If you're thinking of starting a business in Virginia, you'll need to file some paperwork with the Virginia State Corporation Commission (SCC). This article will give you an overview of the process and tell you how much it will cost to begin a Virginia LLC business entity.
How Much Does an LLC Cost in Virginia?
The cost to start an LLC in Virginia depends on the amount of paperwork you need to file. Here are the expected things that you will need to pay to form an LLC in Virginia.
Virginia LLC Fees
The most significant expense of establishing a Virginia LLC is the $100 filing fee to file your LLC's Articles of Organization with the Virginia State Corporation Commission.
Filing legal documents online with the Virginia SCC is $50 while filing by mail costs $75 also paid to the Virginia State Corporation Commission.
Registered Agent Fee
Another required expense when starting an LLC is finding a registered agent. Appointing a registered agent is critical to the success of your LLC formation.
The duty of your registered agent is to handle sensitive legal and tax paperwork, as well as keep your company in line with Virginia business laws. In a nutshell, you'll want someone you can trust.
While you may be the official agent for your own Virginia Limited Liability Company, this puts pressure on you to keep up with business filings and possible legal issues. It's sometimes better to delegate responsibility to a registered agent.
A registered agent service in Virginia keeps track of your annual reports and other paperwork so you don't have to worry about late filings or the burden of having to do it yourself.
Although there are many service providers, not all of them provide the same quality of services. As a result, you must exercise caution while selecting one. Northwest Registered Agent is the best option according to our research, but if you'd want to examine other options, check out our list of the finest registered agent services.
Most registered agent services charge $125-$175 per year to act as your registered agent in Virginia. There is a choice for you to be your own registered agent, but it is preferred that you seek professional service provided by a Virginia registered agent service.
By completing the formation process yourself, creating your own operating agreement, being your own registered agent, and obtaining your own Employer Identification Number (EIN) to open your business bank account, you may save money on establishing an LLC.
Articles of Organization Fee
The key, most essential (and costly) form that you'll file to start your Virginia LLC is the Articles of Organization. The Articles of Organization formally establish your company with the state, so get it filed as soon as possible! It costs $100 to submit either online or by mail, but you won't have to file it again after your Articles of Organization are accepted.
The official business name of your LLC, the registered agent's name, an indication that your registered agent is a person or a business, the registered office address, the LLC's primary business address, and the date are all required information to file your Articles of Organization.
Business Permits and Licenses
You may need to obtain other business permits and licenses in order to lawfully operate your LLC. The SCC offers a Business Permits and Licenses Tool that can help you identify what you may need.
Before doing business in a state, certain LLCs must be licensed. It all depends on the company's sort and location. Plumbing and electricians must get a license from the Virginia Board of Contractors, whereas cosmetologists must join the Board for Barbers and Cosmetology.
Your LLC may or may not need licenses depending on your state and/or local government, which could add to the complexity of this process.
Furthermore, in some states, your city and/or county may have its own licensing regulations, so your LLC could require many licenses or none at all.
Check with the Department of Professional and Occupational Regulation as well as your locality's business licensing office to learn more.
What are some of the most commonly required business licenses for Virginia LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law.
On the municipal level, things like alarm permits, building permits, and zoning permits are all very common.
The average cost of a business license in Virginia is $100, but some can be more expensive or less depending on the industry and municipality.
Other LLC Filing Costs
There are other costs associated with starting an LLC in Virginia, but they're not as common or as expensive.
LLC Name Reservation Fee
The filing of corporate papers is not required by the state, although it is recommended. So, if you're ready to start your business, skip this step and go right to the Articles of Organization, which will immediately register your name for you.
However, if you plan on delaying starting your company for a while and want to secure your intended name, you can reserve it for a mere $5.
To make things clearer, most jurisdictions do not require name reservations and are rarely necessary. If you're worried that someone else will register the name you want, you could decide to create your LLC instead of reserving it.
Business Domain Name & Website
You'll need to get the domain name so that no one else can use it to brand your business correctly. For just $4.99, search for and select the ideal one from GoDaddy.
Foreign Qualification Fee
If your LLC is based in another state and plans to expand into Virginia, this only applies if it was formed there. A Foreign LLC does not file the Articles of Organization. Instead, they must submit an "Application for Certificate of Registration."
A Foreign LLC in Virginia must qualify according to the regulations, or they risk facing stiff penalties. By filling out an Application for Certificate of Registration and sending it to the State Corporation Commission, you can avoid them. The $100 filing fee is required, but you only need to submit it once for a Foreign LLC.
LLC Annual Fees
One-time startup fees were all that was discussed thus far. Virginia LLCs, however, must pay yearly maintenance fees as well, the most expensive of which is the annual report and registration fee.
This $50 charge is due on the last day of your company's anniversary month via the SCC eFile portal or by requesting a paper form.
The official business name of your LLC, your State Corporation Commission ID number, the jurisdiction where you originally formed your LLC, the name and address of your registered agent, the LLC's principal office address, and the names and addresses of your LLC members and/or managers are all required to file an annual report.
Taxes payable to the Virginia Department of Taxation
The Department of Taxation administers and collects state taxes, which are different depending on the type of business. You can find a variety of tax guides and resources on their website to help you get started.
Some examples of taxable business activities include:
State Income Tax
As the LLC's owner, you must pay State Income tax on all profits generated by the business. These earnings will be taxed through your personal tax return. In Virginia, the typical income tax rate is between 3 and 5.75 percent. At filing time, you may claim all of your normal reimbursements and deductions.
State Sales Tax
If your LLC is a seller of goods, selling tangible goods & a service provider providing services, it has to collect sales & use taxes & then pay them to the Virginia Department of Revenue. The sales tax varies in different regions, counties, & cities. The current state sales & use tax rate on LLCs in Virginia is 4.3% of the purchase price.
Federal Self-Employment Tax
The self-employment tax in the Commonwealth of Virginia is a flat rate of 15.3 percent, which is paid by all LLC Business members or managers. This sort of tax applies to any money you take out of your company. The self-employment tax rate in Virginia is 15.3 percent.
Federal Income Tax
Federal taxes are charged on taxable income and is based on your earnings, the tax bracket in which your LLC operates, deductions, and filing methods.
All of the profits generated by your LLC after taking into account deductions and allowances such as healthcare or retirement plans are subject to income tax.
Employee & Employer Taxes
When a limited liability company has several workers who are paid monthly, additional Employee-Employer taxes will have to be paid. These tax considerations vary based on numerous criteria, such as the amount and number of employees.
If you have questions or concerns about how to form an LLC, or if it's the right business structure for you, it's usually a good idea not to take chances and contact an attorney. They're not cheap, but they can help with the legal firm formation and official filing services.
Attorneys may charge anything from nothing up to several thousand dollars for their services. After a free consultation, some lawyers charge by the hour.
Business attorneys typically charge between $150 and $350 per hour on average. Some will provide a fixed fee for creating an LLC, which can range from $500 to $2,000.
The cost of legal services varies depending on the lawyer's experience and geographical location. There are a lot of competent business attorneys out there, so finding the ideal match might be difficult.
However, using a site like Avvo can help. It gives you access to a large database of lawyers from which you may comparison shop for the best Virginia LLC attorney.
How Much Does It Cost to Start up an LLC in Virginia?
The cost of forming an LLC in Virginia can range anywhere from $500 to $2,000, not including the cost of hiring an attorney. Annual fees and taxes also vary depending on the type of business.
Does Virginia Charge an LLC Tax?
Yes, the Federal Government of Virginia charges a tax on LLCs that is based on the company's income. The state income tax rate for LLCs is between 3 and 5.75 percent, while the self-employment tax rate is 15.3 percent. Federal Income Tax and other employee-employer taxes may also apply.
How Long Does an LLC Take in Virginia?
It takes approximately two to three weeks to form an LLC in Virginia. However, this may vary depending on the attorney you hire.
Is Virginia a Good State to Start an LLC?
Yes, Virginia is a great state to start an LLC. The process is relatively easy and the taxes and annual fees are relatively low. You should, however, consult with an attorney to make sure you're aware of all the necessary steps.
Do I Need to Pay a Fee to Form an Operating Agreement?
No, you do not need to pay a fee to form any operating agreements. Operating agreements are documents that are between the LLC's members that outline how the company will be operated. An Operating Agreement is not required by law, but it is recommended for all LLCs.
Virginia LLC Cost: Conclusion
LLCs are a popular business structure because they offer limited liability protection to their owners and are relatively easy to set up. The cost to form an LLC in Virginia ranges from $500 to $2,000, not including the cost of hiring an attorney. Annual fees and taxes also vary depending on the type of business.
Federal Income Tax and other employee-employer taxes may also apply. It typically takes two to three weeks to form an LLC in Virginia. Virginia is a great state to start an LLC because the process is relatively easy and the taxes and annual fees are relatively low.