Your LLC's Name
Your new LLC's name must be distinguishable all other Virginia business names that are either registered or reserved with the Virginia Department of State, Corporations Bureau.
The LLC's name must include, at the end of the name, Virginia "Limited Liability Company," (or "LLC" or "L.L.C.") or "Limited Company" (or "LC" or "L.C."). However, your new LLC's name is not allowed to include the words "Corporation," "Incorporated," "Limited Partnership," or the abbreviations "Corp.," "Inc.," "L.P.," or "LP."
You can reserve an available LLC name for up to 120 days for a $10 fee, and the reservation can be renewed up until 30 days before the reservation expires.
Articles of Organization
Forming your new Virginia LLC means that you have to file articles of organization. The articles of organization must be executed (signed) by a manager or other person who has been delegated the authority manage the LLC's business.and delivered, along with a copy and the $100 filing fee, to the clerk of the State Corporation Commission. The articles must include:
- The LLC's name
- The street address of the LLC's principal office
- The street address of the LLC's registered office
- The street address of the LLC's registered agent
- A statement that the registered agent is one of the following:
- An individual who is a resident of Virginia and a member or manager of the LLC
- A member or manager of a corporation that is a member of manager of the LLC
- A general partner of a general or limited partnership that is a member or manager of the LLC
- An in-state or out-of-state corporation authorized to do business in Virginia
Your LLC is considered officially "organized" once the original of the articles of organization are delivered with the fee to the State Corporation Commission. The articles are effective as of when they are filed or, if a specific date and time is indicated, the document is effective as of the specified date and time.
It can also list other items-even ones that are included in the operating agreement-if the members so desire, as long as they don't conflict with state law.
Registered Agent and Office
A Virginia LLC must have a registered agent in the state-someone to receive official state legal and administrative correspondence on behalf of the LLC. The registered office may be-but is not required to be-the LLC's place of business. An LLC registered agent may be: an individual who is a resident of Virginia and a member or manager of the LLC; a member or manager of a corporation that is a member of manager of the LLC; a general partner of a general or limited partnership that is a member or manager of the LLC; or an in-state or out-of-state corporation authorized to transact business in Virginia.
Operating Agreement
The LLC's second most important document is its operating agreement, which can be changed by the members as set forth by the agreement itself or applicable state law. Having an operating agreement is not legally required by the state, but it's a vitally important internal document that sets forth how the LLC will run.
The operating agreement needs to list the LLC's members, how much each one has invested, how any profits will be distributed, and how much relative weight each member has when voting.
The operating agreement may also include requirements for meetings (notice, quorum, voting rules, etc.) and similar functions, but it doesn't have to. Usually, though, it does include operating constraints and allowances already contained in state law and policy. It also may contain constraints on the members' authority to change or repeal the operating agreement or a provision thereof. If there is more than one member, the operating agreement must initially be unanimously approved in writing.
Membership in the LLC
A Virginia LLC must have at least one member, and each member must be a natural person or a recognized business entity. A member can acquire an interest in proportion to their contribution, by the consent of the majority of the members in a member-managed LLC, or some other manner provided for in the articles of organization or operating agreement.
Becoming a member usually requires a contribution of cash, property, services rendered to the LLC, a promissory note or obligation to contribute one of these, or an assignment of a current member's interest.
An LLC member can only resign as permitted in the certificate of organization or operating agreement, which usually specify a minimum amount of time before a member is allowed to resign
Unless the articles of organization or the operating agreement state otherwise, managers are to be elected by the members, and managers can be removed and vacancies filled by a majority vote of the members. Members' votes are weighted proportionate to their contributions to the LLC
Ongoing Requirements
Virginia does not require an annual report from LLCs, but it does require a renewal fee of $50 per year, due by September 1.
Dissolution
A Virginia LLC is dissolved when any of the following events occurs:
- Event(s) or a time specified in the articles of organization or operating agreement
- Unanimous written agreement to dissolve
- Event that makes it illegal for the LLC to continue
Taxes
An LLC by its nature does offer some tax advantages over a corporation structure, including access to more deductions, since the LLC is not required to be a separate tax entity like a corporation. Instead, it is considered a "pass-through entity" for tax purposes, meaning LLC owners report business profits and losses on their individual tax returns.
Choosing a Corporation Name
The name you choose for your new Virginia corporation is not allowed to be the same as or deceptively similar to the registered or reserved name of any other business entity in the state. It may not include language that states or implies that it's been organized for a purpose other than one allowed under state law or stated in its articles of incorporation. It must also include as a status designator one of the following terms or its abbreviation: "corporation," "incorporated," "limited," or "company."
If your corporate name is not considered to be distinguishable from one already on file with the state, it's not sufficient to just change some punctuation, a definite or indefinite article, or the status designator. In other words, if "ABC Company" is a name already on file in Virginia, it would not be enough of a difference to file your corporation's name as "The ABC Company," "A-B-C Company," or "ABC Incorporated."
Articles of Incorporation
A new corporation's articles of incorporation must be filed with the Virginia Secretary of State before it can conduct business in the Old Dominion. Incorporating in Virginia can occur for any lawful business activity (subject to Virginia regulations regarding certain industries), but there is no requirement to specifically state the corporation's purpose in the articles.
There must be at least one incorporator (a natural person or a corporate entity), who signs and files the articles of incorporation with the Secretary of State. The articles of incorporation must include:
- The minimum number of directors (state law specifies one or more).
- Qualifications for directors (may also be stated in the bylaws).
- Number of shares the corporation is authorized to issue; if more than one class of shares is authorized, the articles must state how many authorized shares are in each class, as well as a distinguishing designation for each class.
- The street address and county of the corporation's initial registered office.
- The name of the corporation's initial registered agent at the registered office; the articles must also be signed by that agent. The articles must also specify whether the agent is a Virginia resident, a director of the corporation, a domestic or foreign (out of state) corporation, an LLC, or a partnership.
Other items may-but are not required to be-included in the articles of incorporation, such as:
- Directors' names and addresses.
- Shareholder preemptive rights, if any.
- Business purpose of the corporation.
- Provisions regulating the affairs and managing the business of the corporation.
- Par value for authorized shares or classes of shares.
- Limitations on a director's or officer's liability for fiscal damages to the corporation or its shareholders in certain situations.
After the articles are filed, the incorporator(s) or initial director(s)-if they are named in the articles-must hold a meeting to complete the organization of the corporation. Virginia's laws regarding corporations give some protection from liability to directors for good-faith business decisions, as well as for minority and dissenting shareholders.
The minimum filing fee for a corporation in Virginia is $178.
Registered Agent and Office
Virginia corporations must maintain a registered agent within the state-a person or office appointed to receive official state correspondence, both administrative and legal. The agent must have the same business office address as the registered office and be either:
- An individual residing in the state who is a director of the corporation, or
- A member of the Virginia State Bar, or
- A business entity with authority to transact business in Virginia.
The corporation's registered office may be the same as any of the corporation's places of business.
Bylaws
A corporation's bylaws are critical because they describe the corporation's basic operating principles from both the managerial and legal perspectives. A Virginia corporation must maintain a copy of its bylaws at its main executive office, but is not required to file them with the state.
The incorporators or board of directors should approve the corporation's bylaws at their first meeting-insuring that they don't conflict with either state law or the articles of incorporation-and keep them updated as time goes on. The bylaws should as a minimum include:
- What authority directors have, how many there are, and how long they serve
- Duties and responsibilities of officers and how long they serve
- How consensus on major decisions is reached with and without meetings
- How, when, and where shareholders and directors meetings are held
- How stock is issued
- Requirements for providing annual financial information to shareholders
Directors and Officers
The corporation's board of directors has the responsibility for making major corporate decisions. Officers of the company-who run the day-to-day affairs of the organization-must be listed in the bylaws or elected by the board. At least one officer must authenticate records for the corporation, as well as prepare minutes of directors' and shareholders meetings. An officer may hold more than one office in the corporation unless otherwise prohibited by law.
Required Reports
Virginia corporations must file an annual report with the Virginia State Corporation Commission in the last three months of the calendar year that begins with its date of incorporation. This report (accompanied by the filing fee of $100), must include the following information:
- The corporation's name and its state or country of incorporation.
- The address of the corporation's principal office.
- The names and addresses of the corporation's directors and principal officers.
- The street address and county of the corporation's registered office.
- The name of the corporation's registered agent at the registered office.
- The aggregate number of shares which the corporation has authority to issue, itemized by class.
Taxes
The Virginia corporate income tax rate varies based on the amount of a corporation's income, as well as other factors.
