How to start a Virginia LLC

An LLC is a type of business that helps protect its owners (called members). This means that if the business owes money or gets sued, the members’ personal assets, like their house or car, are usually safe. 

Virginia defines an LLC as “an entity that is an unincorporated organization organized and existing under [Chapter 12], or that has become a domestic limited liability company of the Commonwealth pursuant to § 13.1-1010.3 as it existed prior to its repeal.” That means an LLC in Virginia is a company created within the state or a company that becomes subject to Virginia state regulations surrounding LLCs (Chapter 12).

If that sounds like a lot of legal jargon – that’s because it is! What you need to know is that LLCs are popular with business owners because they are simple and flexible to run. They have fewer rules compared to comportations and the owners can choose if they want to manage the business themselves or appoint managers to do it. 

Another benefit is how taxes work: LLC owners can pay taxes through their own personal tax returns, or they can choose to have the business pay taxes separately, like a corporation. This gives owners more choices in how they handle taxes as their business grows.

Why should I register for an LLC in Virginia?

You may want to register for an LLC in Virginia when:

• You own or want to start a business in Virginia, or want to expand an existing business into Virginia, and want to stay legally compliant. 
• You own or want to start a business, and want more flexibility on how you will manage the business or pay taxes than a corporation would provide.
• You want to protect your personal assets from potential liability resulting from business you conduct in the state of Virginia. 
• You own or want to start a business, and want to register in Virginia to open accounts, lease or buy property, secure funding, or hire employees.

Do I need to file my LLC in Virginia if I live in another state?

Any LLC that does business in Virginia must register with the State of Virginia. LLCs based in Virginia are called "domestic LLCs," and out-of-state LLCs are called "foreign LLCs." If your LLC was organized and operates outside of Virginia, establishing a foreign LLC within Virginia will allow for you to conduct business there.

Foreign LLCs and domestic LLCs may have different filing and compliance requirements -- Rocket Lawyer can help you navigate foreign LLC registration, regardless of where you live.

How to start an LLC in Virginia

1. Find a unique name for your Virginia LLC

The state of Virginia requires that the names of all LLCs in the state:

• Shall contain the words "limited company" or "limited liability company" or their abbreviations "L.C.," "LC," "L.L.C.," or "LLC."
• Shall not contain any word, abbreviation, or combination of characters that states or implies the limited liability company is a corporation, a limited partnership, a registered limited liability partnership, or a protected series of a series limited liability company; or any word or phrase the use of which is prohibited by law for such company.
• Are not too similar to existing LLCs in the state. You can search the state of Virginia's database of business entities in the state to ensure your business' name is unique.

Rocket Lawyer can help you determine whether your business' name is eligible for registration in Virginia and may be able to help you reserve the name before you file your LLC.

2. Include your other LLC members (if any)

In Virginia, you can in fact form as a one-person LLC. In this case, the LLC would be referred to as a single-member LLC (SMLLC), whereas if there is more than one owner, the LLC may be called a multi-member LLC. 

The main difference between single-member and multi-member LLCs lies in ownership structure and management. With a single-member LLC, you have full control over the business. In contrast, a multi-member LLC has multiple owners, each with a specific percentage of ownership as defined in the operating agreement. This means that in a multi-member LLC, owners share profits, losses, and tax responsibilities based on their ownership percentage.

3. Provide a Virginia address

This will be used as your official LLC address. The address that you list may either be your home, an office, or another physical location, but it cannot be a PO box.

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. Register your LLC with the state of Virginia

Once you have a business name and registered agent, you can register your business as an Virginia LLC with the state of Virginia by filing your Articles of Organization. This document may be referred to informally as an LLC'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)

Virginia LLCs are required to have a Federal EIN tax number. Think of your tax ID as the social security number for your company. It will be important for business contracts, tax filings, and all manner of documents down the line. Every company should have one to remain in good standing.

7. Pay the state filing fee

Every state has different fees for forming an LLC, which can also vary from one year to another.

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

What to do after forming a Virginia LLC

There are a few steps you need to take to maintain your Virginia LLC:

1. Create an Operating Agreement: we can help you create your Virginia LLC Operating Agreement online.
2. Hold a meeting: a first meeting with members of an LLC is not required by law, but it is highly suggested in order to get organized. Also, unlike corporations, LLCs are also not required to maintain Meeting Minutes, but these documents are also recommended as they provide records for important decisions made.
3. Pay taxes according to how you chose to be taxed: traditionally, LLCs are "pass-through entities." This means that you pay your business taxes on your personal tax form. That said, you can elect to be taxed like a corporation, if you choose to do so.
4. Submit an Annual Registration Fee: this is required every year for all LLCs registered in the state and it is due by the last day of the anniversary month of your LLC's organization..

What is needed to keep records for my Virginia LLC

The State of Virginia requires every LLC to keep the following records in their principal office:

• A current list of the full names and last known addresses of each member in alphabetical order.
• A copy of the articles of organization and all amendments executed.
• Copies of the company's federal, state and local income tax returns for the last three years.
• Copies of the company's financial statements for the last three years.
• Copies of any effective written Operating Agreement.
• Unless specified in the Operating Agreement, you'll need keep a written statement containing the following:
  • The amount of cash and a description and statement of the agreed property or services each member has contributed or has agreed to contribute.
  • The circumstances under which members will make future contributions.
  • A member's right to receive, or the company's right to make, distributions to a member, including a return of the full or part of the member's contribution.
  • The circumstances under which the LLC would be dissolved.

Still have questions? Rocket Lawyer can help you with the process of forming a Virginia LLC. Get started today!

  

Key takeaways Registering an LLC in Virginia can give you a lot more flexibility than a corporation, as well as protection for your personal assets from potential liabilities. Even if you live in another state, you must register your LLC in Virginia if you do regular business there, like selling things or having employees. After starting your LLC, it’s advisable to create an Operating Agreement and hold a first meeting. You’ll also need to submit an Annual Registration Fee every year.  Keep records of your Virginia LLC, like the names of all members, tax documents, and your business rules. These help you stay organized and follow the law.

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 an LLC
• How are LLCs taxed
• How to start an LLC
• Do I Need a Registered Agent?
• How and when to file an Annual Report