Incorporating a Business in Virginia
Incorporating a business in Virginia requires meeting the same requirements as in many other states.3 min read
2. Qualifying as a Foreign Entity
Incorporating a business in Virginia requires meeting the same requirements as in many other states. You will need to file the correct documents with the state, pay a filing fee, and obtain the correct business licenses and permits.
Virginia Incorporation Process
If you wish to incorporate your Virginia business, you must file Articles of Incorporation with the state. You should file this document with the State Corporation Commission and pay the required filing fees. Once you have filled out these documents with the proper information, you can file your Articles using the Corporation Commission eFile system.
You can find the specific requirements for corporations in this state in the Code of Virginia Stock Corporation Act. There are a few general guidelines that you should keep in mind before beginning the incorporation process. First, incorporators, the people who file your Articles of Incorporation, are not required to be Virginia residents.
When starting your corporation, you do not have to have stockholders right away, and there is no minimum paid-in cash requirement. You will need a suitable name for your company that's unique and contains a word indicating your business's corporate status, like:
Search for registered business names to make sure that the name of your company doesn't conflict with the name of another Virginia business.
If you wish to incorporate in Virginia, you have to keep a registered office in the state. Every year, your corporation will need to file an annual report. You should submit this report to the Corporation Commission.
Stock corporations will need to pay an entrance fee based on the number of shares authorized by the company. You will need to pay a $50 entrance fee for every 25,000 authorized shares. This fee applies up to a million shares. A $2,500 applies if you have authorized more than a million shares. Non-stock corporations will pay a $50 fee. You will need to pay a $25 filing fee, after which your corporation will receive a Certificate of Authority.
Qualifying as a Foreign Entity
If you've already incorporated your business in another state and are thinking about expanding into a new state such as Virginia, you will need to look at the foreign qualification process. Foreign qualification is essentially registering your business in a state other than the state of incorporation.
For example, imagine that the location of your business is in Virginia, but you decided to incorporate in Delaware because of the state's business-friendly laws. Before you could do business in Virginia, you would need to register your corporation as a foreign entity.
Before you attempt to register your business as a foreign entity, there are a few factors you should consider that will help you decide if foreign qualification is actually necessary. If you have a physical presence in the state, then foreign qualification is a must. Similarly, if you have already applied for a business license in a state, then registering as a foreign entity is a good idea.
Other factors to consider include:
- How often you interact with clients face-to-face in the state.
- How much of your revenue comes from the state.
- If you have employees in or pay payroll taxes in the state.
Simply selling products in a state or offering services to customers doesn't necessarily mean that you'll need to register as a foreign entity. For instance, if you work as an online consultant and offer services to customers in multiple states, foreign qualification may not be necessary. Earning money in a state doesn't always mean that you're conducting business in that state.
Consulting with an attorney is usually a good idea if you're considering foreign qualification, particularly if you're running an online business. Your attorney should be able to determine if you need to register as a foreign entity and can help you complete the registration process.
If you decide to complete the foreign qualification process, you will need to present your Certificate of Authority to the state in which you're registering. Your Certificate of Authority, or Certificate of Good Standing, proves that your business is in good standing with the incorporation state. Before you attempt foreign qualification, you should make sure that you have paid your taxes and fees in the state where you incorporated and have fulfilled any other obligations.
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