Launching a business is a big deal. For entrepreneurs looking to start a business in Virginia, kudos. The journey ahead will be both exciting and challenging.
Out of the gate, owners need to learn how to set up an LLC in the state. The process is fairly easy, but the owner needs to work through several steps, which includes selecting a registered agent. A registered agent is a person or company that will accept official documents on behalf of your company. These documents are usually confidential notices that are delivered in-person or via registered mail.
In addition to filing paperwork and selecting a registered agent, business owners must create an operating agreement, obtain an identification number, and be prepared to pay annual registration fees.
To help soon-to-be business owners like yourself, we’ve created a guide that explores how to set up an LLC in the State of Virginia.
How is an LLC formed in Virginia?
When an entrepreneur is ready to form an LLC in the State of Virginia, there are certain steps to take. Ultimately, documents that form a company in Virginia, called Articles of Organization, need to be filed. However, there are certain things that business owners must do before and after filing these documents. The steps are:
1. Name the company
Before filing any paperwork, your company needs a name. Maybe you already have a name in mind or maybe you’re planning a brainstorming session to come up with ideas. Either way, it’s important to know that the state has a few rules when it comes to naming your company.
To start, the company name can’t already be in use. Every business name in Virginia must be unique. If the name is in use, you’ll have to come up with a new name. To check availability, go to the Virginia State Corporation Commission website and conduct a business search.
A name’s availability is just part of the naming process. There are additional naming rules that you must follow. Additional rules are:
- The company name must include the words “Limited Liability Company” or “LLC” in the title.
- Names that the public can confuse with government agencies aren’t allowed.
- Certain names may require additional approval by state officials. If this happens, a state employee will contact you directly.
Now is also a good time to check on the availability of a domain that matches the company name. Most businesses want their website URL to match the company name, but if that domain isn’t available it’s best to know before settling on a name.
2. Pick a registered agent
After deciding on a company name, it’s time to make another decision. Who will be the company’s registered agent? A registered agent is a person or company that accepts documents for your company. These documents are likely sensitive in nature and maybe things like tax notices, government correspondence, or service of process documents that are served during a lawsuit.
Given the importance of this job, choose an agent wisely.
3. File the Articles of Organization
Every state has documentation that entrepreneurs use to legally start a business. In Virginia, these documents are called Articles of Organization. With the company name and registered agent selected, filling out these documents will only take a few minutes.
The Articles of Organization will ask for the company name and address, the registered agent’s name and address, the company start date, and the type of company. The LLC organizer must sign the document before submitting it.
The Articles of Organization can be filed online or by mail. There is a fee to file. The fee is $100.
It will take the state 2-3 business days to approve the documents if it’s delivered electronically. It will take 5-7 days to approve if it’s mailed in. Once approved, you’re officially a business owner in Virginia.
4. Create a company operating agreement
After filing the Articles of Organization, you should create an operating agreement. An operating agreement is a contract that explains everyone’s roles, and most importantly, explains how profits and losses are handled.
There are dozens of templates online that can help DIY business owners create this document. A lawyer can also help you draft one.
The State of Virginia doesn’t require a copy of the operating agreement, but it’s not something you should skip. In the future, if there are any disputes over the decision-making process or how money should be doled out, it will all be clearly explained in the operating agreement.
5. Obtain an EIN
With the paperwork out of the way, business owners like to get down to business. However, there’s an additional item on the to-do list that must get done. The IRS requires businesses to have a nine-digital ID number, which is known as an employer identification number or an EIN.
To get an EIN, visit the IRS website. After answering a few questions, the number will be issued at the end of the session.
6. Pay a yearly registration fee
The Virginia Corporations Commission sends a reminder to every LLC to pay its annual registration fee. The fee is $50. Most states require LLCs to file an annual report, but Virginia doesn’t. It just requires the registration fee.
What is a Virginia registered agent?
A Virginia registered agent is a person or company that receives documents on behalf of your business. The documents are usually sensitive in nature and may include tax notices or lawsuit documents.
The business owner selects a registered agent, which must be listed on the company’s LLC formation paperwork. If the registered agent changes, an updated form must be filed with the state.
Do I really need a registered agent in Virginia?
Yes. The State of Virginia requires every LLC to continually maintain a registered agent on file.
Can I be my own registered agent in Virginia?
Yes. A company owner can serve as his or her company’s registered agent, and many do. The job is fairly simple. You have to be at a certain address regularly, that’s about it. For an owner who works in the office, it’s a fairly simple gig. However, there are certain instances where an owner prefers to appoint another person or hire a registered agent service.
Who can be a registered agent in Virginia?
A Virginia registered agent can be the owner, but it can also be a friend, coworker, or neighbor. A registered agent can also be a registered agent service. A registered agent service is a professional company that serves as your company’s registered agent for an annual fee.
The State of Virginia has a few other rules about naming a registered agent, which include:
- The person must have a physical street address, not a P.O. box
- The company must be in good standing with the state and have a physical street address, not a P.O. box
- The person or company must be available during regular business hours
Why would a company choose to work with a registered agent service?
There are many reasons that people decide to hire a registered agent service. Here are a few reasons why:
- Convenience. For some business owners, it’s just easier to hire a registered agent. Some entrepreneurs simply can’t work out of one location and be “on-call” to accept documents. For that reason, business owners put a registered agent service in charge.
- Peace of mind. A registered agent service gives many owners peace of mind. The owner can work outside the office, travel, and take care of day-to-day tasks all while knowing that a registered agent service is ready and willing to accept documents.
- Privacy. As mentioned, many of the documents received by a registered agent are confidential. Due to the nature of these documents, some owners prefer to have them sent offsite to preserve privacy.
List of Virginia registered agent services
There are a number of registered agent services in the state to choose from. While a quick Google search can provide a great list of possible options, here are a few to browse through to see what’s out there:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in Virginia?
Like many business owners, you might be concerned about costs. Fortunately, the cost of a registered agent is fairly affordable. The cost can be as low as $50 a year. For that amount, you’ll likely find a company that accepts documents on the company’s behalf, notifies you of delivery, and forwards the original documents in the mail.
There are registered agent services that are more expensive and hover around $200 a year. These companies offer more features though. They’ll help you file reports with the state government, for example.
How does an owner select a registered agent in Virginia?
A registered agent is selected by listing the person’s name or the company’s name on the Articles of Organization. After that, if the registered agent changes, there’s a special form to fill out to update the agent on file.
Can a company change its registered agent?
Yes. To make a change, the business owner must submit a change form to the Virginia State Corporate Commission. Unlike other states, Virginia does not charge a fee to file this document.
What’s a statutory agent?
Statutory agent is another term for a registered agent. The name varies by state. Some states also use resident agent or service of process agent, since the agent is responsible for accepting documents served during a lawsuit.
What’s a commercial registered agent?
If you hire a registered agent service, the company has a commercial registered agent. If the owner or another person holds the position, the company has a non-commercial registered agent. Some states ask an owner which kind of registered agent they’ve elected.