Forming a Virginia Limited Liability Company (LLC) in 5 Steps
1. Select a Name for your Limited Liability Company (LLC)
The first thing you need to do to start the process to formally set up a Limited Liability Company (LLC) is to pick a name. The name must be distinguishable from other business entity names, either active (excluding general partnerships), designated, registered, or reserved for use by another business entity in the Virginia State Corporation Commission’s records. The name must contain the words, Limited Liability Company or Limited Company or the letters, LLC, LC, L.L.C. or L.C.
Name Availability – You can run a search on the Virginia State Corporation Commission website, using their business entity search option, to see if their records reflect something similar to the name you would like to use.
Name Reservation – You also have the option of reserving the name you selected if you are not prepared to form your business. To reserve your business name, complete the Application for Reservation or For Renewal of Reservation of a Limited Liability Company Name. The application must be filed with the Virginia State Corporation Commission along with a $10, filing fee. You can reserve a name for a period of 120 days. The reservation can be renewed for additional periods of 120 days, by filing the appropriate form and fee.
2. Prepare and File Articles of Organization With the Virginia State Corporation Commission
Now that you have a name, you need to formally create your business by preparing and filing, Articles of Organization with the Virginia State Corporation Commission. The Articles can be submitted online or by mail. You must select a registered agent to accept legal service of process for the business; and the registered agent selection must be included on your Articles of Organization. The filing fee for an LLC is $100.00.
Registered Agent – Every Virginia and foreign business entity that is authorized to conduct business in Virginia is required to have a registered office and registered agent to accept service of process. The registered agent can be an individual or a business entity.
For an individual to serve as your registered agent he or she must meet the following criteria:
- Be a resident of Virginia;
- Be a member of the Virginia State Bar or is a part of the management of the business entity; and
- The individual must agree to serve as the registered agent.
For a business entity to serve as your registered agent it must be a Virginia business entity or a foreign business entity authorized to conduct business in Virginia and it must agree to serve in that capacity. A business entity may not serve as its own registered agent.
For additional information on registered agents and registered offices, click here.
3. Draft an Operating Agreement
An operating agreement is not required in Virginia, but it is strongly recommended. An operating agreement governs how the business’ day to day operations will be managed as well as the relationship of the members and officers to the LLC. An operating agreement is also used to detail, how to elect and remove officers, how profits and losses will be distributed, how membership interests can be transferred, and how to wind down the affairs of the LLC. This is not an exhaustive list of the things that can and should be addressed in the operating agreement. This office can assist you with making sure you have the right operating agreement for your business, schedule an appointment here.
4. Register with the Appropriate Taxing & Regulatory Authorities
Taxing Authorities – You can apply online with the Internal Revenue Service for a tax identification number (EIN) for your LLC. You must also register with the Virginia Department of Taxation.
Business License and Permits – Depending on the county or city your business is located in and the nature of your business activities, you may have to obtain a business license and permits. You will need to contact the proper authorities in the county or city where you intend to operate your business to verify the requirements.
Professional License – Depending on the type of business or profession you are in, you made need to be licensed through the Virginia Department of Professional and Occupational Regulation or other licensing entity before you can legally commence operations.
5. Annual Registration Fees and Filing
Each year the Virginia State Corporation Commission will send you an information form and notice of assessment for annual registration fees. The fees will be due each year according to the effective date of your registration. The annual fee for an LLC is $50.00. If the fee is not received by the due date a $25.00 penalty will be assessed. “Postmarks are not considered.” Fees may be paid online at https://sccefile.scc.virginia.gov/.
Depending on the nature of your business or profession, you may have additional annual fees with other regulatory agencies. If you are unsure about whether or not you have all of the right licensing and agreements in place, this office is available to assist you!
Practical tips for the day, to help your business be its best!
Here’s to your SUCCESS!