If you're in business or thinking of starting a business in Virginia, you should consider forming a Virginia limited liability entity for your business that will protect you from potential liability as well as provide you with tax benefits that will allow you to keep more of the money you make.
If you're unsure of whether it is worth forming a Virginia corporation or Virginia limited liability company, then read The Top 5 Reasons To Incorporate or Form An LLC.
Already know you want a Virginia LLC? Then click here to get started right now - quickly, easily and securely.
This page will explain the process of forming a Virginia limited liability company, commonly referred to by its abbreviation - LLC. Forming a Virginia LLC is similar to forming a Virginia corporation but has different documentation and filing requirements.
The value of a LLC, like a corporation, is in the limited liability it provides its owners (aka "members"). In order to enjoy that limited liability, though, the LLC must be set up and run properly. Failure to do so can result in an attempt by company creditors to "pierce the veil" and attempt to hold the member's liable for the LLC's debts.
To properly form a Virginia LLC, you should:
1. Pick a name that is available and that does not infringe upon the trademark rights of anyone else. All LLC names must be different than the name of any other corporation or LLC in Virginia and must end in "limited liability company," "limited company," or an abbreviation of these such as "LLC," "LC." While you can search the Virginia State Corporation Commission records for name availability, it is important to know that approval of your name by the State Corporation Commission is not legal trademark clearance of your rights to use that name. A separate search should be done to make sure the proposed name does not infringe on someone else's trademark rights. This can be done at the United States Patent & Trademark Office website. When choosing a corporate name, it's also a good idea to see whether the domain name is available.
2. Prepare and file the articles of organization with the Virginia State Corporation Commission. The articles must contain specific information required by the Virginia Code (see 13.1-1011 of the VA Code) as a bare minimum but should often contain more provisions dealing with indemnity and other issues.
3. Nominate a Virginia registered agent for the LLC. A registered agent is the person designated on the public records as the "go to" person for official communications to the LLC. Typical examples of these "official communications" are letters from the Virginia State Corporation Commission and service of process (lawsuits, employee garnishments, etc.) from the county sheriff and process servers. For more information about Virginia registered agents, and our registered agent services, visit our "Registered Agent" page.
4. Draft an Operating Agreement for the LLC. This is the step most often skipped by do-it-yourselfer's. The Operating Agreement is the contract between the members and the LLC that sets forth the rights and responsibilities of the members. It should cover important issues such as the admission of new members, the process by which a member may leave the LLC, the ownership share of each member and their individual contributions, events of dissolution for the LLC (and the process by which a dissolution takes place), and more.
5. Have an Organizational meeting and prepare meeting minutes. Once you have received the Certificate of Organization back from the Virginia State Corporation Commission, all of the initial members should have an organizational meeting to execute the Operating Agreement and related documents.
6. Obtain an Employer Identification Number ("EIN") from the IRS and decide whether to elect to be taxed as a sole proprietorship (the default form of taxation if there is only one member of the LLC), a partnership (the default form of taxation if there is more than one member of the LLC) or as an "S" Corporation. Yes, an LLC may elect to be taxed as an S Corp. despite the fact that it is not a "corp." Don't let the name fool you.
7. On an ongoing basis, the LLC should be sure to pay its annual assessment (sent out by the State Corporation Commission in July every year) to maintain its good standing.
If you are comfortable doing all of the seven steps above, then you may want to handle the organizational work yourself. However, if you have questions that you may not know the answer to, such as:
What should the Operating Agreement contain and where can I get an Operating Agreement from?
How do I determine the number of units the LLC should have? What are the potential effects of a certain number of units?
How do I elect officers and directors for the LLC? Is there a minimum number of each that I need?
Do all members have to pay cash for their membership units? How do I determine the price for units of the LLC?
What paperwork is needed to prove ownership?
Does my LLC need to issue membership certificates?
Where do I get membership certificates?
Is there any reason for the LLC to hold units back?
How should I sign LLC papers? Is it true that if I sign incorrectly that I can lose my limited liability? (The answer is a most definite "Yes")
Can members demand to see the LLC's financial records? How can they do this and how must the LLC respond?
What is an annual assessment? Who receives the annual assessment and what are the steps taken to timely file it?
then you may want to use our organization services. For a low flat fee of $750.00, which includes the filing fee due to the State Corporation Commission, we will:
Answer all of the ten questions above as well as any other questions you have concerning the formation and operation of your LLC
Help you with selecting a name for your LLC
Prepare the Articles of Organization
File the Articles of Organization with the Virginia State Corporation Commission
Prepare the Operating Agreement for the LLC
Prepare all of the Organizational documents and meeting minutes
Host the Organizational meeting and execution of all documents (assuming you're in Central Virginia and can visit our office, otherwise we'll send you everything with complete and detailed instructions)
Give you a customized LLC minute book containing all of the documents, including the Certificate of Organization and membership unit certificates
Provide you with information on how to immediately obtain your IRS EIN and instructions on how to elect "S" tax treatment.
Serve as the LLC's registered agent for the first year (renewable, if you like, for subsequent years)
This service is available to you regardless of where you are located. We work with entrepreneurs and business owners all over Virginia, across the United States, and internationally. Other attorneys charge $1,000, $1,500, or more for the same service, often prepared by a paralegal or secretary.
If you choose us to form your Virginia LLC, all of your documents will be prepared by a Virginia lawyer. We provide this Virginia LLC formation work for the low price of $750 because we prepare many LLC organizations, are very efficient, and utilize technology effectively to serve you better. If you have any questions about our services, call us at 804-290-7990 or send an email to [email protected].
If you would like to get started right now, you can - quickly, easily, and securely. Visit our new LLC order page and have your new Virginia LLC up and running in no time!
Need a Virginia Registered Agent? Check out our Virginia Registered Agent page.
Call me today at 804-290-7990 for more information.