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Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
Becoming a small business owner is one of the most fulfilling choices you can make, and the state of Virginia has everything a new entrepreneur needs to succeed. Ready to become your own boss? We created a step-by-step guide to help you successfully start a business in Virginia, from developing a solid business idea to incorporation.
Start Operating in Virginia: Key Points
Virginia offers many opportunities to entrepreneurs, with small businesses making up 97.7% of all companies in the state.[1]
You can operate your Virginia business as a sole proprietorship, a limited liability company, a corporation, or a nonprofit.
You must file your business formation paperwork with the State Corporation Commission, apply for business licenses, and open a business bank account.
Easily start your business and remain compliant with our all-in-one tools, guiding you well past the initial setup with the right support and documents.
Ready to Start a Virginia Business?
Becoming a small business owner in Virginia doesn’t have to be complicated. You can complete the incorporation process and start operating in Virginia quickly with the proper knowledge.
However, it’s essential to take the time to research all the necessary steps you need to take instead of jumping in blindly. The good news is that you don’t have to do it alone. We created a step-by-step guide to setting up a business in Virginia so that you can have all the information in one place.
1. Choose a Business Idea
A bright business idea is the cornerstone of every new business. You may already know what you want to do with your Virginia business, so you can move on to the next step. However, for many entrepreneurs, developing a solid business idea takes a fair amount of time. The possibilities are endless, so committing to a single idea can be difficult.
If you’re still working on your business idea, here are some of our favorite tips for choosing one:
Start a business that relates to your interests. Your small business should excite you, and the best way to ensure that is to do something you’re interested in. Whether it’s something you studied in college or a hobby, brainstorm how to turn your passion into a profitable small business.
Decide to make an impact. A small business can have a significant effect on its local community. Think about the issues that you’d like to solve and become that solution. For example, starting a green small business can help you positively impact the environment.
Reflect and meditate. Sometimes the best business idea is already in your head; you just need to find it. Meditation, journaling, and changing scenery can all help you do it. Check out these thirteen places for entrepreneurs to find inspiration.
Developing a great business idea can take time, but the freedom of being your own boss is well worth it. Don’t be afraid to have big dreams. Every successful business, from Apple to Uber, was initially just an idea.
→ Thinking about starting a business in Virginia right after college? Here are the best small business ideas for recent college grads.
2. Draft a Virginia Business Plan
Every new business needs a solid plan to transform a business idea into a successful startup. A business plan is an extensive document that details essential business fundamentals, such as your mission statement and target market analysis.
Your business plan should include the following sections:
Executive summary: your mission statement and a summary of the most critical aspects of your business plan.
Audience, market, and competitor analysis: research your target audience, industry outlook and trends, and main competitors to understand how to position your business.
Products and services: an overview of the main features and benefits of the products and services you will sell.
Financial plan: revenue and expenses projections as well as any other relevant financial information about your business, such as where your funding will come from.
Marketing and sales plan: an overview of how you will market your business and your sales process.
Operations and organization: a breakdown of how your business will operate and its organizational structure.
It’s essential to draft a business plan before you move further into the business formation process or file any paperwork. Creating a business plan will give you the necessary insight into the decisions you’ll need to make for successful incorporation, such as what business structure to choose. Without a business plan, you’d be guessing.
There’s no set business plan format that every entrepreneur must follow. However, if you’d like some guidance, you can find downloadable business plan templates on the Small Business Administration’s website, sba.gov.
3. Select a Business Name
Your business name is one of the most critical pieces of your brand identity, so it should be simple, unique, and easy to remember. Choosing the right name for your business can feel overwhelming, so here are some tips to help you brainstorm.
Play around with words. You can combine two words to create an original business name. For example, a popular salad chain Sweetgreen combines the words “sweet” and “green.” This name also speaks to the brand’s mission to build a healthier food system.
Take inspiration from art or literature. Many successful businesses are named after fictional characters or concepts. For example, Nike is named after a Greek goddess of victory.
Don’t try to make your business name do too much. Your business name is just one piece of your business identity. It won’t express your entire business idea or philosophy, so don’t put too much pressure on it. When in doubt, a simple name is better than an overly complicated one.
Once you develop a business name, you must ensure it’s available. The Virginia State Corporation Commission requires your business name to differ from other registered business names. You can do a Virginia business search on the SCC’s website or use Swyft Filings’ Free Business Name Search tool.
Suppose you’re not ready to start a business in Virginia yet but want to reserve your desired business name for the future. In that case, a name reservation is available for a small fee.
4. Choose a Business Structure
When choosing a business structure for your new business, you have options. A sole proprietorship, a limited liability company, a corporation, or a nonprofit are popular types of business entities. Your business structure determines how your business will be taxed, so research which option aligns best with your goals for your startup.
Sole Proprietorship
A sole proprietorship is the default type of business structure. It’s the easiest way to start a Virginia business because it doesn’t require incorporation. You’re automatically considered a sole proprietor if you don’t have a registered company but conduct business activities. As a sole proprietor, you must report your business revenue on your personal income tax return.
Sole proprietorships “do not produce a separate business identity.”[2] This means that your business assets and liabilities are the same as your personal ones. If your business has debts or liabilities, your creditors may come after your personal property, such as your house or car.
Additionally, it’s harder for sole proprietors to obtain business funding and open a business bank account. If you want to open a business bank account, you’ll most likely need to apply for a DBA, also known as doing business as, a trade, or an assumed name.
Corporation
A corporation provides excellent personal liability protection but can be challenging to manage. You must practice extensive record-keeping and follow strict operating procedures to stay compliant.
A corporation may also be subject to double taxation when your corporate profits are taxed on the corporate level and as a part of your personal tax return. However, some small businesses can qualify for an S corporation tax status to avoid double taxation.
It’s easier for corporations to raise capital and get sold. It can be an excellent choice for your small business if you want to go down this path eventually.
Limited Liability Company (LLC)
Many small business owners decide to form an LLC because it provides them with strong personal liability protection but is easier to manage than a corporation. A limited liability company is a hybrid between a sole proprietorship and a corporation, making it an attractive option for entrepreneurs.
In contrast with a corporation, LLC owners can report their business profits and losses on their personal tax returns, which helps them avoid double taxation. However, it may be harder to sell an LLC or transfer ownership.
Nonprofit
Forming a nonprofit organization may be your best option if your business is advancing a social cause without expecting a profit. Donations instead of investments fund a nonprofit. One of its main advantages is that it may qualify for tax-exempt status.
Each business structure has its pros and cons, and there’s no universal “best” business structure for small business owners. It’s essential to spend time figuring out which business structure aligns with your future vision.
5. File Business Formation Documents
Filing business formation documents establishes your small business with the Commonwealth of Virginia. What kind of business formation documents you need to file depends on your chosen business structure. All business formation documents should be filed with the Virginia State Corporation Commission. You’ll need to cover a filing fee.
Virginia LLC Formation Documents
To form a limited liability company in Virginia, you have to file articles of organization with the Virginia State Corporation Commission. This document is also sometimes called a certificate of formation.
It would be best if you also considered creating an LLC operating agreement. It’s a written document that outlines your LLC’s rules and standard operating procedures. It’s essential for effective dispute resolution. All LLC members must agree to follow the operating agreement.[3]
Swyft Filings can help you form a Virginia LLC online and in minutes. Answer a few questions about your business, and we’ll file your business formation paperwork with the Virginia State Corporation Commission.
Virginia Corporation Formation Documents
To register a corporation in Virginia, file articles of incorporation with the Virginia State Corporation Commission. You may see this document referred to as a certificate of incorporation.
You’re also legally required to draft corporate bylaws for your Virginia corporation, but you don’t have to file them with the State Corporation Commission. The bylaws establish lawfully binding rules and procedures for your corporation.[4]
Forming a Virginia corporation can quickly become complicated, but you don’t have to do it alone. Swyft Filings can help you file your business formation documents accurately and swiftly.
Virginia Registered Agent
Suppose you’re forming an LLC or a corporation. In that case, you must have a Virginia registered agent receive legal documents and mail on behalf of your business. You can serve as your own registered agent or hire a registered agent service to protect your privacy and stay compliant.
6. Apply for Virginia Business Licenses and Permits
Your small business may require a business license or a permit to start operating in Virginia. Licensing requirements exist at federal, state, and local levels. It’s essential to research what licensing obligations your business has at each level.
Federal Licenses
Some industries, such as alcoholic beverages, are regulated by the federal government. You must apply for a federal business license if you conduct business activities in one of these industries. You can check if you need a federal permit on the Small Business Administration website. Applying for a federal license doesn’t satisfy state or local requirements.
State Licenses
The state of Virginia doesn’t require all businesses to obtain a general business license, but the Virginia Department of Professional and Occupational Regulation regulates more than 30 occupations and professions, from real estate brokers to plumbers. If your industry is regulated by the DPOR, you’ll need a Virginia business license.
Local Licenses
Your city or county may have additional business license requirements for your startup. You may need to obtain a general or industry-specific license to carry out your business activities.
For example, Richmond requires all businesses to apply for a general business license and renew it every year.[5] Home-based businesses may need a zoning permit.
It’s crucial to obtain appropriate business licenses as soon as possible after incorporation. Starting to operate without a permit can result in steep fines or even having to dissolve your business.
Figuring out what kind of business licenses you need to get for your business can be confusing, but Swyft Filings is here to help. We’ll research your business's federal, state, and local requirements and file your license applications with the appropriate authorities.
7. File and Report Business Taxes
As a business owner, you must regularly file federal and state tax returns. The IRS collects the federal tax, and the Virginia Department of Taxation regulates Virginia taxes. You may also have to pay local business taxes. Virginia doesn’t have a franchise tax, but there is a sales tax.
Tracking tax deadlines and filing your tax paperwork on time is important. Failure to meet deadlines or delays can result in severe penalties and negative consequences for your small business.
8. Open a Business Bank Account
A dedicated business bank account is essential to ensure personal liability protection. Most banks will require an employer identification number (EIN) to open a business bank account. It’s a tax ID number that functions like a social security number but for your business. It’s also sometimes called a federal employer identification number.
Business owners can obtain an EIN on the IRS website. To save time and avoid headache, you can use Swyft Filings instead.
Take Your First Steps Toward Small Business Ownership
With an entrepreneurial spirit and a high quality of life, Virginia is one of the best states for small businesses and startups. To bring your business idea to life and start operating in Virginia, you must go through a multi-step business formation process. You must file the necessary paperwork, obtain business licenses, and open a business bank account.
Every business needs support at the beginning. This is why Swyft Filings helps you handle your formation paperwork and gives you time to focus on getting your business off the ground. Start your LLC, corporation, or nonprofit today.
Your Perfect Fit: Whether you're looking at a simple LLC or a dedicated nonprofit, we'll help you identify the best structure for your dream business.
Continued Support: Your entrepreneurial journey doesn’t stop at formation. Our key management services help ensure your business thrives.
Tailored Affordability: Get value-packed options suited to your business needs, starting at just $0 + state fees.
Frequently Asked Questions
Is Virginia a good place to start a business?
Virginia is consistently ranked as one of the best places to start a small business. It offers support, comprehensive business resources for entrepreneurs, and a relatively low corporate tax.
How much does it cost to start operating in Virginia?
Startup costs depend on various factors. Your chosen business structure, what kind of equipment and supplies you’ll need, and whether you’ll hire employees all influence how much it will cost to start operating in Virginia.
Can I start a business in Virginia without a business plan?
It’s highly recommended that you draft a detailed business plan before you go through the business formation process. It will help you make better decisions and increase your chances of starting a successful business.
What does Virginia require to start a business?
The business formation requirements depend on your chosen business structure. For example, becoming a sole proprietor doesn’t require paperwork (unless you want to file for a DBA). Still, you’ll need to file articles of incorporation and draft corporate bylaws if you're going to start a Virginia corporation.
What is the process for starting a business in Virginia?
Once you solidify your business plan, you must file business formation paperwork with the Virginia Secretary of State. To start operating, you must apply for business licenses and open a business bank account.
Why are most LLCs in Delaware?
Delaware has multiple pro-business policies, making it a great place to start an LLC. Read this article to learn more about creating an LLC in Delaware.
Bibliography
U.S. Small Business Administration. “Virginia Small Business Profile.” Accessed July 15, 2023.
U.S. Small Business Administration. “Choose a business structure.” Accessed July 15, 2023.
Virginia’s Legislative Information System. “§ 13.1-1023. Operating agreement.” Accessed July 15, 2023.
Virginia’s Legislative Information System. “Article 3. Formation of Corporations.” Accessed July 15, 2023.
City of Richmond, Virginia. “Finance Services.” Accessed July 10, 2023.
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