointing your registered agent is a very important part of the business registration process. Your registered agent will be the point of contact for your LLC. Their job is to accept paperwork and documents delivered to the address and ensure these documents reach the members of the LLC.
Your registered agent will also be known by some states and people as the agent of process, as they will also receive any legal or court documents should your company be sued.
You cannot appoint anyone as your registered agent and you have a few options in Virginia;
A Virginia resident who is: a member or manager of the LLC.
- Option 1: You can be your LLC’s Registered Agent in Virginia if you are an LLC Member or Manager.
- Option 2: Another LLC Member, LLC Manager, or employee of your LLC can be your LLC’s Registered Agent.
- Option 3: You can hire a Virginia Registered Agent Service, also known as a Commercial Registered Agent.
The registered agent must have a physical street address in Virginia.
3. Filing your articles of organization
A Virginia LLC is created by filing Articles of Organization (Form LLC-1011) with the Virginia State Corporations Commission. The articles must include:
- the LLC’s name
- the name and address of the LLC’s registered agent
- the LLC’s initial principal office address, and
- signatures of the LLC’s organizers.
The articles may be filed online at the Virginia New Entity Formation webpage, or by mail. The filing fee is $100.
Recording the Articles of Organization
When you have all the data you require to form your LLC, you can document the Articles of Organization with the Virginia SCC to make your business official. Using the following methods.
- On the web
- Face to face
Charges and Processing Times
There are two alternatives to register your LLC, on the web:
SCC eFile (Recommended)
You can form your LLC online, utilizing the Virginia SCC eFile framework, To start, you will be asked to make a record. When you make a record, you can sign in and enter the data needed on the Articles of Organization into the fields. At the point when that is finished, click the “Pay and File” click to continue.
Transfer a PDF To present a PDF of the Articles of Organization for recording, visit the Virginia SCC eFile Document Submission site.
Mail To record the Articles of Organization via mail, send the finished report and a check payable to Virginia SCC to:
State Corporation Commission
PO Box 1197
Richmond, VA 23218-1197
Keep in mind, you may not want to send money through the mail. On the off chance that you are recording the Articles of Organization via mail, Facilitating the Articles of Organization is just accessible for online entries.
In-Person To record the Articles of Organization face to face or through messenger, bring or send the archives, alongside the right installment, to:
State Corporation Commission
1300 E. Principle St.
Richmond, VA 23219
Charges and Processing Times Update
As of January 15, 2020, the Virginia Clerk’s Office isn’t offering facilitated administration for paper entries. In the event that you print and mail your Articles of Organization, it will take more time to be acknowledged. Web based recording is the best approach.
4. Creating your LLC’s operating agreement
As with most states and forming a new business an LLC operating agreement is not required in Virginia, but is highly advisable.
This is an internal document, meaning it’s only for the members of the LLC and can be thought of as a similar document to an emplyee contract for the corporation. In that it establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed.
It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. We highly recommend having an operating agreement because in the absence of an operating agreement, Virginia state LLC law will govern how your LLC operates.
5. Now you need to get your Company an EIN number
The caveat here is if your new LLC has more than one member you will need to get an EIN immediately. So Single member LLC owners can skip past this step for now, providing you are not employing anyone just yet (read more below)
Multi member LLC’s
However if your LLC has more than one member, your LLC must obtain its own IRS Employer Identification Number (EIN), even if it has no employees.
One or Single member LLC’s
If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (also known as a disregarded entity).
Applying for your new EIN is easy you can get your new EIN by completing an online EIN application on the IRS website. Its a very quick application and for once when dealing with the IRS there is no filing fee.
6. Annual Fees Keeping your LLC alive and compliant
Every Virginia LLCs and foreign LLCs authorized to do business in the state are required to pay a $50 annual registration fee. The fee is due each year on or before the last day of the month in which your LLC was created.
The Virginia Corporations Commission will mail you a notice to the LLC’s registered agent at the registered office address. The Commission must receive the LLC’s annual registration fee payment on or before the due date stated in the notice of assessment or a $25 penalty will be imposed.
Annual registration fees may be paid online at the Corporations Commission SCC efile web page or by postal mail.