Virginia boasts the country’s sixth-best economic climate and ranks second for ease of doing business. With great availability of a highly skilled workforce and a reputation for ease of doing business, the Old Dominion provides a fantastic platform for those who want to start a new business.
How to Start a Business in Virginia:
1. Determine your business structure.
Choosing the right legal structure for your company is important. Your choice will have an impact on taxes, paperwork, personal liability, and your ability to raise funds.
You can choose from the following legal structures:
A sole proprietorship is the simplest structure and usually involves one individual who is solely responsible for the enterprise, while a partnership is suitable for businesses with two or more owners. A corporation is a standalone entity with shareholders, while a Limited Liability Company (LLC) is the most popular type because of minimal paperwork, flexibility, tax benefits, and simple implementation process. LLC business owners are not obligated to file a corporate tax return.
Businesses are regulated by Virginia state laws and must be registered through the Virginia Business One Stop website that is managed by the Virginia Secretary of State.
2. Write a business plan.
Your business plan is the foundation of your new business and will serve as an invaluable guide for how to structure, run and grow your company. The business plan must meet your needs and can fall into one of two common categories: traditional or lean startup.
The traditional plan is very detailed, takes more time to write, and is quite comprehensive, while the lean startup plan is streamlined and fast to write.
A strong business plan can help you get funding and makes opening a new business easier. You can consult with the Virginia Department of State website, a free service that offers business planning and consulting for small business owners in Virginia.
3. Sign up for business banking.
Your business and personal finances must be kept separate to maintain accurate records. With a business bank account, you can easily obtain statements and access products that would not be available to you as an individual.
4. Seek funding.
Opening a new business often requires capital. If you are unable to fund your new business, you will need to take out a loan. There are three common ways to fund your business: commercial loans, business lines of credit and small business loans.
A popular organization that can assist you with small business loans in Virginia is Virginia Community Capital.
5. Decide on a business name.
Make a list of names that you like and perform a Google search to find any conflicts with other Virginia business names.
Once this is done, you will need to do a trademark search to ensure that the business name that you chose has not already been trademarked. You can perform the trademark search at the U.S. Patent and Trademark Office and the Trademark Electronic Search System. These databases have a comprehensive list of business names that are registered together with their classification.
After you have confirmed that your business name is not trademarked, you need to check the Virginia State Corporation Commission website to ensure that your business name is not the same or similar to another corporation registered in Virginia.
If you are satisfied that your business name is available, you can then register it on the U.S. Patent and Trademark Office website. You can check out our guide on How to Name a Business to assist you with naming your business.
Once you have found a suitable name, make sure to register the matching web domain and social media handles, should you wish to market your business online. You can use our How To Register a Domain Name guide to assist you with the process.
6. Request an Employer Identification Number.
Every business needs to have an Employer Identification Number (EIN). Registering for an EIN is very easy—all you need to do is go to the IRS website. You can complete the application online, and save your EIN confirmation notice once you receive a number from the IRS.
7. Acquire business licenses and permits.
The state of Virginia does not require businesses to have a statewide business license. You will, however, require a specific business license depending on the type and location of your business.
You can consult with the City Applications website to check the license and permit requirements for your business.
8. Hire employees.
To start hiring you will need to register at the Virginia New Hire Reporting Center. Each employee will need to be registered within 20 days of starting work.
The Virginia Human Rights Act protects employees against discrimination on the basis of age, race, creed, color, sex, sexual orientation, gender identity, national origin, religion, or disability.
The Virginia Child Labor Law prohibits the employment of minors under the age of 14.
An employer is entitled to view a job applicant’s criminal history and obtain the relevant records from the criminal justice system.
9. Check your business employer requirements.
Business employer requirements are specific to the type of business that you are starting and include various labor, safety and tax obligations that need to be met. You should consider hiring a tax or business attorney to ensure your business is fully compliant with the laws in Virginia.
If you are starting a business in Virginia, you will need to take note of the following important items:
Virginia’s law requires all employers to provide workers’ compensation coverage to their employees. You can obtain more information at the Virginia Workers’ Compensation Commission website.
Health insurance isn’t a requirement for small businesses in Virginia.
In Virginia, your small business is required to establish an unemployment insurance tax account with Virginia Employment Commission. If your business is required to contribute towards unemployment insurance, you will need to file quarterly reports.
Virginia Sales & Use Tax
Every business selling taxable tangible personal property in the state of Virginia is required to pay sales and use tax. Services rendered are not taxable. You will need to register for a sales tax permit with Virginia Tax.
Virginia Registration and Filing Fees:
LLC Articles of Organization
You can view a comprehensive list of fees here.
How do I obtain a business license in Virginia?
The State of Virginia does not require a general business license. However, depending on your business type and location, you may need to obtain special licenses and permits from the city and local government.
How much does a business license cost in VA?
Virginia registration and filing fees will depend on the license or permit your business requires. You can consult with the City Applications website to check the license and permit requirements for your business.
How much does it cost to start an LLC in Virginia?
It cost $100.00 to start an LLC business in Virginia.
Do you need a business license in VA?
It depends on your business type and location. While there is no statewide business license expected, almost all businesses are required to obtain some type of business license or permit to legally operate their business in Virginia.
How do I start a cleaning business in Virginia?
Do I need to register my business in Virginia?
Yes. You can register your business with the Virginia Department of State.
How do I get a tax ID number in Virginia?
Visit the IRS website and apply online for a tax ID number, also known as an EIN. Simply save your EIN confirmation notice once you receive a number from the IRS. There is no additional charge.
How do I start a sole proprietorship in Virginia?
How do I form an LLC in Virginia?
Do you need a business license to sell on Etsy in Virginia?
No. However, Virginia law requires a sellers permit to sell products on Etsy.
What are the best banks for small business in Virginia?
What important posters should be at a Virginia business premises?
- Fair Labor Standards Act.
- Virginia Occupational Safety and Health Act.
- Virginia Workers’ Compensation.
- Employee Polygraph Protection Act.
- Virginia Unemployment Compensation Act.
How much does it cost to start a business in Virginia?
Virginia articles of incorporation for LLCs and Partnerships cost $100.00.
How do I register a business in Virginia?
You can register your business at the Virginia Business One Stop website that is managed by the Virginia Secretary of State.
How do I start a business in Virginia with no money?
- Use services to generate cash flow and fund a product-based business.
- Get creative to discover funding sources.
- Grind it out and look for business, even if you don't get paid for it.
- Use your current resources in different ways to generate income.
- Get a credit line to help with the early stages of your business.
- Locate an accelerator if you can hit the market swiftly.
- Crowdfund and allow the public to invest a small percentage of money in return for a future buy-in.
- Use a business incubator to provide funding designed specifically to financially assist a startup company.
How can I protect the name and logo of my business in Virginia?
The easiest way is to register your business name on the U.S. Patent and Trademark Office website. Prior to registration, remember to check on the Trademark Electronic Search System and the Virginia State Corporation Commission website to ensure that your business name is not already registered by another company.
Do I need workers’ compensation for my new business in Virginia?
All employers in Virginia are required to provide workers’ compensation coverage to their employees.
Does my business in Virginia need to contribute to health insurance?
Health insurance isn’t a requirement for small businesses in Virginia.