Starting a Corporation in Virginia | What You Need to Know

Start a Corporation in Virginia

In Virginia, starting a corporation can benefit entrepreneurs looking to establish a separate legal entity for their business. Incorporating your business provides liability protection for its owners and offers potential tax benefits and a professional image. This comprehensive guide will walk you through Starting a Corporation in Virginia, from choosing a corporate name to fulfilling ongoing compliance requirements. Some people consider starting a corporation since it has advantages and benefits rather than Starting an LLC in Virginia.

Webinarcare Editorial Team will help you gain knowledge in starting a corporation with thorough research and market study. It would be best to cross-check all the factors in this article before forming a corporation.

What is a Corporation in Virginia?

A corporation in Virginia is a business organization recognized as a separate legal entity from its owners, also known as shareholders. When a corporation is formed, shareholders invest capital by purchasing shares of stock and, in return, become partial company owners. The corporation is managed by a board of directors elected by the shareholders to oversee the company’s operations and make important decisions. Corporations in Virginia are required to have at least One directors. One of the main advantages of a corporation in Virginia is that it provides limited liability protection to its shareholders, meaning their assets are not at risk if the corporation incurs debt or is legally sued.

Recommended: Online Corporation Formation services offer lifetime customer support, 100% correctness, and the ability to fill out and submit all these forms on your behalf in a lot less time. We recommend using –

LegalZoom ($149 + State Fees) Online Corporation Setup

Common Types of Corporations

Before you start with a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

C-Corporation

C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.

S-Corporation

S-Corporation in Virginia is set up similarly to a C-corporation but has different tax implications and owner limits. An S-Corporation has no more than 100 stockholders and is not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.

Nonprofit Corporation

Religious, educational, and charity institutions frequently use nonprofit businesses to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations.

It is recommended to Start a Corporation in Virginia if you would like to provide limited liability protection to your shareholders rather than Virginia LLC. However, you may want to consult to LegalZoom’s Business Attorney before starting a business.

WEBINARCARE EDITORIAL TEAM

How to Start a Corporation in Virginia

To start a corporation in Virginia, you must follow the below steps that, include choosing a corporate name, hiring a Registered Agent, appointing directors, filing for Articles of Incorporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, and annual reporting and ongoing compliance. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choosing a Corporate Name

The first step in starting a corporation is choosing an available name that complies with Virginia naming rules. Most states require that the name of a corporation be distinguishable from other registered business names and include a corporate designator such as “Corporation,” “Incorporated,” “Company,” or an abbreviation thereof.

Here are some guidelines you must follow while naming your corporation in Virginia-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

To check the availability of your desired corporate name, you can search the Virginia Secretary of State‘s business name database and Business Name Search in Virginia. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $10 and mail name reservation fee of $10. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by three methods, online, by mail, and in person filing., which costs around $10. In addition, the DBA’s validity in Virginia is Indefinite, which you can file in Virginia Secretary of State.

You can check out How to File a DBA in Virginia for clearer understanding.

Step 2: Hire a Registered Agent

Hiring a Registered Agent is essential in starting a corporation. Registered Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence on behalf of your corporation. They ensure that your corporation remains compliant with state regulations and requirements. There are Virginia Registered Agent Services to check in forming Virginia Corporation. We reviewed some of the best-registered agent services and provided features as an add-on with their packages.

LLC Service

Rating & Pricing

Top Features

Learn More

#1 Recommendation

$299 Per Year

  • Free LLC Formation

  • RA service in all states

  • Legal consultation

$125 Per Year

  • Flat price for RA service

  • LLC formation package

  • Fast service

Step 3: Appointing Directors

Corporations in Virginia are required to have at least One directors, though some states may require more. Directors are responsible for overseeing the corporation’s management and making major decisions on behalf of the company. In Virginia, directors must be at least 18 years old and do not need to be state residents.

When appointing directors, it is essential to consider individuals who are knowledgeable, trustworthy, and capable of making sound business decisions. Maintaining a record of appointed directors, including their names, addresses, and terms of service, is also a good idea.

Step 4: Preparing and Filing Articles of Incorporation

After you appoint the initial board of directors in your Virginia corporation, the next step is to write and file a Articles of Incorporation. In writing, the Virginia Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Registered Agent contact information, and the names and addresses of incorporators and initial board members, should be written.

To officially form your Virginia corporation, you must prepare and file Articles of Incorporation with the Virginia Secretary of State. The Articles of Incorporation is a legal document that outlines essential information about your corporation, such as its name, address, purpose, and details about its stock.

The specific requirements for Articles of Incorporation vary by state, but generally, the document must include the following:

  • The corporate name
  • The purpose of the corporation
  • The name and address of the registered agent
  • The names and addresses of the initial directors
  • The number of authorized shares and their par value
  • The name and address of the incorporator(s)

Once the Articles of Incorporation are complete, please submit them to the Virginia Secretary of State’s office, along with the required filing fee. Fees vary by state, but in Virginia, the Articles of Incorporation filing fee costs around $100 for online and by mail filing or in person filing. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Get the eForm from the SOS site, login/subscribe to the site, fill up the form, submit online
  • Offline filing: Send the form by mail to or drop it off in person at State Corporation Commission, Clerk’s Office, P.O. Box 1197, Richmond, VA 23218-1197

Step 5: Creating Corporate Bylaws

Now you are done filing Articles of Incorporation in Virginia, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing Virginia corporation. Bylaws are the internal rules and regulations that govern the corporation’s operations and management. They outline the rights and responsibilities of directors, officers, and shareholders and provide guidelines for holding meetings and making decisions.

Key provisions to include in your corporate bylaws may include:

  • The corporation’s purpose and principal place of business
  • The roles and responsibilities of directors, officers, and shareholders
  • The process for appointing and removing directors and officers
  • The procedures for holding annual and special meetings
  • The methods for amending the bylaws and Articles of Incorporation
  • The procedures for issuing stock and maintaining shareholder records

Once the bylaws are drafted, they must be adopted by the corporation’s board of directors. Keeping a copy of the bylaws with your corporate records and updating them to reflect changes in the corporation or applicable laws is essential.

Step 6: Holding the Initial Board of Directors Meeting

The initial board of directors meeting is a crucial milestone for your Virginia corporation. During this meeting, the directors will adopt the corporate bylaws, elect officers, and make other key decisions to set the foundation for the corporation’s operations.

The agenda for the initial board meeting may include the following:

  • Adopting the corporate bylaws
  • Ratifying any pre-incorporation actions taken by the incorporator(s)
  • Electing corporate officers (e.g., president, vice president, secretary, treasurer)
  • Designating a corporate bank account
  • Authorizing the issuance of stock
  • Approving necessary licenses, permits, and tax registrations

It is essential to keep detailed minutes of the initial board meeting, documenting the decisions made and actions taken. These minutes should be stored with your corporate records.

Step 7: Issuing Stock

Corporations in Virginia are required to issue stock to their owners, also known as shareholders. When preparing to issue stock, you must determine the number of authorized shares and their par value, as outlined in your Articles of Incorporation. You may choose to issue different classes of stock, each with its rights and privileges, such as voting rights and dividend preferences.

The process for issuing stock typically involves the board of directors approving a stock issuance resolution, determining the price per share, and recording the issuance in the corporation’s stock ledger. Maintaining accurate and up-to-date records of all stock transactions, including transfers and cancellations, is crucial to ensure proper ownership tracking and compliance with securities laws.

Step 8: Obtaining Required Licenses and Permits

Depending on the nature of your corporation’s activities and location, you may need to obtain various licenses and permits to operate legally. These may include federal, state, and local requirements, such as:

  • A Federal Employer Identification Number (EIN) for tax reporting and employee withholding purposes.
  • State sales and use tax registration, if your corporation sells taxable goods or services
  • Professional or occupational licenses for specific industries (e.g., healthcare, construction, food service)
  • Virginia Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required Virginia licenses and permits before commencing operations and maintaining compliance with any ongoing renewal or reporting requirements is essential.

Step 10: Registering with State Tax Agencies

In addition to obtaining licenses and permits, your Virginia corporation may also need to register with various tax agencies. This may include registering for sales and use tax, obtaining an Employer Identification Number (EIN) in Virginia for payroll tax purposes, and filing state income tax and franchise tax returns.

An EIN will serve as the tax ID for your Virginia corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Virginia can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Each state has tax requirements, so consult a tax professional or Virginia Department of Taxation for guidance on your specific obligations.

Step 11: Annual Reporting and Ongoing Compliance

Once your Virginia corporation is up and running, you must fulfill ongoing reporting and compliance requirements to maintain good standing. This may include filing Annual Report with the Virginia Secretary of State, updating your corporate records to reflect changes in directors or officers, and staying current on any required licenses or permits.

In addition, it is essential to stay informed about changes in corporate laws and regulations that may impact your business and to seek professional advice when needed.

Paying Your Taxes in Virginia

Even if you have established your corporation in Virginia, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Virginia has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Virginia are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Virginia

In forming a corporation in Virginia, a filing and Annual fee must be paid. Without it, your corporation won’t operate. A corporation’s initial filing fee may vary from state to state. However, in Virginia, it costs $100 for online and by mail filing or in person filing. The corporation in Virginia also has to file an Annual Report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly.

FAQs

What is the minimum number of shareholders required to start a corporation in Virginia?
Virginia does not have a minimum number of shareholders requirement for forming a corporation.
How much does it cost to start a corporation in Virginia?
Filing Articles of Incorporation with the Virginia State Corporation Commission costs $100.
What are the filing requirements to form a corporation in Virginia?
You must file Articles of Incorporation with the Virginia State Corporation Commission.
How long does it take to form a corporation in Virginia?
It usually takes five to seven business days for the Virginia State Corporation Commission to process Articles of Incorporation.
Can I form a corporation online in Virginia?
Yes, you can file Articles of Incorporation online with the Virginia State Corporation Commission.
What is the age requirement to form a corporation in Virginia?
There is no age requirement to form a corporation in Virginia.
Is a resident agent required in Virginia for forming a corporation?
Yes, every corporation that is formed in Virginia must have a registered agent located in Virginia.
Can a corporation be registered in Virginia if all the owners are out-of-state residents?
Yes, a corporation can be registered in Virginia even if all the owners are out-of-state residents.
Can a corporation have a PO Box as its registered office address in Virginia?
No, a corporation’s registered office address in Virginia cannot be a PO Box.
Can a corporation in Virginia be dissolved voluntarily by shareholders?
Yes, a corporation in Virginia can be dissolved voluntarily by its shareholders.
How many directors does a Virginia corporation need to have?
A Virginia corporation can have one or more directors.
Can a Virginia corporation be formed as a non-profit organization?
Yes, a Virginia corporation can be formed either as a for-profit or non-profit organization.
Is a business license required to form a corporation in Virginia?
A business license is not required to form a corporation in Virginia; however, certain business activities may require specific licenses or permits.
Can a foreign corporation do business in Virginia without registering?
No, foreign corporations engaging in business in Virginia must first register with the Virginia State Corporation Commission.
What are the ongoing filing requirements for a Virginia corporation?
A Virginia corporation must file an Annual Report with the Virginia State Corporation Commission and pay a $50 fee.
Can a Virginia corporation change its name?
Yes, a Virginia corporation can change its name by filing Articles of Amendment with the Virginia State Corporation Commission.
How many officers are required for a Virginia corporation?
A Virginia corporation must have at least one officer, but it can have multiple officers who hold various positions.
Can a Virginia corporation have just one owner?
Yes, a Virginia corporation can have just one owner; this is known as a single-member corporation.
Can a Virginia corporation issue stock to its employees?
Yes, a Virginia corporation can issue stock to its employees through an employee stock ownership plan.
When is an annual report due for a Virginia corporation?
The Annual Report for a Virginia corporation is due by the last day of the month in which the corporation was initially registered.
What is a certificate of good standing in Virginia?
A certificate of good standing in Virginia indicates that a corporation is current on all its business filings and taxes.
Can a Virginia corporation sell stock publicly?
Yes, a Virginia corporation can issue and sell stock publicly through an initial public offering (IPO).
Can a Virginia corporation join a national organization without being registered in other states?
Yes, a Virginia corporation can join a national organization without being registered in other states; however, the corporation may need to register in other states to conduct business there.
Can a Virginia corporation declare bankruptcy?
Yes, a Virginia corporation can declare bankruptcy, which usually involves filing for Chapter 7 or 11 bankruptcy.
Can a Virginia corporation pay dividends to shareholders?
Yes, a Virginia corporation can pay dividends to its shareholders if it has sufficient profits.
Can a Virginia corporation have members and shareholders simultaneously?
No, a Virginia corporation can have members or shareholders, but not both.
Can a Virginia corporation change its registered agent?
Yes, a Virginia corporation can change its registered agent by filing an Annual Report or by filing a Change of Registered Office or Registered Agent form with the Virginia State Corporation Commission.
Is an attorney required to form a corporation in Virginia?
An attorney is not required to form a corporation in Virginia, but it is often recommended to ensure compliance with state laws.
Do all shareholders have to be present at the first organizational meeting of a Virginia corporation?
No, not all shareholders have to be present at the first organizational meeting of a Virginia corporation; a quorum must be present which is usually stated in the corporation’s bylaws.
How do I start a corporation in Virginia?
You can start a corporation in Virginia by filing articles of incorporation with the State Corporation Commission.
What is the State Corporation Commission of Virginia?
The State Corporation Commission of Virginia is a state agency that oversees business filings and regulates various industries.
Can I file for incorporation online in Virginia?
Yes, you can file for incorporation online in Virginia through the State Corporation Commission’s website.
What are the requirements for naming a corporation in Virginia?
The name of a corporation in Virginia must be unique, distinguishable, and include one of the following words or abbreviations
How long does it take to process incorporation documents in Virginia?
It typically takes 1-2 business days to process incorporation documents in Virginia.
Do I need to submit a business plan with my incorporation documents in Virginia?
No, you do not need to submit a business plan with your incorporation documents in Virginia.
What is the minimum number of directors required for a corporation in Virginia?
A corporation in Virginia must have at least one director.
Do directors of a Virginia corporation need to reside in Virginia?
No, directors of a Virginia corporation do not need to reside in Virginia.
Is there a residency requirement for shareholders of a Virginia corporation?
No, there is no residency requirement for shareholders of a Virginia corporation.
Are Virginia corporations required to have annual meetings?
Yes, Virginia corporations are required to have annual meetings.
What documents are required for annual meetings of a Virginia corporation?
Annual meetings of a Virginia corporation require notice of the meeting, an agenda, minutes of the prior meeting, and any other relevant documents.
Can a Virginia corporation have just one shareholder?
Yes, a Virginia corporation can have just one shareholder.
Do Virginia corporations need to file annual reports?
Yes, Virginia corporations need to file annual reports with the State Corporation Commission.
Is it necessary to register a Virginia corporation for state taxes?
Yes, it is necessary to register a Virginia corporation for state taxes.
Are Virginia corporations subject to state income tax?
Yes, Virginia corporations are subject to state income tax.
Is a shareholder agreement required for Virginia corporations?
No, a shareholder agreement is not required for Virginia corporations, but it can be helpful to outline the rights and responsibilities of each shareholder.
What is the liability protection for shareholders of a Virginia corporation?
Shareholders of Virginia corporations have limited liability protection.
Are Virginia corporations required to have a registered agent?
Yes, Virginia corporations are required to have a registered agent.
What is a registered agent?
A registered agent is a person or company designated to receive service of legal process on behalf of a corporation.
Can I use a post office box as the address for the registered agent of my Virginia corporation?
No, a post office box is not a valid address for the registered agent of a Virginia corporation.
Can I change the registered agent for my Virginia corporation?
Yes, it is possible to change the registered agent for a Virginia corporation.
How do I dissolve a Virginia corporation?
To dissolve a Virginia corporation, you must file dissolution documents with the State Corporation Commission.
Are there any taxes or fees for dissolving a Virginia corporation?
Yes, there may be taxes or fees associated with dissolving a Virginia corporation depending on the circumstances.
Can I convert another type of business entity into a Virginia corporation?
Yes, it is possible to convert another type of business entity into a Virginia corporation.
Can I move my out-of-state corporation to Virginia?
Yes, it is possible to move an out-of-state corporation to Virginia, but the process can be complex.
Do I have to pay Virginia income taxes if I’m a shareholder but don’t live in Virginia?
No, you do not have to pay Virginia income taxes if you’re a shareholder but don’t live in Virginia.
What information is included in the articles of incorporation for a Virginia corporation?
The articles of incorporation for a Virginia corporation include the name of the corporation, the number of authorized shares, the names and addresses of the incorporators, and the purpose of the corporation.

Also Read

How to Save Money While Forming Your Virginia Corporation

One of the most effective ways to save money when forming a Virginia corporation is to do thorough research and educate yourself on the process. There are numerous resources available online, including guidance from the Virginia State Corporation Commission (SCC), that can help you understand the steps involved in incorporating a business. By taking the time to learn about the requirements and procedures, you can avoid costly mistakes and expedite the process, ultimately saving yourself time and money.

Another way to save money when forming a Virginia corporation is to consider using a registered agent service. A registered agent is required for all Virginia corporations, and hiring a third-party service to fulfill this role can be more cost-effective than designating an individual within your company. Registered agent services typically have flat fees or low annual costs, which can save you money in the long run compared to paying an employee to handle this responsibility.

Additionally, when choosing a business entity type for your Virginia corporation, consider the long-term implications for your finances. While a limited liability company (LLC) may seem like a more cost-effective option due to its simplified management structure and tax benefits, it’s important to consider the potential for growth and expansion. In some cases, forming a traditional C corporation may be more beneficial in the long run, as it allows for an unlimited number of shareholders and potential growth opportunities.

When it comes to registering your Virginia corporation with the SCC, be sure to explore all available options for filing your formation documents. While hiring an attorney to assist with the process may be necessary in certain cases, there are also DIY options available that can save you money on legal fees. Online filing services offer affordable rates and step-by-step guidance for submitting your paperwork, making it easier and more cost-effective to establish your corporation.

Furthermore, don’t forget to carefully review all fees associated with forming your Virginia corporation. The SCC charges various filing fees for incorporation, annual reports, and other services, so be sure to budget accordingly and avoid any unnecessary expenses. By planning ahead and understanding the costs involved, you can better manage your finances and save money during the formation process.

In conclusion, forming a Virginia corporation doesn’t have to break the bank. By educating yourself on the process, considering alternative options for services, choosing the right business entity type, and carefully reviewing fees, you can save money while establishing a solid foundation for your business. With careful planning and attention to detail, you can navigate the process of forming a Virginia corporation without compromising your budget or the quality of your business structure.

Conclusion

Starting a corporation in Virginia involves several critical steps, from choosing a corporate name to fulfilling ongoing compliance requirements. Following the steps outlined in this guide and seeking professional advice when needed, you can successfully establish your Virginia corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

Leave a Comment