How to Start a Business in Virginia and Form an LLC

Virginia Business Facts and Environment

VA Business Facts

Virginia was named for Elizabeth I, England’s “Virgin Queen.” Its nickname is the Mother of States. It’s also known as The Old Dominion and the Mother of Presidents. All three nicknames are linked to Virginia’s position as one of the oldest settlements in the US, and one of the first states to join the US.

Virginia, oddly enough, is the birthplace of both college fraternities and streaking. The first-ever recorded person to streak across a campus was George William Crump, in 1804.

According to estimates, anywhere from 50 to 70 percent of all Internet traffic flows through data centers situated in Northern Virginia. These facilities occupy millions of square feet in the upper area of the state.

Tobacco is Virginia’s major cash crop, and many of the people who live here earn their living from the tobacco industry.

Top industries in Virginia include architectural and engineering services, banking and lending, computer programming and systems design, food products and shipbuilding. Several major military centers call Virginia home, and over 20 different bases are peppered throughout the state.

Major Companies in Virginia

It’s no surprise that the US Army is the largest business in Virginia. Other corporate heavy hitters are Dollar Tree, Hilton Worldwide Holdings, DXC Technology, Northrop Grumman, Bechtel and Capital One.

Virginia Startup Environment

There are lots of incentives for both startups and existing businesses in Virginia With a state corporate income tax rate among the lowest in the nation at 6%, Virginia’s business-friendly policies are attractive for startups. Business incubators are gaining traction across the state, and local universities have recently seen increased enrollment in entrepreneurship classes. Further, Virginia’s economy is evolving from an agricultural core to a technological and manufacturing one – an excellent atmosphere for founders with innovative ideas. Arlington is also a hub for cutting-edge startups.

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Picking a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that, the better).

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing, and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if you’re name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use google at a fairly advanced level you can reasonably clear a name yourself. 
  
  TIP: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
  
  
• Make sure your company name choice is available by searching the Virginia Business Entity Database and doing a name search on the State of Virginia website. Note: Make sure to search variations of spelling, plurals, and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).

Ready to start a business in Virginia?

Our Virginia filing services will help you get started as quickly as possible.

Step 3: Register the Business

Each state has it’s own requirements for registering a business. Now that you’ve chosen a business structure and picked your business name, here are the requirements to register your business in Virginia.

How to form an LLC in Virginia

• Hire a professional Registered Agent.
• File the “Articles of Organization” with the Virginia State Corporation Commission. These may be filed online at the Virginia New Entity Formation website, or by mail. In both cases, the filing fee is $100.
• Optional: Elect S-Corporation status with the IRS by filing IRS Form 2553. Yes, even an LLC can choose to be taxed as an S-Corporation (or even a C-Corporation).
  
  TIP: Speak to your tax advisor about this important issue because it adds complexity to your LLC most people would rather avoid.
  
  
• Hold an Organizational Meeting to take contributions from the members, issue Member Certificates, adopt the company Operating Agreement, and more. (yes, even for 1 person LLCs).

How to Incorporate in Virginia

• File the “Articles of Incorporation” with the Virginia State Corporation Commission. These may be filed online at the Virginia New Entity Formation website, or by mail. In both cases, the filing fee is $100.
• Hire a professional Registered Agent.
• Optional: Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
• Hold an Organizational Meeting to properly organize the corporation, take contributions from the shareholders, elect directors and officers, issue stock, adopts the Corporate Bylaws, and more.

Considerations when Incorporating or forming an LLC in Virginia

• A Registered Agent is required for every Virginia Corporation and LLC. The chosen registered agent must have a physical street address in Virginia. A professional Registered Agent who will provide their address and forward any important documents to you. This is convenient if you have to move, since you won’t have to file forms or pay fees, (just update your address with your agent).

How to File a DBA in Virginia

In Virginia, it is a crime to operate with a fictitious business name without filing for a DBA. This could result in a penalty of up to $2,500, up to one year in prison, or both.

• Check your business name through the Commonwealth of Virginia State Corporation Commission Entity Search.
• If you are a corporation, LLC, or LLP, you must obtain an Assumed/Fictitious Name Filing in a Virginia Circuit Court, and then file a certificate with the Clerk’s Office of the Commission.
• Obtain the forms from the county to register your DBA. More information can be found here.
• File the forms with the County. You will need to submit a completed form and the required filing fee to the local circuit court clerk’s office. Some counties may require the form to be notarized and published.

Ready to register a business in Virginia?

Our formation package includes everything you need to get started

• Preparing and submitting Articles of Organization to the state of Virginia.
• All the necessary post-formation documents completed and personalized to you “ready for signature.”
• Our exclusive Startup Wizard – which guides you through the complete startup process from formation to bank accounts, logos and more.

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about our business formation service
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLCs and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if you we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork b) your EIN c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

Click here to view a list of our recommended banks in our Vendor Network.

Top Business Banks in Virginia

• Branch Banking and Trust Company
• Carter Bank & Trust
• First Citizens Bank & Trust
• SunTrust Bank
• TowneBank
• Wells Fargo

TIP: Our business formation service includes a free banking resolution for your use.

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Review our list of Accountants, Accounting Software and Bookkeepers in our Vendor Network.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Review our list of recommended Payroll Providers in our Vendor Network.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.

Click here to view our list of insurance providers in our Vendor Network.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

DBA: There are no additional requirements for DBAs in Virginia.

LLC: Virginia LLCs are required to file an annual report on or before the last day of their anniversary month. The filing fee is $52.

Corporation: Virginia corporations are required to file an annual report on or before the last day of the anniversary month of incorporation. The filing fee is $100.

Corporations are also required to keep the following items within their corporate records at their principal place of business:

• Articles of incorporation and amendments
• Bylaws and amendments
• Minutes from shareholder and director meetings
• A record of all actions taken by shareholders and/or on the behalf of the corporation.
• Written communications to shareholders over a three-year period
• An alphabetical list of all shareholder names, including names and addresses, number and class of shares held by each.
• The corporation’s most recent annual report.
• Resolutions adopted by directors related to classes or series of shares and their rights, preferences, and limitations.

Franchise Taxes: A franchise tax is imposed on the net capital of all banks and trust companies. Other businesses do not need to pay a franchise tax.

Click here to view our MyCompanyWorks Premium™ service which can automate most or your ongoing compliance tasks.

Ready to start a business in Virginia?

Our Virginia filing services will help you get started as quickly as possible.

Important Virginia Contacts

Virginia Secretary of the Commonwealth

P.O. Box 1475
Richmond, VA 23218
804-786-2441

Virginia State Corporation Commission

Virginia Taxation & Labor Departments

• Virginia Department of Revenue
• Virginia Department of Labor and Industry

Virginia State Startup Resources

• Virginia Economic Development Partnership (VEDP)
• Yes Richmond
• University of Virginia Entrepreneurship Portal
• Northern Virginia Technology Council
• Virginia Highlands Small Business Incubator
• Hampton Roads Small Business Web Portal
• Virginia Business Incubation Association

1. Virginia Small Business Administration

Small Business Administration (SBA) Virginia State District Office

• US Small Business Administration

2. SCORE Mentors

SCORE Virginia

SCORE is an excellent hub of active and retired business people who volunteer to support startup businesses. Connecting with a local SCORE mentor can help to avoid pitfalls that are common among startup businesses.

• Virginia Business Portal
• Virginia Small Business Development Center
• Virginia Job Link Employer Portal
• Tax Information For Virginia Businesses

3. Virginia State Legal Statutes:

• Virginia Business Corporation Act
• Virginia State Limited Liability Companies – the specific act that applies to Virginia State LLCs.
• Virginia State Businesses and Professions – includes regulations on topics such as business and professions codes.

4. Virginia State Chambers of Commerce

5. Virginia Angel Investors

• List of Angel Investors in Virginia

6. Virginia Business News

• Virginia Business
• Inside Business – The Hampton Roads Business Journal
• Richmond Times-Dispatch

7. Virginia State Small Business Development Center

• Virginia Small Business Development Center

8. Virginia Green Initiative

Register as a “Green” business and connect with other local businesses.