All About Incorporation Laws in Virginia
More than 625,000 businesses start each year, according to the Small Business Administration. If you’re one of the people starting a business, you have a lot of decisions to make.
You have to decide if you want to incorporate your business or remain a sole proprietor. You need to figure out incorporation laws and where to incorporate your business. There are tax implications to every decision.
Most people think that the best places to incorporate are Delaware and Wyoming because they have favorable business laws.
Those states aren’t a good fit for everyone because they end up spending more money to maintain the corporation. Virginia is another state that you should consider. Read on to learn more about incorporating your business in the Commonwealth of Virginia.
Types of Corporations in Virginia
Before you incorporate your business, you need to know which type of legal entity suits your business. A sole proprietor that wants legal protections can file as a single-member LLC.
Many small businesses choose to incorporate an S-Corps. This structure lets you have up to 100 shareholders. It’s more of a tax structure than a legal business entity. For example, you can be a single-member LLC and choose to be taxed as an S-Corp.
C-Corporations are another option, though these are usually for businesses that plan to offer stock or get outside investment.
In Virginia, corporations are overseen by the State Corporation Commission. The commission has a clerk that runs it.
How to Incorporate in Virginia
Before you incorporate your business, do your research and make sure it’s the best state to do so. Most of the time, the place where you live and do business is the best state to incorporate.
You’ll need to choose a name for your business. Research the State Corporation Commission to make sure it’s not already taken. Do another search on the federal government’s databases for trademarks and copyrights to make sure you’re in the clear.
Virginia incorporation laws say that you need to have a board of directors. The board represents the interests of all shareholders and the company.
You can have a single board member or several. If you’re a small business or sole proprietor, you can select yourself as the single board member.
The next step is to find a registered agent. Their job is to accept important paperwork from the Clerk of the Commission. You can serve as your own registered agent, but your information becomes part of the public record.
You need to have articles of incorporation and a set of bylaws. The articles of incorporation detail the ownership structure of the business. You can hire an attorney to draw up these documents.
How much does it cost to incorporate in Virginia? There’s a $25 filing fee and a charter fee. The cost of the charter fee depends on how many shares your business has.
Virginia Incorporation Laws
Is Virginia the best place to incorporate your business? The incorporation laws in the Commonwealth are simple, which makes it easy to form a business there.
Be sure to read the other business and lifestyle tips on this site.
Trevor Anderson wrote this article on behalf of FreeUp. FreeUp is the fastest-growing freelance marketplace in the US. FreeUp only accepts the top 1% of freelance applicants. Click here to get access to the top freelancers in the world.
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