Did you begin the new year with the goal of starting a new business in Virginia? If so, you’ll want to take all the necessary steps to get your business set up correctly. From deciding on the business structure to obtaining licenses and permits, there is some legwork involved. We’ll cover what you need to do to get your business up and running in Virginia.
Virginia Business Structures
There are several options when it comes to setting up your business structure. A sole proprietorship is the most common and simplest business entity in Virginia, but it provides zero legal protections for you. However, you may want to consider other options, such as a limited liability company (LLC), corporation, or partnership, depending on the size and number of owners of your new company. You can read more about the different types of business structures on Virginia’s SCC website.
Naming a Business in Virginia
When naming your new business, you must choose something in line with Virginia’s regulations and guidelines. Depending on the type of business you’ve decided to form (LLC, Corporation, etc.), your company name may need to include certain words or abbreviations like “LLC” or “Corporation.” Reach out to a business attorney or check with the Virginia SCC for more detailed information about what you need to include in your business name. You’ll also want to check that another business in Virginia does not already use the name. You can do so through the name check availability search on the SCC website.
Licenses & Permits for Businesses in Virginia
Depending on the type of business you plan to form, you may need to obtain specific state or local licenses and permits to operate legally. It is important to research what documents you need to acquire before starting operations so that you comply with state regulations. The licenses and permits you need to obtain will vary according to the type of business you open. Some companies may not require a license, while others may need multiple licenses or permits depending on their industry. If you need help, it’s best to consult one of our business attorneys who understands the regulations applicable for your particular business. You can reserve a business name for up to 120 days with the SCC, so this is an excellent time to research what documents you need to get before officially filing.
Do all businesses in VA need a business license?
No, not all businesses in Virginia require a business license. However, some industries are subject to additional requirements, such as permits or certification from the state. When starting a business in Virginia, it’s best to consult a business attorney who can help you understand the regulations of your respective industry and entity.
Forming & Registering a Business in Virginia
Once you’ve decided on your business structure and have researched all necessary licenses and permits, it’s time to form and register your business with the State Corporation Commission (SCC). Submitting your new business forms to the SCC is reasonably straightforward, but you’ll want to have a few things in place before doing so. You’ll need to designate a registered agent, open a business bank account, and obtain an employer identification number (EIN). You’ll also want to create operating agreements and bylaws for your business. These documents are essential to ensure that your business’s running is as smooth and organized as possible. See our article “Don’t DIY Your LLC” for more information.
Designate a Registered Agent
A registered agent is a person or company that has consented to accept legal documents on behalf of your business. You will need this when filing with the SCC, so be sure to designate one prior to submitting your formation forms. There are restrictions on who this agent can be.
Obtain Your Business’s EIN
Applying for an EIN (employer identification number) is a critical step in registering your business. Your EIN will allow you to open a business bank account, hire employees, and file taxes under the name of your business. This should be done in consultation with your accountant and attorney.
Open a Business Bank Account
You’ll want to open a separate business bank account to keep track of your business finances. This will help make filing taxes more manageable and ensure you have the funds to run your business. According to Virginia state law, most companies (aside from Sole Proprietorships) must have a separate business bank account.
Submit Formation Forms to the SCC
Once you’ve taken care of the above steps, it is time to file your business formation documents with the SCC. You can find all the forms necessary for filing on their website. Depending on what type of business structure you’ve chosen and what documents you need to submit, the process may vary.
Create an Operating Agreement & Bylaws
An operating agreement for an LLC outlines the rules and regulations of your business, while bylaws for a corporation set out its purpose and objectives to handle similar issues. These documents are vital in ensuring that your business runs smoothly. An attorney can be beneficial in drafting these documents.
Get Business Insurance
Insurance protects your business from potential lawsuits and other financial risks. Depending on your business type, the insurance policies you need may vary greatly, and some may be required by law. Consult with a lawyer who has experience in business startups to ensure that you have the necessary coverage.
If Opening a Brick & Mortar Location, Check Zoning Laws
If your business involves having a physical location, it’s important to check local zoning laws. Depending on your industry, you may need additional permits from the local municipality. Again, speaking to a lawyer can ensure that you comply with all local and state regulations.
Reach Out to McMillan Metro for Your Business’s Legal Needs
The experienced attorneys at McMillan Metro can give you a host of additional information about starting a business in Virginia and throughout the DMV. We’ll help you navigate the various steps in setting up your business and give you peace of mind knowing everything is in proper order. With the right legal representation, you can be sure that your business will be up and running quickly (and legally). These documents are critical if there will be more than one partner in your business.