Virginia has recently ranked the top place to do business in the U.S. so it is no wonder it is an extremely popular place to live, secure a meaningful job, or run a business!
If you want to start your own company, registering a business in the state is a relatively straightforward process due to the state’s efficient and consistent support for new businesses and the overall business community.
There are many different development centers in Virginia with the sole focus of helping entrepreneurs and those with existing small businesses develop and maintain their position within their community, throughout the state, nationally, and at an international level!
Virginia’s support for small businesses is evident in its approach to encouraging new businesses to register within the state and it offers access to several different business development plans tailored to your business’s needs and ambitions.
With competitive corporate tax rates, proximity to large and booming markets, affordable homes, and even commercial space, low Virginia State Corporation Commission registration fees, and efficient filling times, it comes as little surprise why so many people decide to register a business in Virginia and start their journey to entrepreneurial success.
Not only is Virginia pro-business, but it also boasts some great attractions, beautiful landscapes, and natural beauties such as Crabtree Falls.
How to Register a Business Name in Virginia – 7 Easy Steps
The Virginia Corporations Commission makes it reasonably easy to register your business name. There are three ways you can do this:
- 1. Do it yourself directly on their website.
- 2. Pay a document filing company that can register everything online for you – there is a modest fee for this but it saves a lot of time and ensures it is done correctly.
- 3. Hire an attorney or accountant to file and register your new company – there are higher fees associated with this.
Step 1 – Determine your registered name
Firstly, you must determine that your business name is unique and not being used by someone else. A business registration company can do this research on your behalf or alternatively, you can search directly on the Virginia Corporations Commission website.
Once you have established your name is available you can register a business name in Virginia directly on their website if you are comfortable with the process. Or, if you want a company to do this for you that specializes in this, you can use an online registration service to do it.
These document filing companies usually offer a free registered agent service for one year with most of their packages which is often a necessity for new businesses and those being registered by foreigners with no U.S. address.
Before doing any of this, you must decide on the right structure.
Step 2 – Choose the right entity
You need to choose the right type of business to register and the most common options are a limited liability company (LLC) or an incorporated company (Inc.). If you are keeping things really small and simple (one or two people), then you may consider a sole proprietorship or a general partnership.
Even if you plan to be a solopreneur, it is usually more beneficial for you to register a Virginia LLC to make sure, as the owner, you have limited liability under this structure, and so you can benefit from the pass-through tax advantages.
Here is a quick rundown of the various options and what they might mean to you:
- Limited Liability Company: A Virginia LLC is often the best route for most entrepreneurs because the structure comes with personal asset protection, no double taxation, is fairly easy to maintain, and does not have high registration or annual renewal costs. Through LLC formation you have better tax flexibility and income can be taxed as a pass-through entity like a sole proprietor or partnership, or as a corporation.
- Incorporated Company: A Virginia Corporation offers personal asset protection and your company can own property, vehicles, incur liabilities, and is responsible for its own debts and can conduct business without the owners risking their personal assets such as their homes, cars, personal savings, retirement, etc. On the flip side, owners of sole proprietorships or partnerships face unlimited liability for both business and personal assets.
Step 3 – Make sure your name is not being used by another company
This may seem obvious, but if you check the Virginia Corporations Commission website and see that your chosen business name is available, that is all well and good, but that doesn’t mean someone else is not using that same or similar name, particularly in another state.
Many people register an “official business entity name” and trade under a different name. This is called a Virginia dba, or “doing business as” name or assumed trading name, and needs a separate DBA certificate.
You will want to do a Google search for your official name and your desired trading name (if different) to make sure no one else is using this name. Most importantly, you will want to make sure you can get an easy-to-remember website domain name that is not being used by someone else.
Having an awesome name or trading name for your business can be crucial to your success, so making sure the domain name is available too, and registering it right away, is equally as important.
Finally, if you go to the Virginia Corporations Commission website and discover that someone else has registered the name you would like, you can search for variations of that name by adding a word before it or after it, or using some other variations until you find a name that is available and acceptable for you.
Step 4 – Request an Employer Identification Number (EIN)
Once you have registered your new business in Virginia you will need to get an EIN for a number of reasons. These include paying taxes for your business, opening a bank account, obtaining credit cards or lines of credit, establishing terms with vendors and suppliers, hiring employees, and more.
There are only a few instances where you likely won’t need an EIN. More often than not, many business activities are just not possible without having an EIN.
An EIN is the business equivalent of a social security number and is used to track your business dealings. Even if you do not intend to hire employees, you will almost certainly still need an EIN for your Virginia company and it protects you from having to use your social security number.
For more information on how to get an EIN number in Virginia use our guide where you will find downloadable forms and links to the online process.
An EIN (also known as a federal tax id) is free to obtain from the IRS, and you can apply online but if you are not comfortable filling in forms you can use a third-party document filing service to do this for you for a small fee. This ensures you are 100% compliant with the law and they handle everything with the IRS.
Step 5 – Obtain the Required Business Licenses and Permits
To operate your business in Virginia you must comply with federal, state, and local government regulations. Virginia law does not require a small business owner to have a “general” license to operate.
You will, however, need specific permits for specific businesses. For example, if you open a restaurant or similar food-related business you will most likely need a health permit, sales tax permit, facilities permit, and others. If you plan to sell alcohol, you will need a liquor license, essentially it all depends on the type of products and services your business is going to offer.
The business licenses you will need to acquire in order to register a business in Virginia will also differ depending on the location of the business too.
You must find out how to obtain the necessary Virginia business licenses and permits, this link will allow you to personally search for your type of business in order to familiarize yourself with the permits and licenses your business may require to operate in Virginia. You can also access the relevant forms you will need to complete.
Alternatively, you could hire a professional document filing company to do this for you. It eliminates a lot of time and hassle and ensures you are correctly complying with Virginia law. After all, Virginia has no single generic business license that will ensure compliance with all requirements.
Step 6 – Determine Your Business Employer Requirements
There are several things you need to check regarding your responsibilities as an employer in Virginia because there are requirements you must meet at the federal and state level. These could include various workforce commissions, safety, and state tax obligations, as well as labor law requirements including the minimum wage in Virginia and employee rights and remedies under the Virginia minimum wage act.
To learn more about Virginia employer resources take a look at the Virginia Employment Commission website.
Step 7 – Open a Business Bank Account for your Virginia Company
As a new business owner, you should seriously consider separating your personal and business bank accounts to make it easier to track and account for your income and expenses. For certain business types, such as an LLC or a Corporation, it is essential that you open a separate business bank account to maintain your liability protection.
Once you have your EIN and your company registration documents, coupled with your driver’s license, you are ready to go to the bank and open your checking account.
Don’t worry, this won’t be expensive or leave you burdened with hefty monthly fees to pay – there are many free business bank accounts out there for you to choose from. Each has its different features and benefits, so you can decide what bank and checking account best suits your needs.
Summarizing Registering a Business in Virginia
Virginia has one of the best business ecosystems in the country making it one of the most progressive in the nation, tailored for businesses large or small. With an increased focus on aiding and boosting small businesses over the past several years, Virginia is becoming an even more attractive proposition to register a business in. With a multitude of brilliant and free resources at your disposal, this is a win-win for entrepreneurs.
Small Businesses are thriving in Virginia because of its relatively low state tax burden (6% is the flat corporate income tax rate), an ever-growing and extremely stable economy, readily available corporate and office space for businesses to thrive, an affordable cost of living, a highly skilled workforce (47% college-educated), a very high median income when compared with most other states, and its proximity to large markets.
The state fee for registering a business in Virginia is $100 for an LLC and $100 for a corporation. The annual filing fee to maintain your LLC in Virginia is $50, and for a corporation, it is $25.
The Mother of States is committed to your success and has many resources at your disposal that you can take advantage of.