How to pick a name for a Virginia LLC? One of the initial steps to creating any business is deciding on a name. Many people consider the marketing aspect. But you’ll also need to follow legal guidelines.
Virginia Code section 13.1-1012 lists the applicable law. You must include one of the following in the name of any Virginia LLC:
Another critical component of an LLC name is to avoid using terms that you aren’t authorized to perform. This includes many highly-regulated industries, such as legal, medical, or professional services.
You’ll also need to ensure the LLC name is not already in use. Use the State Corporation Commission’s business entity search. It can help you discover what is already taken. Keep clear of closely-related names that may confuse people.
A common technique for many entities is the use of doing-business-as (DBA) names. These allow you to operate under a different name. For example, “Chesapeake Boat Mechanics LLC” can use “Chesapeake Outboard Specialists.”
Even if you don’t want to launch a website, it’s a good idea to consider the available domain names (URLs). Seasoned business owners know that it’s best to get matching domain names right away.
What is a registered agent? Virginia law requires LLCs to appoint a registered agent. This critical role serves as the main point of contact for the LLC.
One of the primary functions is to receive legal service of process. If your LLC gets sued, the paperwork goes to the registered agent. Failing to see these notices can have grave consequences.
You can be your own registered agent or you can hire someone else, such as a service or attorney to fill the role. Many experienced business owners choose to use a registered agent service. It helps avoid problems down the road.
Electing yourself as the registered agent has the following advantages:
But there are some downsides to appointing yourself as the registered agent. These include:
To avoid the many pitfalls, we recommend hiring a registered agent service. They’ll sort your mail and keep your address confidential. Registered agent services cost around $100-$150 per year. Attorneys can charge up to $500 per year to be registered agents.
If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.
What are the Articles of Organization for a Virginia LLC? It’s time to grab a cup of coffee if you’re dozing off. This step is what transforms your business idea into a legal entity.
Without filing the Articles of Organization, your LLC doesn’t exist. But once filed and processed, the entity pops into the world. And you’re much closer to opening the doors to your new business.
Virginia makes the process easy. Some people are under the impression that you need to use an attorney to complete this step. It’s likely more straightforward than you believe.
The applicable law is under section 13.1-1011. It specifies that the Articles of Organization for a Virginia LLC must include:
Virginia has a simple fillable form that helps streamline the process. Be prepared to pay a $100 filing fee and wait two to three business days for processing.
If you need to form your LLC in a rush, you can pay for expedited processing. An extra $100 gets next-day service or $200 for same-day service.
To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.
Does my Virginia LLC need an operating agreement? Virginia does not require LLCs to have operating agreements. But sensible business owners create one regardless to protect their business and interests.
An operating agreement is a private contract between LLC members. It spells out how the LLC functions and handles many situations. Without one, the LLC falls back to state law which might not align with your desires.
To ensure your business operates as you intend, it’s worth executing an operating agreement. It specifies the rights and responsibilities of members and managers. It also lays out ways to add or remove members.
The best operating agreements cover any situation the business might encounter. Owners can customize them according to their wishes and expectations, including:
You can include operating agreements with your Articles of Organization filed with Virginia. But if the time comes when you want to change the agreement, you’ll have to pay the state a fee to do so.
We recommend drafting separate operating agreements to avoid this fee. You do not need to file them with the state as they are private contracts. But having them in writing helps ensure the legal viability.
The best LLC formation services provide operating agreement templates for as little as $50. These take care of most of the heavy lifting and we recommend using them.
Do I need to get an EIN? The Internal Revenue Service uses Employer Identification Numbers (EINs) to track the tax information of businesses for federal tax purposes. They are essentially like Social Security Numbers for businesses.
The IRS requires certain businesses to get an EIN. These include any of the following:
Even if you don’t fall under one of these qualifications, getting an EIN is beneficial for your business. For example, some states require having one for state tax purposes, and banks often require them to open a business bank account for your LLC.
The IRS has made the process easy through its online EIN application. It only takes about five minutes to complete and is entirely free of charge. It’s not worth hiring someone to do this unless it’s part of a wider LLC formation package.
One step you don’t want to neglect is getting the necessary licenses and permits. These can come from state and city-level authorities. Failing to get what your business needs can result in disaster.
Virginia does not offer a general business license. But many regulated business activities require approval.
Review the Department of Professional and Occupational Regulation to see if your business needs a license.
Besides the State’s needs, you’ll also need to follow the local regulations. The City of Chesapeake requires all businesses to purchase a Business License.
Some businesses will have to jump through extra hoops to operate. This applies to specific activities, such as:
The City officials can help you figure out what you need and how the process works. Reach out to the local authority for extra guidance. Ensure you get what your business needs before conducting operations.
To discover the shortcut to success, learn from seasoned business leaders. Experienced entrepreneurs are eager to share advice to catapult your business ahead. The time you invest in connecting with others will pay dividends.
Here is a list of local organizations dedicated to helping businesses thrive:
Once you reach this point, you have formed your LLC and are well on your way to running a successful operation. But don’t run out of steam yet. These next steps are worth taking care of right away.
The internet is a central tool for many modern businesses and customers. Even if you don’t want to launch a website right away, it’s worth getting a domain name (URL) for your business.
If you don’t, other people can snatch the domain name that matches your LLC name. These can be competitors looking to stifle competition. Or domain squatters, who buy the domain names so they can resell them at a markup down the road.
Registering domain names is a quick, affordable and straightforward process. Most domain names cost around $20-$50 per year. Secure the rights to your domain name before someone else does.
It’s not always easy coming up with the perfect LLC name. Another useful tool is a doing-business-as (DBA) name. These are sometimes called fictitious names or trade names.
These allow business owners to operate under something different from the LLC’s name. For example, “Chesapeake Clothing LLC” can use “Chesapeake Skirts and Shirts.”
There is a simple fill-in form you can use to complete this process. A $10 fee applies.
There are a few other steps that your LLC may need to take care of regularly. Some states require annual reports, but Virginia only has a $50 annual registration fee to pay. You can use the online portal to complete this task.
Tax requirements are another concern. Most LLCs receive pass-through taxation. This means the income flows through to the tax returns of the members.
This is also a great time to open a business bank account to keep your finances separate. A qualified CPA can be well worth the cost to navigate the complex tax code and accounting needs.
Now is a great time to consider purchasing insurance coverage. These include general liability, workers’ compensation, and commercial property insurance, plus many others.
Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.
It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.
It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.
The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.
If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.
The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.
It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.
You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.
Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.
No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.