How to Start an LLC in West Virginia (Step-by-Step Guide)

When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming an LLC is often the best option for a number of reasons.

An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

Forming an LLC in West Virginia follows a standard process common to those in both states. However, all West Virginia businesses must obtain a business registration certificate from the State Tax Department before doing business in the state.

1. Select a name for your West Virginia LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the State of West Virginia:

1. An LLC’s name must be distinguishable from the names of existing business entities on file with the West Virginia Secretary of State.
2. An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”,  “L.L.C.”, “LC”, or “L.C.” The abbreviations “Co.” and “Ltd.” may be substituted for the words “Company” and “Limited”, respectively.

Need help coming up with a business name? Check out our free business name generator.

Check name availability

Confirm that your LLC name is available in West Virginia by performing a search using the West Virginia Secretary of State Business Organization Search.

Reserve your LLC name with the Secretary of State

Reserving your chosen LLC name prevents another West Virginia business entity from using it before you can legally form your business in the state. File an Application for Name Reservation with the West Virginia Secretary of State by postal mail to reserve your name for 120 days. The filing fee is $15.

2. Designate a registered agent

As in every U.S. state, forming an LLC in West Virginia requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf. The registered agent must either be a state resident or business entity with a street address in West Virginia OR if the individual or business is based out-of-state, they must have a business office in West Virginia.

3. File Articles of Organization

An LLC is created in West Virginia through the filing of Articles of Organization with the West Virginia Secretary of State.

The Articles of Organization must provide the following information:

• LLC’s name, mailing address, email address, and website address
• LLC’s purpose
• Registered agent name and mailing address
• Whether the LLC is a regular or professional LLC
• LLC organizers’ names and addresses
• Whether the LLC is perpetual or will exist for a limited time period
• Whether the LLC is member-managed or manager-managed
• Names and addresses of LLC members or managers
• Whether one or more LLC members will assume liability for LLC debts
• The effective date of the articles
• Whether the LLC is veteran-owned
• Whether the LLC is a scrap metal dealer
• The signature of an LLC organizer

You can file the articles online or by postal mail. The filing fee is $100.

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in West Virginia, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

1. Describe the LLC’s business structure
2. Establish the individual responsibilities and obligations of LLC members
3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File annual reports

All LLCs doing business in West Virginia must file an annual report with the Secretary of State each year and pay a $25 filing fee. This includes foreign LLCs doing business in the state. An LLC’s first annual report is due the year following its formation between the dates of January 1 and July 1, and every subsequent annual report is due during the same interval.

The annual report can be filed online or by postal mail.

Obtain business licenses and permits

In West Virginia, forming an LLC involves two primary registrations and licenses.

• Business license: You must obtain a Business Registration Certificate, also known as a Business License, from the State Tax Department. This certificate enables you to operate your business legally and acquire a Business Tax Identification Number.
• Seller’s Permit: You will also need a seller’s permit, which is done through the same agency and allows you to collect and remit sales tax to the state.
• Occupational licenses: Beyond these universal registrations, additional licenses and permits may be necessary based on your industry and specific business activities. Use the WV One Stop Business Portal to learn about state occupational licenses you may need.
• Local licenses: State agencies and local municipalities may issue additional licensing requirements to ensure compliance with relevant regulations and laws. Consult with a county or city clerk in your area for further information on local licensing requirements.

Understand taxes

The tax obligations of a West Virginia LLC will depend on its tax classification. By default, LLCs are considered pass-through entities, meaning they don’t pay state income tax themselves. Instead, profits or losses pass through to individual members who report them on personal tax returns.

West Virginia tax rates: Members are subject to West Virginia Personal Income Tax on their respective shares of the LLC’s profits, with rates ranging from 3% to 6.5%. Additionally, members must pay the federal self-employment tax, which stands at 15.3% on their portion of the LLC’s net profits.

Tax classifications: Alternatively, LLCs can opt for alternative tax classifications like S corporations or C corporations.

• S corporations, akin to pass-through entities, generally don’t incur state income tax themselves. However, members are liable for taxes on their reasonable salaries and any remaining profits distributed as dividends.
• Conversely, C corporations, distinct from their owners, are subject to West Virginia corporate income tax at a flat rate of 6.5% on taxable income.

Federal taxes: Regardless of the classification, it’s crucial for LLC members to fulfill federal tax obligations. For example, they may need to pay federal income tax on their share of the LLC’s profits, along with other applicable taxes, such as payroll taxes, depending on the business’s structure and operations.

Register with the West Virginia State Tax Department: All LLCs active in West Virginia must register with the West Virginia State Tax Department and obtain a business registration certificate in order to legally operate in the state. You can register with the Tax Department online using the WV One Stop Business Portal or through the mail. There is a $30 registration fee.

Understand BOI reporting

BOI Reporting, or Beneficial Ownership Information Reporting, mandates certain entities, including corporations and LLCs operating in the United States, to disclose key information about their company and beneficial owners.

As of 2024, a law requires all LLCs to report this information to the Financial Crimes Enforcement Network (FinCEN) as part of an effort to reduce financial corruption.

Filing deadlines:

• Existing companies formed before January 1, 2024, must file their initial report by January 1, 2025.
• New companies established on or after January 1, 2024, have 90 calendar days after receiving formation or registration notice to file their initial report.
• After January 1, 2025, there will be 30 days after notice to file the report.
• Any changes to BOI information also need to be reported within 30 days. Reports are submitted electronically via the FinCEN BOI E-Filing website.

Learn more about BOI Reporting.

Post LLC tasks

Set up business bank accounts

Establishing a dedicated business bank account for your LLC is highly recommended, though not legally required.

Benefits of separating your finances: Business bank accounts reinforce limited liability protection and enhance financial management. By keeping personal and business finances separate, you safeguard personal assets from business debts and legal liabilities, maintaining the core benefit of limited liability.

Additionally, a dedicated account streamlines financial tracking, simplifying tasks like bookkeeping and tax filing while enabling effective cash flow monitoring and budgeting.

Banks to consider: Business bank accounts may also offer tailored features such as business debit cards and online banking for small businesses and LLCs. Providers like Found, Relay, and Mercury facilitate efficient business financial management and simplify tax reconciliation processes, as well as offering favorable rates for startups and entrepreneurs.

Obtain a Certificate of Good Standing

In West Virginia, the term “certificate of good standing” can refer to two distinct documents issued by different agencies.

Certificate of Existence: First, the Certificate of Existence attests to the current registration and good standing of a business entity such as an LLC or corporation with their office. It does not, however, indicate financial stability or full compliance with all state obligations such as taxes or licenses.

This certificate is often necessary for purposes such as loan applications, establishing partnerships or contracts, and interactions with government agencies. It can be obtained online or by mail for a $10 fee.

Letter of Good Standing: Alternatively, the Letter of Good Standing, issued by the State Tax Division, verifies a business’s compliance with state laws. Like the Certificate of Existence, it does not imply financial health or adherence to other state regulations beyond tax requirements.

It is commonly needed for obtaining specific licenses or permits, participating in government bidding processes, and demonstrating tax compliance to partners or investors.

Build a website

Even before you have officially started your LLC, you can take the first steps to set up a website. This platform will let potential customers know about you and serve as a way to build your brand early, creating credibility and buzz for your business. And while it may sound intimidating, setting up a website is remarkably simple now.

While every LLC owner knows a website is necessary, you might not know where to start. Follow these steps to get started:

1. Search for and purchase a domain name.
2. Sign up for web hosting.
3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
4. Tailor your site to your customers, adding appropriate pages, content, and images.
5. If you’re selling goods, add an e-commerce section to your site.
6. Review, test, and publish your site.

Costs to set up an LLC in West Virginia

Average cost to set up an LLC in West Virginia: $125-$225

When establishing an LLC in West Virginia, there are several essential costs to consider.

• Incorporation fees: To start, there’s the Articles of Organization Filing Fee payable to the West Virginia Secretary of State, which is $100 for standard filing and incurs additional fees for expedited processing based on the desired speed.
• Annual Report filing fee: Each year, you must file a report with the state. The Annual Report gives you a chance to update your business and contact information that you listed on your formation documents. To file this mandatory report, it costs $25.
• Registered agent service fees: Opting for a Registered Agent Service, though not obligatory, offers a dependable point of contact for legal documents and official notices, with costs typically ranging from $50 to $200 per year, depending on the service provider.

Foreign LLC registration

An LLC formed in a different state than West Virginia intending to do business in the state must register with the West Virginia Secretary of State.

Complete these steps to do business in West Virginia as a foreign LLC:

1. Comply with West Virginia LLC naming rules and confirm that the LLC’s name is available using the West Virginia Secretary of State Business Organization Search.
2. Appoint a West Virginia registered agent.
3. File an Application for a Certificate of Authority of Limited Liability Company with the West Virginia Secretary of State online or by postal mail. The filing fee is $150. The application must include a Certificate of Good Standing or a Certificate of Existence from the LLC’s state of origin and is dated during the current tax year.