How to Start an LLC in Virginia
The state’s online application system can help you start a Virginia LLC in a few hours.
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From picking a name to filing your articles of organization, you can start a limited liability company in Virginia in a matter of hours. Here’s how to get your LLC off the ground, plus other tips for starting a business.
1. Decide if an LLC is right for your new business
Entrepreneurs in Virginia can choose from several business entity types, including LLC, corporation, partnership and sole proprietorship. Weigh the pros and cons of forming an LLC before starting your business.
Pros
Owners in an LLC aren’t personally liable for business debts and business lawsuits.
LLCs have fewer compliance requirements than corporations.
LLCs can choose whether to be taxed as a pass-through entity or corporation.
No annual report is required for Virginia LLCs.
Virginia charges a low annual registration fee ($50) for LLCs.
Virginia charges low filing fees and name reservation fees for LLCs.
Cons
Virginia has strict rules compared with other states about who can serve as a registered agent for a business.
All LLC earnings are subject to self-employment taxes, whereas corporate shareholders only pay Social Security and Medicare taxes on salary.
An LLC can’t issue stock, making it difficult to raise money from investors.
If you’re looking for the easiest and least expensive business structures, you might consider a sole proprietorship or general partnership instead of an LLC. These options, however, will not provide liability protection.
On the other hand, if raising money from investors is part of your financial strategy, an S-corporation or C-corporation could make sense so you can provide equity to investors. A business lawyer can always help you further compare business entities and choose the best option for your company.
2. Choose a name for your Virginia LLC
Once you’ve decided an LLC is the best fit for your business, pull together a shortlist of names for your company. Then, use the Virginia State Corporation Commission name search website to confirm your business name is available. The SCC is the branch of the state government responsible for LLCs, among other business entities.
You name needs to be unique — you can’t select the name “Mister Donut, LLC” if there’s already a “Mr. Donut, LLC” or “Mr. Donut, Inc.” that’s registered to operate in Virginia, for instance — and it needs to meet the state’s LLC naming requirements.
Virginia LLC name requirements
Virginia LLC names can use approved punctuation and special characters. Allowed characters include: periods, commas, dashes, parentheses, colons, semi-colons, apostrophes, question marks, exclamation points, plus signs, minus signs and equals signs. The following characters are also allowed: @, #, $, %, &, *.
Virginia LLCs must adhere to other naming requirements, too. The name of your LLC must include one of the following:
- Limited Liability Company.
- Limited Company.
- L.L.C.
- LLC.
- L.C.
- LC.
Businesses that provide professional services, such as doctors’ offices and law firms, must form a professional limited liability company. These businesses can choose to substitute one of the above endings with P.L.L.C., PLLC, P.L.C. or PLC, but they don’t have to.
Beyond that, you can’t use words like “bank,” “trust,” “engineer,” or “architecture,” for example, unless your business is actually engaged in those activities. And you can’t include abbreviations referencing other types of business entities, such as “Inc.” for a corporation.
Once you’ve selected an available name, you can reserve it for 120 days online via the Virginia SCC Clerk’s Information System or by mail using Form SCC631. Name reservations can be extended as needed while you complete the other steps in the LLC formation process. There’s a $10 filing fee to reserve or renew your reservation.
🤓 Nerdy Tip
Reserving your LLC business name prevents other companies from claiming it while you fully set up your business. But reserving a name isn’t the same as registering under it — and doesn’t guarantee that a name will comply with state or federal trademark laws. Therefore, it’s up to you and your business attorney to understand the naming requirements for LLCs in Virginia and choose an appropriate business name before you officially form your LLC. 3. Set up a DBA, if applicable
Virginia LLCs can operate under a DBA, or “doing business as” — a fictitious name that’s different from your business’s legal name. You will need to register the fictitious name with the Virginia SCC’s Clerk’s Office and pay a $10 fee (this fee is different from the fee to reserve your LLC’s official name).
If your LLC uses a name other than what is registered with the state, and you fail to file a fictitious name form, you could face fines or jail time.
Note: While your LLC must register using a name that follows Virginia's naming requirements (noted above), your DBA or fictitious name does not have to be unique or meet those same requirements.
4. Appoint a registered agent
All Virginia LLCs must designate a registered agent, which is an individual or company that receives legal documents and official mail on your business’s behalf.
In Virginia, only the following individuals can serve as the registered agent for a business entity:
- The business owner.
- Any owners, officers or other members of the business entity’s management.
- A member of the Virginia State Bar.
- A third-party company that offers registered agent services.
All registered agents must also be Virginia residents, have a physical business address in the Commonwealth (a P.O. Box will not suffice) and be available during normal business hours.
» MORE: Business insurance for LLCs
5. File your LLC paperwork with the Virginia SCC
In Virginia, you can file your LLC articles of organization online via the Virginia SCC Clerk’s website or mail them Form LLC-1011. Filing online is generally much faster — your filing can be processed as soon as the same day. There is a $100 filing fee no matter how you file.
The articles of organization form for Virginia LLCs includes the following:
- LLC name and physical address.
- Name, physical address and qualifications of the registered agent.
- Name and signature of the organizer who is filling out the form.
If your LLC was originally organized and registered in another state or country (referred to as a “foreign” LLC), file form LLC-1052 instead to operate in Virginia. The filing fee for this application is $100. Along with your filing fee, you’ll need to include a certified copy of the LLC’s home state articles of organization.
After the state has approved your articles of organization, your LLC will be established in Virginia. But you’ll still want to complete some additional steps before actually starting your business.
6. Get a Virginia business license
Businesses in Virginia typically need a local business license, which is issued by the city or county where your business is located. Use the Commissioners of the Revenue of Virginia Association's website to see what’s required and how to file based on where your business operates.
Certain LLCs — real estate and insurance agents, engineers and home inspectors, for example — have additional licensing and permitting requirements. Visit the Virginia Department of Professional and Occupational Regulation website to see what is required for your industry.
7. Draft an LLC operating agreement
Virginia LLCs aren’t legally required to have an LLC operating agreement, but this document can prove essential as it outlines how the LLC will be run on a day-to-day basis, as well as each owner’s contributions to the company and profit share. You can do this before or after filing your articles of organization.
Your LLC operating agreement should include:
- The LLC’s products or services.
- Each owner’s name and address.
- The manager’s name and address if the LLC is manager-managed.
- Each owner’s financial contributions to the LLC.
- Each owner’s stake in the company, profit share and voting rights.
- Procedures for admitting new business partners.
- Procedures for electing a manager if the LLC is manager-managed.
- How to handle ownership transfers when an owner departs the business.
- Meeting schedule.
- Procedures for dissolving the company.
A lawyer or online legal service can help you create a custom LLC operating agreement. Because an LLC operating agreement is not required in Virginia, you will not have to submit this document to the state.
8. Determine how your LLC will pay taxes
LLCs are considered pass-through entities for income tax purposes. This means that the LLC itself is not responsible for paying taxes. The business profits and losses pass through to each owner’s personal tax return. Each owner then pays federal and state taxes on their share of the profits.
An LLC can elect to be taxed as a C-corporation or S-corporation by filing the appropriate paperwork with the IRS. An LLC that elects to be taxed as a C-corporation will pay Virginia corporate tax and federal corporate tax.
🤓 Nerdy Tip
If your LLC sells taxable goods or services, you must register with the Virginia Department of Taxation (DOT) in order to collect sales tax from customers. You’re required to report the sales tax to the state on a monthly or quarterly basis, depending on your sales volume. » MORE: How do LLCs pay taxes?
9. Meet Virginia LLC employer requirements
If your Virginia LLC has employees, you’ll have a few additional obligations to meet:
- Report employees: You’ll need to report all new employees to the Virginia New Hire Reporting Center within 20 days of hiring or rehiring, whether the employee is full time, part time or seasonal. This is mandatory under federal and state law.
- Pay employer taxes: As an employer, you’ll have to withhold payroll taxes from your employees and file payroll tax returns along with your other LLC taxes.
- Purchase workers' compensation insurance: When you’re forming an LLC in Virginia, you’ll need to purchase workers' compensation insurance if you employ three or more employees. That includes full time, part time, seasonal and temporary employees.
- Pay unemployment taxes: You must pay state unemployment taxes if your payroll is more than $1,500 in a quarter or if you employ workers for more than 20 weeks in a given calendar year. You also have to file quarterly tax reports. The Virginia Employment Commission is in charge of collecting unemployment taxes.
10. Keep your fees up to date
LLCs in Virginia must pay an annual state registration fee of $50, which is due each year on the last day of the month in which your LLC was formed. The Virginia SCC will mail a notice regarding this fee to your registered agent at their registered office address.
You can pay your annual fee online or by mail. Failing to pay your annual fee on time will result in a $25 penalty.
A version of this article was first published on Fundera, a subsidiary of NerdWallet.
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