How to start a LLC: An LLC or Limited Liability Company is a corporation organized as a legal entity by the laws of the states in which it operates. An LLC does not have its own board of directors, but instead appoints one or more officers to serve as its controller, agent for legal transactions, and to perform other functions. A company that operates through an LLC has its business assets housed in the LLC rather than its own buildings and properties. Its revenue and debts are therefore kept separate from its ownership and control.
There are many advantages to establishing an LLC rather than a sole proprietor or corporation. In the first place, an LLC is more flexible in choosing partners, suppliers, employees, and operating partners, and it is able to avoid double taxation on its income and liabilities. In addition, an LLC is not liable for the taxes of its partners and employees, unlike a sole proprietor or corporation. Moreover, an LLC may file a federal income tax return as an individual, while an LLC is considered as a partnership for purposes of its IRS code.
However, an LLC does have some disadvantages. An LLC does not have any authority over the operation of its owners or their respective businesses, and cannot bind them individually in the performance of their duties as owners. An LLC cannot divert its assets to other operational programs nor can it make any decisions concerning its employees or their liabilities. However, through the use of operating agreements and limited liability corporations, owners can limit their liability and increase their personal asset protection.
How to Start an LLC in Virginia - Four Steps for Success
The next step is to file an application for a Virginia Limited Liability Company. Virginia requires the filer to first obtain a state business license (also referred to as a "Virginia non-residential identification card"). After receiving this business license, the applicant must also receive all necessary filings and fees. The following step is the most crucial one: obtaining the form known as Form LLC (also known as a "creating certificate"), which must be presented to the county clerk at the office of the Secretary of State in Virginia. From this point, there is simply a short amount of time in which the applicant can complete the entire process, which includes paying the necessary state tax fees, filing a federal tax return, and finally obtaining his or her Virginia personal license. (Note that the Virginia Department of Financial Services web site does not offer advice about commence your llc journey.)
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One of the most important considerations in how to start an llc involves the filing of its annual report. All LLCs must file a biennial report with the secretary of state by the fourth month of operation. This filing is required for all domestic corporations except for limited liability companies. For these businesses, the filing of a separate annual report is required. Domestic corporations need to file a biennial report regardless of whether they are involved in any business activity, which means that they are required to file separately for each year in which they do business.
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Aside from the annual report, all LLCs are also required to file one page of articles with the secretary of state called Articles of Organization. All filing deadlines for articles must be met, which includes both the day of the filing and the day of the submission to the secretary. There is another deadline for filing state taxes: the filing of the state income tax. All income tax returns must be submitted to the state tax authority on the final day of the year in which the LLC filed its annual report. (If the LLC did not file its annual report, then the filing of articles is not required.)
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Forming an LLC in Virginia requires that all LLCs register in the state. All registered LLCs will share in one consolidated tax account. All Virginias resident businesses will also have to file a notice of incorporation with the secretary of state. Once an LLC has been registered in the Virginias, it can file an amendatory statement with the IRS. There are some things which must be filed in the statement including who among the LLC's members are C-corporations. In addition to the address given above, other information needed for the C-corporation identification include the capital, board of directors, and a record of member shareholders.
The last step in how to start an LLC in Virginia is to file a certificate of registration with the secretary of state. After the filing of the articles of organization and the statement of amendment, all required fees for formation must be paid. On final approval of the forms, all registered agents must attend a meeting held by the board of members to file their notices of resignation. This meeting is also referred to as the administrator's meeting.
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