How to Start a Business in Virginia
You should learn how to start a business in Virginia both legally and efficiently before you begin the process.3 min read
You should learn how to start a business in Virginia both legally and efficiently before you begin the process. It also helps to know some facts about the state, which will guide your business decisions and inspire your entrepreneurial spirit.
Virginia, often called the “Mother of States” and “The Old Dominion,” was one of the first states to join the union and has a rich historical background. Named for Elizabeth I, she was famously called the “virgin queen.” It's also one of the country's tech capitals, as it's been estimated that 50 to 70 percent of the country's traffic on the internet is routed through northern Virginia's massive data centers.
The state's main industries include agriculture, including tobacco, a huge cash crop, and employer. Aerospace, technology, the military, and mining round out the top five. The state is home to five companies listed on the Fortune 100 Best Companies to Work For: CarMax, Navy Federal Credit Union, Hilton, Capital One, and Mars. Other major Virginia companies include Accenture, General Dynamics, and Touchstone Energy.
Aside from these big corporations, it's interesting — and useful to new entrepreneurs — to note that almost 98 percent of all businesses in the state are small businesses. Together, small businesses employ almost half of all workers in Virginia.
The Steps to Starting a Virginia Business
The first step to starting a business in Virginia is choosing its structure. Your three choices are DBA, LLC, or corporation. Here are the characteristics of each:
- “Doing Business As” (DBA) is also called a “Fictitious Business Name” (FBN). This refers to any business that goes by a name that is different from the individual owner or any partners.
- A Limited Liability Company (LLC) is similar to the DBA structure but offers more protection against liability for the owners of the business.
- A corporation provides liability protection to its owners but has a more complex structure involving shareholders, officers, and directors.
Your next step is to choose a name for the business. There are various resources to help you choose the best name for your company; make it easy to understand and pronounce, unique, and relevant to your business activities. Do a search on Google to see if it's already taken, including names that are similar. Legally you only need a name unique within your own state, but businesses that wish to expand or do business in a wider region may want to have a name that is unique throughout the U.S.
Above all, you want to make sure your business name of choice is not already protected by a trademark. You can search the U.S. Patent and Trademark Office; be sure to include variations, misspellings, and names that sound similar to make sure there is no potential conflict.
The third step is to register your business with the state. The method and requirements for registration vary, depending upon which business structure you choose.
Forming a Virginia LLC
The steps for forming an LLC in the state are as follows:
- Hire a professional registered agent.
- File your Articles of Organization. Submit them online at the Virginia New Entity Formation website, or in person at the Virginia State Corporation Commission.
- Decide whether you want your business taxed as an LLC or as an S corporation. Each has its own pros and cons, and you may wish to consult with a tax professional about this choice.
- Hold a meeting to discuss business concerns with all involved owners and draft the company's Operating Agreement.
Forming a Virginia Corporation
The steps to creating a Corporation in the state are as follows:
- File your Articles of Incorporation with the state, through the Virginia New Entity Formation website or in person at the Virginia State Corporation Commission.
- Hire a professional registered agent.
- Hold a meeting with all involved parties to discuss the company's organization. At this point, you must define the shareholders and take financial contributions, elect directors and officers, issue stock, and draft the Corporate Bylaws.
What is a Registered Agent?
Both LLCs and Corporations formed in Virginia must have a registered agent. This person must have a physical street address within the state where they can receive mail related to your business. They will then send all important correspondence to you, the owner.
If you need help with starting a business in Virginia, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.