How to start a Virginia corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your Virginia corporation.

How to start a corporation in Virginia

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your Virginia corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Virginia requirements:

• Your name must include "Corporation," "Incorporated," "Company," "Limited," or an abbreviation of one of these words.
• Don't use a deceptive name, or one that implies a business purpose other than that stated in your Articles or permitted by state law. For example, if you've organized as an electronics store, don't call yourself "Pools Incorporated."
• Make sure your name is unique and not deceptively similar to a name already registered or reserved with the state of Virginia.
• Virginia restricts the use of certain words in business names, including "Bank," "Insurance," and "Redevelopment." These words can only be used by companies specifically organized to conduct such business.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between a Virginia S-Corp and C-Corp tax designation

There are similarities between a Virginia S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, come down to the following:

• Ownership Rules: A C-Corp can have an unlimited number of shareholders and stock classes. An S-Corp may have no more than 100 shareholders and only one stock class. All shareholders in an S-Corp must be United States citizens or legal residents.
• Taxes: A C-Corp is taxed as a separate entity from its owners. It files a corporate tax return and it pays its own taxes on earnings. Individual shareholders may also pay taxes on dividends they receive. An S-Corp is not its own entity for tax purposes. It's a "pass-through" entity. It passes income to its shareholders, who then file and pay taxes on their individual returns.
• Documents: All corporations are C-Corps by default. To become an S-Corp instead, you must file IRS Form 2553, Election by a Small Business Corporation, to elect this tax status.

3. Appoint directors and shareholders for your Virginia corporation

Each state has its own personnel requirements for incorporating. In Virginia, your corporation must have at least one director, although you don't have to choose your board before filing. If your corporation will have an initial board of directors, you must list them in your Articles of Incorporation.

Virginia does not set age limits for corporate directors nor does it require that directors live in the state.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a Virginia address) or choose one to do that service for you (if you are not located in Virginia or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of Virginia

Once you have a business name and registered agent, you can register your business as a Virginia corporation with the state by filing your Articles of Incorporation. This document may be referred to informally as a corporation's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in Virginia must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your Virginia corporation.

What to do after incorporating in Virginia

In order to maintain your corporate status, Virginia requires that you create and keep other corporate documents. These are the two most important ones:

• A corporation's Bylaws formalize its management, structure, and operating procedures. This document must be consistent with your Articles and with Virginia law.
• Corporate Minutes provide a record of all decisions and actions taken during meetings with your directors and shareholders. You must keep copies of your Meeting Minutes for at least three years.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in Virginia means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in Virginia, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, you are required to keep records like bylaws and meeting notes to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state