Virginia LLC Operating Agreement: Everything You Need to Know
A Virginia LLC operating agreement is highly recommended for newly formed limited liability companies within the state in order to document the regulations and rules for operation of the company.3 min read
2. Forming an LLC in Virginia
3. Other LLC Formation Tasks
A Virginia LLC operating agreement is highly recommended for newly formed limited liability companies within the state in order to document the regulations and rules for operation of the company. This document covers many details that are not included in official applications for registering the LLC, and help strengthen the new company and its credibility.
The state of Virginia does not require that you file an operating agreement, but it needs to be sent to each owner, or member, for review. The operating agreement creates a company that is managed by its members, and each member works to create and abide by the rules and regulations for its administration.
Why Do You Need an Operating Agreement?
If the operating agreement is not required by the state, you might wonder why you need one and what should be included in the document.
- A well-written operating agreement protects the members from any disputes between one another and can even help if the company is sued.
- The document covers subjects such as the responsibilities and duties of the LLCs management, member contributions of capital, and how profits and loss are distributed.
- The operating agreement separates each member from the LLC and protects each member's private assets in the event of litigation or bankruptcy of the business.
- A copy of the operating agreement may be required by a financial institution if you are seeking a loan or a title company if you are buying real estate, as well as by accountants, attorneys, or investors.
- If the company is sued, the court will probably want you to provide a copy of the operating agreement to prove that your LLC has a well-organized, documented structure.
Your LLC's operating agreement is not set in stone; it needs to be changed as the business evolves and grows. Whenever anything important changes, such as when a member moves to a new address, if the registered agent changes, or if the business changes locations, the operating agreement needs to be changed as well. When major changes are made, such as selling the interest of a member who is leaving, it's best to consult with an attorney. Be sure to have all members sign it.
Forming an LLC in Virginia
Forming an LLC in the state of Virginia is much the same as any other state in the U.S. The steps are as follows:
- Choose a name for the LLC that contains the words “Limited Liability Company” or "LLC."
- Your business name must be different enough from any other LLC that has been registered in Virginia to avoid any confusion. You can check the state's business database to make sure your desired name is available.
- Your desired name may be reserved for 120 days with an Application for Reservation or for Renewal of Reservation of a Business Entity Name. This needs to be filed with the Virginia Commonwealth Corporation Commission and must be sent by mail with a $10 fee.
- It's advised that you also register your business name as a trademark under state and federal agencies.
- You need to select a registered agent to receive and forward all correspondence from the government or legal system. This can be anyone with a Virginia address who is qualified to conduct business in the state and can maintain availability during normal business hours.
- Actual formation of the LLC occurs when you file the Articles of Organization with the state's Corporations Commission. This document needs to include the business name and address, as well as the registered agent's name and address.
- Your LLC may be a foreign LLC, meaning it is formed outside of Virginia, or a domestic LLC, which is formed inside Virginia. Specify this on the form.
- The processing fee to complete your filing and registration is $100, which can be paid online with a credit card. Alternatively, you can send a check to the State Corporation Commission.
Other LLC Formation Tasks
After filing your LLC registration, this is the time to prepare your operating agreement.
You should also obtain an Employer Identification Number (EIN), even if you do not intend to hire any employees right away. This is used for taxes and is usually required for opening a business bank account. There is no filing fee for this, and you can do it easily online.
Depending on what type of business you are forming, you may need to apply for various kinds of business licenses from local and state agencies.
If you need more information or help with a Virginia LLC operating agreement, 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