Form an LLC in Virginia

Filing the Articles of Organization

The document a Virginia LLC files and the document the Commonwealth hands back carry different names. The filing is the Articles of Organization, made with the State Corporation Commission, Office of the Clerk, on Form LLC1011, revision 01/26. Under § 13.1-1011 D the Commission issues a certificate of organization once it finds that the articles comply with the law and that all required fees have been paid.

One fee covers every filing method. Section 13.1-1005(1) sets $100 for articles of organization, and Form LLC1011 gives three routes at that price: online through the Clerk's Information System at cis.scc.virginia.gov, mail to P.O. Box 1197, Richmond, VA 23218-1197, or delivery to 1300 East Main Street, Tyler Building, 1st Floor, Richmond, VA 23219.

Section 13.1-1011 A requires three items: a name meeting § 13.1-1012; the registered office address with its city or county, plus the registered agent's name and the basis of that agent's qualification; and the principal office address, which may match the registered office but need not sit within the Commonwealth and may not be a post office box. Members and managers are not part of the filing, and the Commission keeps no record of them.

All organizers sign, and an entity organizer signs through a named individual whose title appears in the block. Knowingly signing a materially false document for filing with the Commission is a Class 1 misdemeanor.

Uploading self-prepared articles instead of using the online fields adds a published five business days for SCC review, and operating agreements and financial records are not to be attached at all.

Article 2 of Chapter 12 sets out every step of formation and carries no newspaper publication requirement, and the fee schedule at § 13.1-1005 has no publication fee.

Expedited service

The Commission publishes a response deadline for each expedited tier and sells the service only on filings submitted online through CIS. Same business day costs $200 and must be submitted by 10:00AM EST; next business day costs $50 or $100 and must be submitted by 2:00PM EST. Each returns a filing response by 4:00PM EST. Expedite fees are nonrefundable, every review takes its own fee, resubmissions are not automatically expedited, and paper filings cannot be expedited at all.

Naming a Virginia LLC

Section 13.1-1012 A requires the words "limited company" or "limited liability company" or the abbreviations "L.C.," "LC," "L.L.C.," or "LLC." Subsection B bars anything stating or implying the company is a corporation, a limited partnership, a registered limited liability partnership or a protected series.

A name uses English letters from a standard QWERTY keyboard and may carry any symbol on it except nine marks: the two braces, the two square brackets, the double quotation mark, the less-than and greater-than signs, the caret and the backslash.

Distinguishability is tested on a stripped version of the name. The Commission drops required designators and nondescript articles, conjunctions and prepositions, leaving a core name that must differ from names designated, registered or reserved for a business entity and from all active business entities except general partnerships. Section 13.1-1012 D opens one route past a conflict, where the other entity consents in writing and undertakes to change its own name.

Several words carry conditions. "Bank" and "trust" are barred unless the entity will be engaged in the banking or trust company business, or the rest of the name makes clear it will not. "Engineer," "architecture" and "land surveying," and derivations of them, require the entity to be lawfully engaged in those services. "United States," "national," "Federal" and "reserve" are closed to entities in the banking, loan, building and loan, brokerage, factorage, insurance, indemnity, savings or trust business.

Section 13.1-1013 A holds a name for the applicant's exclusive use for 120 days at a $10 fee, renewable for successive 120-day periods when filed in the 45 days before expiration. Availability is checked in the CIS name availability search.

Fictitious names

The Clerk's Office is the central filing office in Virginia for fictitious names, including those of sole proprietorships, general partnerships and trusts. Filing costs $10, releasing a name costs $10, and the LLC has to be registered first. These names need not be unique, carry no wording restrictions and need no designator. Using a fictitious name without the required filing can bring a misdemeanor conviction, a fine of not more than $2500, jail time or both, and bars maintaining an action in any court of the Commonwealth.

Registered agent

Virginia closes the list of who may serve. Under § 13.1-1011 A.2 an individual agent must be a Virginia resident tied to the company in a named way: a member or manager of the LLC or of an LLC that is a member or manager, an officer or director of a corporate member or manager, a general partner of a partnership member or manager, or a trustee of a trust member or manager. A member of the Virginia State Bar also qualifies, and § 13.1-1015 A.2 adds an officer, meaning an employee of the company other than a member or manager. The alternative is an entity agent: a domestic or foreign stock or nonstock corporation, limited liability company or registered limited liability partnership authorized to transact business in the Commonwealth, which designates one or more natural persons in writing to accept service.

The LLC may not act as its own registered agent and may have only one. The registered office is a physical Virginia address identical to the agent's business office. A virtual office, mail drop or commercial mail receiving agency is not accepted, and a post office box works only where the town or city has a population of less than 2,000. Under § 13.1-1015 B the agent's sole duty is to forward to the company at its last known address any process, notice or demand served on the agent.

Changes cost nothing: no fee attaches to LLC1016 for a registered office or agent change, LLC1017 for an agent resignation, or LLC1018.1 for a principal office update. A resignation takes effect on the earlier of 31 days after filing or the filing of a replacement (§ 13.1-1017 B), and without a replacement the company goes into pending inactive status and is canceled under § 13.1-1050.2 B on the last day of the second month after the notice month. See Virginia registered agent.

The $50 annual registration fee

A Virginia LLC files no annual report. Article 11 of Chapter 12 imposes a fee with no report attached, and the Commission requires an annual report only of corporations. Section 13.1-1062 A sets the fee at $50.

Timing keys to the formation month. The fee falls due on or before the last day of the twelfth month next succeeding the month of organization, and on that date each year after; the Commission restates it as the last day of the month the business was organized or registered. Nothing is owed in the formation year, and the fee cannot be paid before it is assessed. The assessment goes to the agent rather than the company, mailed to the registered office address on file two months before the due date, and the agent has the duty of forwarding it.

A missed date costs $25 and then the entity. Section 13.1-1064 A adds a $25 penalty to the amount due, and subsection B requires the Commission to mail notice of the penalty and of the impending cancellation. Section 13.1-1050.2 A then cancels the LLC's existence automatically if the fee is unpaid on or before the last day of the third month immediately following the due date, and subsection D adds that no member, manager or agent takes on personal liability solely by reason of the cancellation.

Under § 13.1-1050.4 a company that has ceased to exist may apply for reinstatement within five years, for a $100 fee plus every annual registration fee and penalty due before cancellation or assessable up to the date of reinstatement. A reinstated company is treated as though the cancellation had never occurred.

Closing on time skips the year's fee. Section 13.1-1062 E waives it where a certificate of cancellation, organization surrender, merger or entity conversion takes effect on or before the due date, though assessments already paid are not refunded. The closing filing is articles of cancellation, Form LLC1050, at $25. See dissolving a Virginia LLC.

Virginia taxes

The LLC act carries no franchise tax, and § 13.1-1062 A imposes the registration fee irrespective of any specific license tax or other tax or fee imposed by law. Every pass-through entity doing business in Virginia or receiving income from Virginia sources files Form 502 or Form 502PTET by the 15th day of the 4th month following the close of its taxable year, April 15 for calendar-year filers. A six-month extension is automatic with no application, and past it the maximum late filing penalty is $1200.

The individual income tax is graduated across four brackets under § 58.1-320: 2% on income not exceeding $3,000, 3% above $3,000 but not above $5,000, 5% above $5,000 but not above $17,000, and 5.75% above $17,000. An electing pass-through entity is taxed at 5.75%, and eligible owners take a refundable credit equal to their portion of the tax the entity paid.

State retail sales tax is 4.3% under § 58.1-603. Combined rates run 5.3% across most of the Commonwealth, 6% in Central Virginia, Hampton Roads and Northern Virginia, 6.3% in Charlotte County, Danville, Gloucester County, Halifax County, Henry County, Northampton County, Patrick County and Pittsylvania County, and 7% in James City County, Williamsburg and York County. An employer paying wages to one or more employees in Virginia withholds state income tax from those wages, and Virginia Tax requires new businesses to register online, with Form R-1 as the mail alternative. More sits at Virginia LLC taxes.

Local licenses and regulated professions

Section 58.1-3703 authorizes counties, cities and towns to levy license taxes on businesses, trades, professions, occupations and callings, capped by locality population under the Weldon Cooper Center for Public Service estimates, and § 59.1-74 withholds a local license until a certificate of assumed or fictitious name has been filed. Occupational licensing sits with the Department of Professional and Occupational Regulation and its boards.

Professional practices form on Form LLC1103 at the same $100 fee, with a purpose clause the Commission requires to be specific and will reject as vague. No proof of licensure goes to the Commission, and § 13.1-1102 requires members to be individuals or professional business entities licensed to render the same professional service.

Operating agreement

Section 13.1-1023 A lets members enter into any operating agreement to regulate or establish the affairs of the company, the conduct of its business and the relations of its members, and binds the company to that agreement whether or not the company executes it. The agreement need not be in writing unless the articles of organization or a written operating agreement require otherwise, and where no method of amendment is set, all of the members must agree to any amendment. Nothing is filed with the Commission. Drafting points are in the operating agreement guide.

EIN

An EIN comes from the IRS and is separate from any Virginia registration. The EIN guide walks through the application.

Frequently asked questions

How much does it cost to form an LLC in Virginia?

The Articles of Organization cost $100 under Section 13.1-1005(1) of the Code of Virginia. The amount is the same whether the filing goes through the Clerk's Information System, arrives by mail, or is delivered to the Tyler Building in Richmond.

Does a Virginia LLC file an annual report?

No. A Virginia LLC pays a $50 annual registration fee under Section 13.1-1062 instead. The State Corporation Commission lists an annual report requirement only for corporations.

What happens if a Virginia LLC misses its annual registration fee?

Section 13.1-1064 A adds a $25 penalty to the amount due. Under Section 13.1-1050.2 A, if the fee is still unpaid on the last day of the third month following the due date, the LLC's existence is automatically canceled as of that day.

Can a Virginia LLC serve as its own registered agent?

No. Form LLC1011 states that the LLC may not act as its own registered agent and may have only one. An individual agent must be a Virginia resident who holds one of the positions listed in Section 13.1-1011 A.2, or a member of the Virginia State Bar.

Does the Virginia SCC offer expedited filing?

Yes, for filings submitted online through CIS. Same business day service costs $200 with a 10:00AM EST cutoff, and next business day service costs $50 or $100 with a 2:00PM EST cutoff, each returning a filing response by 4:00PM EST.