How to form an LLC in Virginia: The Affordable Way

Author: Mathew Abraham

Looking to form an LLC in Virginia? Great! An LLC opens the door for tax savings and provides excellent operational flexibility. However, the procedure for setting up your company in the State may seem daunting and confusing. Don’t worry! We got you.

This article will serve as your go-to guide to understanding each step involved in forming an LLC in Virginia and the essential steps to be kept in mind post the formation process. Let’s not delay further and dive into the steps to form your LLC!

Naming Your LLC in Virginia

Naming your LLC is the first step toward setting up your business in the State. A unique and creative name suitable to the business you are planning to do will go a long way in reaching out to your customer base. It will also help you stand apart from the competition.

While naming your LLC, you must follow all the naming guidelines the State of Virginia has laid down.

Naming Guidelines

The name of your business should have the words “limited liability company” or one of its abbreviations (LLC or L.L.C.). It should also be unique and must not resemble the name of any existing entity that has been permitted to conduct business in the State of Virginia. 

The name you choose should not give the impression that your entity is a government agency. Therefore, you cannot use terms like “F.B.I.” or “Treasury.” 

Similarly, usage of certain words, like “Bank” or “University,” is restricted and involves obtaining the written consent of concerned authorities and additional paperwork and compliance requirements. 

Also, make sure that the name you choose for your LLC does not include any word, abbreviation, or combination of characters that implies that it is a different type of business entity. For example, you cannot use the words “corporation,” “incorporated,” or the designation “Corp.” or “Inc.”

For more information, you can access the Virginia Corporation Commission guidelines.

Does Your Business Require a DBA?

A DBA (doing business as) enables you to operate your LLC under a different name. It is best used for branding purposes. But remember that the DBA name alone does not protect your personal assets. To avail of the protection of limited liability, you need to form an LLC. In Virginia, a DBA name is referred to as an “assumed name” or “fictitious name.”

Over time, you may wish to diversify your business. For example, you may enter new market areas or decide to sell new products. Your name currently for your LLC may not suit this new product or business area. In such cases, it would be better for you to operate under a new name that is more apt for your new product line or business area. Having a DBA name can be helpful in such instances.


Option 1: Apply for a DBA Online

Apply Online – OR –

Option 2: Apply for a DBA by Mail

Download Form

Mail to:
State Corporation Commission
Clerk’s Office
P.O. Box 1197
Richmond, VA 23218-1197

Fee: $10

Doing a Name Search and Name Reservation

Before finalizing a name for your LLC, you must ensure that the name you selected is not similar to an existing business. You can use the State’s Business Entity Name Search to see if the name you want for your LLC is available. You should properly check the name selected for your LLC to avoid rejection later on.

If you are not ready to incorporate your LLC immediately, you can reserve your chosen name. In Virginia, you can apply with the office of the State Corporation Commission for this purpose. Once verified, the name shall be reserved for 120 days with an option to renew the reservation for a further period of 120 days.


Reserve Your Name by Mail

Download Form

Mail to:
State Corporation Commission
Office of the Clerk
P.O. Box 1197
Richmond, Virginia 23218-1197

Fee: $10

Registering your business domain

Your business’s website address needs to match your LLC’s name. The address of your website is how customers find you online. So before you select a name for your LLC, it is recommended that you ensure that the domain name you need is also available. You can check currently available domain names.

Choose a Resident Agent in Virginia

You must select a registered agent before your company can start functioning. A registered agent is an individual or another business entity responsible for receiving all official communication on behalf of the LLC. The registered agent also acts as the point of contact for matters regarding Virginia’s Annual Registration Fee and Certificate of Good Standing.

The registered agent shall also receive any process service concerning a lawsuit against your company. Laws in Virginia mandate that a resident agent be appointed for your business. Without one, you cannot complete the registration process of your LLC.

Who Can Be a Resident Agent?

The State of Virginia provides specific requirements that your registered agent must comply with. The agent you select for your LLC must be:

  • An individual State resident or
  • A business entity that has obtained authorization to conduct business in the State. 
  • above the age of 18 years
  • Have a physical street address in the State.
  • Available during business hours on all working days.  

The registered agent should be available during business hours on all working days. You can appoint yourself or any of your friends or family as the registered agent of your LLC. Alternatively, you can also hire a professional service.

Individual v. Resident Agent Service?

While you can appoint yourself as the registered agent, it may not be advisable for all businesses. It is advisable that you hire a professional registered agent service as it has many advantages.

A professional registered agent service ensures that you don’t fail to duly respond to any notice or other communication that may be sent to your LLC. They remind you when your returns and other filings are due and help ensure you don’t miss any deadlines. The registered agent’s address is available for the public to access on the concerned websites. So if you work out of your home or a private office, having a professional registered agent service will help you maintain privacy.

Professional help lets you focus your energy and time on core business areas. If you are your own agent, you risk receiving sensitive documents like notice of a lawsuit in front of your employees or clients. Having a professional registered agent service helps you handle the situation discreetly. They receive such sensitive documents at their address and deliver them separately.

Filing the Articles of Organization with Virginia

Articles of Organization is a legal document needed to officially form and legally incorporate your LLC. It is to be filed with the office of Virginia’s State Corporation Commission. Once this is completed, your LLC is registered and recognized in the law’s eyes. 

You can complete this procedure by following three simple steps. The first step is for you to acquire a copy of the document. You may create an account on Virginia’s State Corporation Commission online service portal or manually obtain the form.

The next step is for you to fill out the Articles of Organization form. You should duly complete the form by filling out details related to the following:

  • Entity Name
  • Registered Agent Name
  • Registered Office Address
  • Principal Office Address

The final step is for you to file your Articles of Organization with the office of Virginia’s State Corporation Commission. You can do the same online or submit a copy of the duly filled form by mail. Online applications are processed immediately, while submissions through mail take between 2 to 5 business days for processing.


Option 1: File Your Articles of Organization Online

File Online – OR –

Option 2: File Your Articles of Organization by Mail or In-Person

Download Form

Mail to:
State Corporation Commission
Clerk’s Office
P.O. Box 1197
Richmond, VA 23218-1197

Office Address:
State Corporation Commission
Clerk’s Office, First Floor
1300 E. Main St.
Richmond, VA 23219

Fee: $100

Expedited Filing

As of now, the State does not have any provisions pertaining to expedient processing of your Certificate of Organization.

Publish Notice

As of now, the State does not have any provisions pertaining to a mandatory public notice of formation for your LLC. 

Create the Operating Agreement for your Virginia LLC

An operating agreement is a legal document. It lays down the rules of your LLC’s internal operation and functioning. It also provides a framework concerning the duties of members of the LLC and its managers. An operating agreement acts as a guiding force in matters of the day-to-day functioning of the LLC. 

Even though an operating agreement is not mandated by the laws in the State, you should have one. It offers credibility to your enterprise. You will need an operating agreement for opening an account with the bank. More importantly, it  helps protect the LLC’s limited liability status by reinforcing it. Thus, it is recommended that even a single-member LLC have a well-drafted operating agreement.

There are no prescribed templates for an operating agreement in Virginia, and you may draft one according to the needs of your business. However, irrespective of the nature of your business, it shall be advisable for your operating agreement to cover the following matters:

  • Organization Details 
  • Ownership 
  • Duties of Members and Managers
  • Management and Voting 
  • Capital Contributions
  • Division of Profit and Losses
  • Bookkeeping Procedures
  • Procedure for adding new members
  • Requirements concerning Meetings and Procedures thereof
  • Dissolution

Writing The Operating Agreement Yourself vs. Hiring a Service

You can create your operating agreement, or you can purchase templates that you can customize to draft the operating agreement of your LLC. It is, however, recommended that you seek the help of an attorney or a professional in preparing your operating agreement. Experts in the laws of Virginia, these attorneys or professionals will help you draft an operating agreement that suits the needs specific to your business model.

Limits of Operating Agreement

There are certain limitations to creating an operating agreement as per the laws of Virginia. These limitations are mentioned in § 13.1-1093 of the Virginia Code. These have to be kept in mind before forming an operating agreement, as any clause in contradiction to the provisions of the law will make your operating agreement unenforceable. 

Obtaining an EIN for your Virginia LLC

EIN (Employer Identification Number or Federal Identification Numbers or FEINs) is an identification number allotted by the IRS. The IRS uses the EIN to identify an operating business entity for taxation purposes.

It will also be necessary to open a bank account, file tax returns, and hire employees. The IRS issues an EIN, and you can apply for it online or through the mail. 


Option 1: Request an EIN from the IRS

Apply online – OR –

Option 2: Apply for an EIN by Mail or Fax

Download form

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

Pay Annual Registration Fees in Virginia

LLCs registered and allowed to do business in Virginia must pay an Annual Registration Fee of $50. You can make the payment using the online portal of Virginia’s State Corporate Commission. The due date for the payment is by the end of the month in which the LLC was registered in the State.

If you miss the deadline for payment, your LLC will be subject to a penalty of $25. You may also risk getting shut down if the default continues for more than three months from the due date.

Tax Liability for your Virginia LLC

The way your LLC will be taxed depends upon the number of members in your LLC. There are four ways in which LLC will be taxed:

  • Sole proprietorship: a business owned by a single person
  • Partnership: a business owned by multiple people
  • C – Corporation: income is split or segregated for taxation
  • S – Corporation: tax liability is split between the business and its owners

 Federal Tax Liability

You must pay Federal self-employment tax (presently 15.3%) on the profits you take from your LLC. You are eligible for certain deductions in the nature of business expenses. You are also liable to pay Federal Income Tax. The income tax you have to pay will vary depending on your income, filing status, deductions, etc. However, if you treat your LLC as a corporation for tax purposes, federal corporate taxes must be paid.

If you’re a single-member LLC, your default taxation type will be that of a sole proprietor or ‘disregarded entity’. The LLC has to report its activities under Schedule C, Schedule E and/or Schedule F of Form 1040

If your LLC has more than one member, it will be taxed as a ‘partnership’ by default. In this case, apart from filing Form 1040, you’ll have to file your partnership return in Form 1065 and provide information in K-1 of each partner. 

If you would like your LLC to be taxed like a C-Corp or S-Corp, you can do so by filing Form 8832 and Form 2553, respectively.

State Tax Liability

LLCs are, by default, treated as pass-through entities, which means that you do not have to file income tax separately. But, if your LLC is registered as a C-Corp or S-Corp entity, you’ll have to file income tax separately.

If your LLC is engaged in selling certain physical products or specific services, you will be required to pay Sales Tax in Virginia. For this purpose, you must first obtain a seller’s permit from the State. The tax rate will vary according to the product you’re selling.

If your LLC has hired employees, you must sign up for  Unemployment Insurance Tax and Employee Withholding Tax.

Miscellaneous Taxes

According to Virginia’s tax laws, you might be liable to file other additional taxes according to the field of operation of your business. Examples of such taxes are Forest Products Tax, Soft Drink Excise Tax, Soybean Assessment Tax etc. For more details, visit Virginia Government’s website

Permits and Licenses

An LLC operating in Virginia must comply with State and Federal regulations. Accordingly, your business will be subject to three licensing jurisdictions: Federal, State and Local.

Federal Licensing requirements will depend on the business activity carried on by your LLC. If your company is engaged in any area of business regulated by the Federal Government, you will be required to obtain relevant Federal Licenses and Permits.

Some business activities requiring Federal Licenses and Permits are

At the State level, your LLC should get a sales tax certificate if it sells specific physical products or services. You can apply for a seller’s permit online.

Depending on where you operate your business, you may also be required to get the local government’s license and permit. In Richmond, all businesses are required to have a city business license. To know more about local licensing requirements, get in touch with the office of your local administration.

For more information regarding;

Business Bank Account & Phone Number

It is always prudent to open a separate Bank Account for your LLC and have an individual designated phone number. Having a different account helps you to avoid mix-ups and helps ensure that your personal assets are not affected in case of insolvency or lawsuits.

Using your phone number for your LLC can prove to be very inconvenient. Therefore, it is best either get a separate phone number for your business or hire a phone answering service. Doing this would protect your privacy, look professional and reduce the risk of missing important calls.

Final Thoughts

Setting up your business in Virginia has a lot of benefits. Depending on the type of business, LLCs in the State may be eligible for various incentives such as the Virginia Economic Development Incentive Grant (VEDIG), Virginia Investment Partnership Act (VIP) / Major Eligible Employer Grant (MEE), Commonwealth’s Opportunity Fund (COF), etc. Get in touch with your local county or city government office to determine if your LLC is eligible for any of these incentives.

On completing the above steps, your LLC is legally incorporated and ready to do business. We wish you and your new business the very best!

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