Virginia – the mother of all states. Home to the first English colony in the New World, and the birthplace of more U.S. presidents than any other state, the Commonwealth is easily one of the most storied and important states in America. Virginia continues to be one of the nation’s top producers of tobacco – a crop it has grown since the colonial era – and has one of the most diverse economies of any state. Ranching, farming, tourism, high-tech manufacturing, and government agencies contribute to the bustling and thriving Virginian economy. An educated workforce and pro-business government has also placed Virginia at the top of Forbes’ ‘Best States to do Business In’ list for the past four years. Virginia is an obvious choice for any budding entrepreneur. How do you start a business in the state? And what does it take to form an LLC or incorporate in Virginia?
How do you start a business in Virginia?
It’s actually quite easy! All you need is a ‘Doing Business As’ name, the right licenses and permits, and, if you want to hire someone, a federal tax ID number, often called an Employer Identification Number. Virginia has a handy tool to help new business owners register their business and its name online. Once you are all registered, you can technically open for business as a sole-proprietorship. However, while sole-proprietorships are easy to run, they make you, as the business owner, responsible for all of the business’s debts. If you hope to mitigate your risk, you should form an LLC or incorporate in Virginia.
What do you need to do to form an LLC or incorporate in Virginia?
LLCs and corporations are separate legal entities, which means they can hold, and are responsible for, their own debt. To form an LLC, you first have to reserve a name for the new entity that has an LLC designator in it. In other words, you need to choose and reserve a business name that includes ‘Limited Liability Company’, ‘Limited Company’, ‘LLC’, ‘L.L.C.’, ‘LC’, or ‘L.C.’. Once that’s done, you file your Articles of Organization with the Virginia State Corporations Commission. These articles will have to include the names and addresses of the LLC itself, the LLC’s organizers, and the LLC’s registered agent. You then file the form, pay a fee and, if everything is filled out properly, the state government will approve your articles and register the new LLC.
If you want to incorporate in Virginia, you follow a very similar process. Your business’s name has to include a designator like ‘Corporation’, ‘Incorporated’, ‘Corp.’, or ‘Inc.’. You also have to fill out your business’s Articles of Incorporation, which, like an LLC, asks for the names and addresses of the corporation, the corporation’s initial directors, the incorporators, and the corporation’s registered agent. In addition to this information, you will also have to include how many shares the corporation is authorized to issue. Once everything is filed and approved, you will need to hold an initial meeting to elect the board of directors, adopt any bylaws, and issue stock.
Does Virginia offer any incentive packages or tax breaks to small business?
Yes! As mentioned above, Virginia is the top state to do business in, and for good reason. The state can offer financial assistance and link you with small business lenders. Virginia also has loads of business incentives available, along with plenty of tax credits and some of the broadest sales and use tax exemptions in the country. And, if you incorporate in Virginia, you can take advantage of its low 6% corporate tax rate – a rate that hasn’t risen since 1972! Virginia obviously loves small business, so if you live in the state and want to take advantage of its robust economy, you should really think about starting your own business there.
Ready to make the mother of all states the mother of your business? Have questions about how to form an LLC or incorporate in Virginia? Leave a comment below, or give us a call at 1 (877) 692-6772, and we’ll get your LLC or Corporation started!