How to Start an LLC in Virginia: Take These 6 Steps to Launch your Business by Next Week

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Virginia is home to over 780,000 small businesses, which collectively employ 46.6% of the state’s residents.
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Forming a Limited Liability Company (LLC) in the Commonwealth of Virginia can help you protect your personal assets, reduce taxes, and generate wealth for future generations.

Virginia has over 783,997 registered small businesses employing 1.6 million people, according to the U.S. Small Business Administration. An LLC is a business structure that will help you sell services or products in one of the most business-friendly states in the union.

“Forming an LLC in Virginia is very easy if your business is not complicated,” says Andrea Sager, an attorney and the founder of The Legalpreneur, an online platform that provides legal education and advice to small business owners. “During Covid, the processing time was much longer, but things have normalized back to a few days for online filings to two weeks for paper filings.”

If you live in Virginia and have a side hustle, or are thinking of starting a business that will bring in some additional income, it’s essential to set yourself up for success from the beginning. You can form an LLC by yourself, hire a licensed accountant or lawyer, or use a third-party service like LegalZoom to help you get the ball rolling.

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Overview:

LegalZoom helps you set up an LLC in your state quickly, easily, and entirely online. An LLC is needed for important business functions, such as opening a business bank account. Different states have different business formation requirements; LegalZoom customizes the process for you based on what state you live in, and the company helped consumers form 447,000 businesses in 2021, according to a press release.

Mistakes can be made when trying to form an LLC by yourself, and business formation professionals can be expensive. If you want a cost-effective and convenient way to create your LLC (and keep more of the money you make from your side hustle or business when tax time rolls around), LegalZoom is a great option.

We asked lawyers, accountants, and Virginia-based business owners to share their thoughts on the essential things to consider when registering an LLC in the Commonwealth of Virginia. Here’s what they had to say, along with everything you need to know to start an LLC in Virginia for yourself.

Step No. 1: Select a Name for Your LLC and Check if It’s Available

Naming your company is the first step when you want to form an LLC in Virginia. You will have to perform a name availability search in the Clerk’s Information System (CIS) of the Virginia State Corporation Commission (VSCC) to determine if another company is currently using your desired name.

If the name you want is available, but you’re not yet ready to start your business immediately, you can reserve the name for 120 days by applying to secure the business entity name with the VSCC. There is a $10 filing fee for the service, and you can submit the form by mail or online on the VSCC Clerk’s Information System. If you are ready to start your business immediately, you don’t need to reserve a name.

Here are some important items to keep in mind when choosing a business name in Virginia:

  • An LLC registered in Virginia must have “limited liability company,” “limited company,” or the abbreviation “LLC” or “LC” added to the end of the business entity name.
  • An LLC that provides professional services, i.e. law firms and medical practices, must register as a professional limited liability company. These entities can add the words “professional limited liability company,” “professional limited company,” or use the initials “PLLC” or “PLC” at the end of their name.
  • The LLC’s name must be distinguishable from the names of other business entities registered and on file with the VSCC.
  • The LLC name must comply with the Virginia Limited Liability Company Act naming convention.
  • The business name cannot include any words associated with a government agency (e.g., State Department, Treasury, FBI, CIA, DEA, etc.). 
  • Certain restricted words—such as bank, trust, lawyer, attorney, university, or credit union—may require additional documentation and licenses.

It’s important to note that you do not need to use your LLC’s official registered name when conducting business. Virginia state laws allow companies to operate under a fictitious or trade name, commonly designated as “doing business as” (DBA). To use a DBA in Virginia, you must register the fictitious name with the Clerk’s Office

The fictitious name can be filed online or by mail. There is a $10 filing fee for the service. Additionally, it is a good idea to check if your LLC name has its corresponding domain name available for purchase. Owning your company’s domain name makes it easy for customers to find you when they’re searching online for the products and services you offer.

Additionally, ranking high in the search engine results pages (SERP) of Google and Bing for your business name is essential for building your online reputation. Companies with many testimonials and reviews tend to attract more clients and make more sales because the social proof enhances trust, puts potential clients at ease, and inspires confidence.

Step 2: Appoint a Registered Agent

Virginia state laws require all LLCs operating in the state to appoint a registered agent. The registered agent is an individual or company responsible for receiving and handling legal documents, a notice of lawsuits, tax forms, and official government correspondence on the LLCs behalf.

Registered agents in Virginia must comply with the rules and requirements governing the conduct of registered agents and offices as outlined in the Registered Office and Agent section of the Virginia Limited Liability Company Act. 

Here are a few of the requirements:

  • The registered agent must be a resident of Virginia, be available during regular business hours (9 AM to 5 PM), and maintain a physical business address and registered office in Virginia.
  • An individual who is a registered agent in the Commonwealth of Virginia must be a member or manager of the limited liability company. 
  • A third-party business, such as a law firm or service company, may act as a registered agent.
  • The sole duty of the registered agent is to forward to the limited liability company or foreign limited liability company at its last known address any process, notice, or demand that is served on the registered agent.

It is important to note that a company cannot represent itself as its registered agent. Still, a member, director, or manager of the entity can serve as the company’s registered agent, provided the person fulfills the requirements governing registered agents.

Step No. 3: Prepare and File Articles of Organization

To form your Virginia LLC, you’ll need to file a Form LLC-1011 or Articles of Organization with the Virginia State Corporation Commission. The form can be filed online or by mail and has a nonrefundable State Filing Cost of $100 payable to the State Corporate Commission.

You’ll need to include the following information when filing your Articles of Organization:

  • The LLC’s name.
  • The LLC’s contact number and email address (this information is optional).
  • The complete physical address of the LLC’s principal executive office.
  • The name and physical address of the LLC’s designated registered agent.
  • At least one qualification for the registered agent as stipulated in the form.
  • At least one signature of an organizer of the LLC.

“I chose to form an LLC based on the advice of my accountant. I wanted to ensure that my business would be adequately positioned for growth and be fully optimized if I receive a buyout or investment offer in the future,” says Broadus Palmer, founder of  Level Up in Tech, a Virginia-based educational platform that helps individuals transition into the cloud technology industry. 

LLCs formed in another state are considered foreign LLCs. If they want to operate in Virginia, these foreign LLCs must complete and submit a Certificate of Registration or Form LLC-1052 to the Virginia State Corporation Commission. There is a $100 filing fee charged for the service. Additionally, foreign LLCs must include a certified copy of the articles of organization from their state of origin.

Step No. 4: Create an Operating Agreement

The Commonwealth of Virginia does not require LLCs to have an operating agreement. However, having one is a good idea because operating agreements are important internal documents that outline how the LLC will function and conduct business daily.

One of the main benefits of having a functional operating agreement is that it outlines the responsibilities of each member of the LLC. Therefore, if conflicts arise that lead to litigation, the operating agreement can help a judge or arbitrator determine which party is at fault. In addition, a smooth litigation process means lower legal costs and less time away from revenue-generating activities.

Step No. 5: Obtain an Employer Identification Number (EIN)

Once your Virginia LLC has been filed and approved, you can register for a nine-digit federal Employer Identification Number (EIN) with the internal revenue service (IRS). An EIN is a tax identification number that acts as a social security number for a business. It is unique to that specific entity and can be used to file federal taxes, open business bank accounts, manage payroll, and apply for business debit and credit cards. An EIN is especially important if you decide to hire employees in the future.

Step 6: Maintain Your Annual Registration

LLCs operating in Virginia must pay an annual registration fee to keep their registration active. The yearly registration fee is $50, due on or before the last day of the month the LLC was registered. The Virginia State Corporation Commission will mail the assessment notice to the LLC’s registered agent at the registered office address two months before the due date. The fee can be paid online, in person, or by mail to the VSCC.

Potential Additional Step: Obtain a Business License

By following the steps listed above, you can easily register your Virginia LLC and get approved and active within a few weeks. Though not a requirement for all LLCs in Virginia, certain companies may be required to obtain local and state business licenses to operate their business. You can get information about state business licenses by visiting the Commonwealth of Virginia’s website. For local licenses, you need to contact the county clerk in the city where your LLC will operate and determine if there are licenses and permits required to run your business.

“The low cost of filing, ease of reserving a business name, and absence of business licensing requirements were the key features that attracted me to file my LLC in Virginia,” says Mick McKeown, founder of Pennovia, a consulting firm that helps small and medium-sized businesses win government contracts.

How Much Does it Cost to Start an LLC in Virginia?

There are several fees associated with forming an LLC in Virginia, but not all of them will apply to you. Here’s a list of some of the essential fees to remember:

  • $100 filing fee to form your LLC and get your articles of organization.
  • $10 filing fee to reserve your preferred name for 120 days (optional).
  • $100 filing fee for LLCs formed in other states to operate in Virginia.
  • $10 filing fee to use a “doing business as” or fictitious name.
  • $50 annual registration fee to keep your LLC in active status.
  • $25 late fee if you do not renew your yearly registration on or before the due date.
  • $50 to $100 to expedite your filing for the next business day.
  • $200 to expedite your filing for the same day.

You can file your LLC for as little as $100, plus $50 a year for annual registration.

Is it Worth Starting an LLC in Virginia?

If you want to limit your liability and reduce your tax obligation, it’s essential to have your business correctly organized as a separate and distinct entity. Even if you have a small side hustle, like driving for Uber part-time, or you sell handmade goods on sites like Etsy, being a sole proprietor can leave you wide open for a lawsuit if you get one very disgruntled customer. 

“If you work in an industry prone to lawsuits, it’s worth the couple hundred dollars to form an LLC to shield you and your family from possible litigation,” says Anthony Price, founder of Priceless CPA, a company that helps business owners with accounting and tax strategy. 

Price shares that when it comes to taxes, an LLC can provide certain tax benefits because of its flexibility. A business owner can elect to be taxed as an S corporation, a C corporation, a partnership, or a sole proprietor. These elections have different tax ramifications once a business hits a certain income threshold.

Related: LLC vs. S Corp: How to Ensure You Don’t Overpay on Taxes

How Long Does it Take to Form an LLC in Virginia?

The processing time for forming an LLC in Virginia varies depending on how you interact with the VSCC. You can complete the LLC filing process in minutes using the online portal. After that, you’ll have to wait for 2 to 3 business days for the state to approve it. 

If you don’t want to wait, you can expedite your online filing. Next-day filing will cost between $50 and $100. For example, if you submit your file by 2:00 PM EST, you can receive a filing response by 4:00 PM EST the following business day. If you want same-day service, it will cost you $200. You must submit your file by 10:00 AM EST to receive a filing response by 4:00 PM EST the same business day. If you mail your application, the processing time will be 2 to 3 weeks. This is because the VSCC does not expedite paper submissions.

Starting an LLC in Virginia isn’t intimidating compared to other states. The state is pro-business and offers numerous resources to help new entrepreneurs get up and running in record time. Use this guide as a roadmap to help you create a business that will help you achieve financial independence and leave a lasting legacy.