Follow our free guide to form an LLC in Virginia
- Pros and Cons of Forming an LLC in Virginia
- Starting Your Virginia LLC
- Maintaining Your Virginia LLC
- Additional Virginia Resources
Starting an LLC in Virginia involves several steps, but our comprehensive guide is divided into two main phases to help you understand every part of the Virginia LLC formation journey.
Pros and Cons of Forming an LLC in Virginia
Above Average Income
Virginia ranks #9 in economic opportunities in the recent US News “Best States” report, revealing that the median household income of $68,114 is almost $10,000 above the nation’s average. Additionally, Virginia's poverty rate is three percent lower than the US average.
No Corporate/Franchise Taxes
Virginia does not impose any corporate or franchise tax on LLCs. The only taxes owed on the LLC’s revenue is the personal income tax paid by the members.
Privacy for Owners
Virginia does not require full disclosure of an LLC’s members/managers in the incorporation paperwork. An organizer (neither a member or manager) can file the paperwork for the LLC.
Slow Job Growth
Recent reports have ranked Virginia in the bottom 10 states for job growth as the state is one percent behind the national average — 0.6% and 1.6% respectively. Virginia also shows a slower trend in net migration and expansion of its younger population.
Higher Cost of Living
Virginia’s close proximity to the national capital and the ocean translate to a higher cost of living than other states — particularly with housing, Virginia is 35% above the US average. The average home price in Virginia is well over $250,000 versus the national median price of $215,000.
Cost of Doing Business
- $100 filing fee
- $50 annual registration
- No corporate/franchise tax
Phase One: Starting Your Virginia LLC
The first part of Starting an LLC in Virginia centers around the initial legalities of setting up your business.
Begin the process with these steps:
- Step 1: Name your LLC
- Step 2: Establish Ownership of your LLC
- Step 3: Decide on a Registered Agent
- Step 4: File the Articles of Organization
- Step 5: Create your Operating Agreement
- Step 6: Register for an EIN
Step 1: Name Your Virginia LLC
Your first step is to choose a name for your Virginia LLC. Be aware that there are some specific state and federal regulations and restrictions concerning business names.
Business Name Guidelines
- The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C.
- Your business name cannot be intentionally misleading to consumers
- The name of your new LLC must not be similar to another organization’s name/trademark
- “Lottery” and “Bank” are ineligible for use (any state)
- Terms that represent educational or Veterans’ organizations are restricted
- Terms related to the Armed Forces or civil servants (police, EMT, fire)
LLC business names associated with government and/or financial entities are not always restricted - it depends on the state. Additional paperwork may be required.
Having an online presence for your new LLC is equally important in the current culture. Look into domain name availability at a number of online web services sites.
Step 2: Establish Ownership
The owners of an LLC are instead referred to as members and managers. All LLCs will have members, but not every LLC will have managers — the difference depends on the management structure of the business.
LLC Management Structures:
- Member-managed: All members participate in operating and making decisions for the LLC
- Manager-managed: An appointed manager oversees the daily operations of the LLC and the members are not actively involved.
Virginia LLC Member Guidelines
Required Number of Members
There must be at least one member or manager to form an LLC in Virginia.
Member Disclosure Requirements
An organizer/authorized representative may sign and file the Articles of Organization in place of the LLC members.
LLC members in Virginia may be of any age.
There are no residency restrictions imposed on LLC members in Virginia.
Step 3: Find a Registered Agent in Virginia
The registered agent is necessary for all LLCs formed in Virginia. Your business cannot be official without filling this position.
What is a registered agent?
A registered agent is a person or business who is authorized to accept official mail and legal notices on behalf of the LLC.
Why do you need a registered agent?
Your LLC must have a registered agent so that the state government has a consistent contact person for your business.
What are the main requirements for a registered agent?
- The registered agent must have a physical address — not a P.O. Box
- The registered agent must be available during business hours
Who can be a registered agent in Virginia?
- A state resident with a physical address in Virginia
- An LLC or corporation that is licensed to conduct business in Virginia
Is the registered agent’s contact information publicly accessible?
The name and contact information of the LLC’s registered agent is a matter of public record.
Can I be my own registered agent for my business?
You are legally allowed to be your own registered agent as long as you have a physical address in Virginia.
Is being my own registered agent discouraged?
Business owners who choose to be their own registered agent risk compromising personal information.
Tip: Avoid the hassles and choose Swyft Filings to fill the registered agent needs for small businesses in Virginia. Find more information here.
Step 4: File the Articles of Organization
The most important step in creating your Virginia LLC is filing the Articles of Organization with the Secretary of State.
What is the Articles of Organization?
The Articles of Organization is a legally binding document that is filed with the state government to officially and legally form your LLC.
Why do I need the Articles of Organization?
Your LLC business in Virginia will not be legally recognized by the Secretary of State without filing this document. Consider the Articles of Organization as part of your LLC’s foundation.
What is the cost of filing the Articles of Organization?
The filing fee for Virginia is $100.
What information is included in the Articles of Organization?
- The name and address of the LLC
- The name of the organizer filing the paperwork
- The name and location of the registered agent
Additional Virginia Filing Information — Professional LLCs
Certain professional service businesses in Virginia may form a specific type of LLC known as a Professional Limited Liability Company (PLLC).
Example professions that may form PLLCs:
- Physicians and Medical Professionals
- Professional Counselors and Psychologists
- Architects and Engineers
- Social Workers
A few points to consider:
- All members of the PLLC must be licensed in the profession of the business.
- The PLLC is only allowed to provide services for which the business was formed.
- The members are still subject to whichever licensing boards govern the PLLC’s profession.
Step 5: Create an LLC Operating Agreement
An LLC Operating Agreement is a necessary part of your Virginia LLC’s foundation. This document is vital to the continued success of your LLC.
What is an LLC Operating Agreement?
The LLC Operating Agreement is an in-house legal document that defines the rights of the parties involved in the business and details the operating procedures of the LLC.
Why do I need an LLC Operating Agreement?
The LLC Operating Agreement is necessary because it provides structure for the business, protects business assets, and reduces disputes and lawsuits among members.
Do I need to file the LLC Operating Agreement?
You do not need to file the Operating Agreement with the state; it is for the benefit of your LLC and remains in-house.
What goes into an LLC Operating Agreement?
The LLC Operating Agreement generally must include the following information:
- List of the members/managers and their roles
- Designation of authority in the LLC
- Initial capital contributions of the members
- Voting designations and percentages of the members
- Member transfer/addition rules and restrictions
- Distribution of profits
- Meeting schedule
Tip: Get a customized LLC Operating Agreement for your small business with Swyft Filings. Add structure to your LLC now.
Step 6: Register for an EIN
Most businesses formed in Virginia must have an EIN. Your Virginia LLC will not be able to conduct business without this ID.
What is an EIN?
The EIN is a nine-digit number that is assigned to your business by the Internal Revenue Service (IRS). It uniquely identifies your business with the federal government.
What does EIN stand for?
EIN is an acronym for Employer Identification Number. It is also known as a Federal Tax ID.
Are all businesses required to have an EIN?
Federal law dictates that certain types of business entities register for an EIN:
- Any business with employees (even if owned by one person)
- Any business with more than one member
- A partnership (LLC or C-corp)
Please Note: A sole proprietorship is not required to have an EIN, but it is still recommended.
Why does my LLC business need an EIN?
The more common reasons you would need an EIN are:
- To hire employees
- To open a bank account in the U.S.
- To file your company’s taxes
- To pay independent contractors
In short, if your LLC has employees and makes money, you must have an EIN.
Is the EIN publicly listed?
The EIN for your LLC will be part of public record.
Can I use my Social Security Number as the EIN?
You can use your social security number as your LLC’s EIN; however, this information is part of public record.
Swyft Filings offers EIN services for small businesses in Virginia. Find more information here.
Phase Two: Maintaining Your Virginia LLC
The next phase of starting your Virginia LLC includes steps that are designed to get your LLC ready for business. The next few steps are:
- Step 1: Register for Taxes in Virginia
- Step 2: Apply for Permits and Licenses
- Step 3: File the Annual Registration
- Step 4: Request a Certificate of Good Standing
Step 1: Register for Virginia State Taxes
Virginia does not impose a corporate or franchise tax on LLCs; however, members are still required to pay state and federal income taxes on their earnings.
State Income Taxes
Virginia’s state income tax rates are listed in the table below:
$0 — $2,999
$3,000 — $4,999
$5,000 — $16,999
$17,000 and up
Corporate Tax Information
You can also choose to have your LLC taxed as a corporation; if so, you will be responsible for paying the corporate income tax rate of 6% on your business’s net income.
Additional Tax Information
Other taxes your LLC may need to pay:
- Sales and Use Tax at 6.35%
- Employee Withholding Tax
- Unemployment Tax
Step 2: Obtain Business Licenses and Permits
The licenses and permits required for an LLC in Virginia can vary, depending on a number of variables:
- Location (city and county)
- Type of Business
Tip: If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
Step 3: File an Annual Registration
All businesses formed in Virginia are required to file an annual registration report with the Secretary of State.
What is an annual registration?
Annual registration, also called an annual report, is a legal form that keeps your business’s information current with the Secretary of State.
What kind of information is in the annual registration?
The information requested in the annual registration is similar to what is in the Articles of Organization:
- The name and address of the business
- The name and address of the registered agent
- The names of the members
- The business’s EIN
Is the annual registration part of public record?
The annual registration filed on behalf of your LLC is a matter of public record.
Fees and Due Date
Due Date: anniversary month of LLC formation
Frequency: Every year
Implications of Late Filings: $25 late fee
Swyft Filings helps you stay compliant by providing stress-free solutions. File your annual registration with us today.
Step 4: Request a Certificate of Good Standing
After your Virginia LLC is ready to go, the last step is securing a Certificate of Good Standing for your business.
What is a Certificate of Good Standing?
The Certificate of Good Standing states that your business is properly formed and in compliance with state regulations.
Who issues the Certificate of Good Standing?
The Certificate of Good Standing is generally issued by the Secretary of State.
When can I request a Certificate of Good Standing for my business?
You can get a Certificate of Good Standing from the Secretary of State after your LLC is officially formed.
Why do I need a Certificate of Good Standing?
Your new LLC needs a Certificate of Good Standing to establish a positive reputation with banks, financial institutions, and other businesses. Many companies are leery about working with businesses that do not have this certification.
Additionally, some states require a Certificate of Good Standing before a business can apply for Foreign Qualification.
Does the Certificate of Good Standing have an expiration date?
The Certificate of Good Standing does not expire/does not need to be renewed.
Swyft Filings can create a Certificate of Good Standing for your Virginia LLC. Click here for more information.