How to Start a Limited Liability Partnership in Virginia | 2024 Guide


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Start a Limited Liability Partnership in Virginia

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Virginia. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Virginia, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Virginia LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Virginia, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Virginia General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in Virginia

To form a limited liability partnership in Virginia, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Registered Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Virginia, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Virginia business registry. Ensure that your chosen name follows Virginia naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Virginia Secretary of State if desired.

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

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Virginia Secretary of State business name database and Virginia Business Name Search. 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 LLP 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 the Virginia Secretary of State.

You can check out how to file a DBA in Virginia for clearer understanding.

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Step 3: Designate a Registered Agent

In Virginia, you’ll need to designate a Registered Agent for your LLP. The Registered Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Virginia Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet Virginia requirements.

However, If you plan to become a Registered Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Virginia Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Virginia Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Virginia laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Virginia. The default laws in Virginia might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Virginia Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN 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.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Virginia Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Virginia.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Virginia LLP. Additionally, obtain the necessary Virginia Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Virginia to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the Virginia Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Virginia, and local levels.

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Advantages of Forming a Limited Liability Partnership in Virginia

While the specific advantages of forming an LLP in Virginia can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Virginia:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Virginia.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Virginia may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Virginia.

Cost of Forming an LLP in Virginia

The cost of forming an LLP in Virginia may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Virginia Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Virginia instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership?
A limited liability partnership is a business structure that limits the liability of its partners.
Can I form a limited liability partnership in Virginia?
Yes, you can form a limited liability partnership in Virginia.
How do I form a limited liability partnership in Virginia?
In Virginia, you can form a limited liability partnership by filing a certificate of partnership with the State Corporation Commission.
What are the requirements for forming a limited liability partnership in Virginia?
To form a limited liability partnership in Virginia, you need to have at least two partners and file a certificate of partnership with the State Corporation Commission.
Are there any annual filing requirements for a Virginia limited liability partnership?
Yes, a Virginia limited liability partnership must file an annual report with the State Corporation Commission.
Can a Virginia limited liability partnership be taxed like a corporation?
No, a Virginia limited liability partnership is not taxed like a corporation.
What is the liability of each partner in a Virginia limited liability partnership?
In a Virginia limited liability partnership, each partner’s liability is limited to the amount of their investment in the partnership.
Can a Virginia limited liability partnership be managed by a board of directors?
No, a Virginia limited liability partnership is managed by its partners.
Can a Virginia limited liability partnership have employees?
Yes, a Virginia limited liability partnership can have employees.
Can a Virginia limited liability partnership own property?
Yes, a Virginia limited liability partnership can own property.
What is the difference between a Virginia limited liability partnership and a Virginia limited liability company?
A Virginia limited liability partnership is a partnership structure, while a Virginia limited liability company is a separate legal entity.
Can I convert my Virginia limited liability partnership to a Virginia limited liability company?
Yes, you can convert your Virginia limited liability partnership to a Virginia limited liability company.
Is a Virginia limited liability partnership required to have a business license?
Yes, a Virginia limited liability partnership is required to have a business license.
What types of businesses are well-suited for a Virginia limited liability partnership?
Professional services businesses, including law firms and accounting firms, are well-suited for a Virginia limited liability partnership.
How much does it cost to form a limited liability partnership in Virginia?
The filing fee to form a limited liability partnership in Virginia is $100.
Does a Virginia limited liability partnership require a registered agent?
Yes, a Virginia limited liability partnership is required to have a registered agent.
Can a Virginia limited liability partnership have foreign partners?
Yes, a Virginia limited liability partnership can have foreign partners.
How do I add another partner to my Virginia limited liability partnership?
To add another partner to your Virginia limited liability partnership, you need to file an amendment to your certificate of partnership with the State Corporation Commission.
Can a Virginia limited liability partnership distribute profits to its partners?
Yes, a Virginia limited liability partnership can distribute profits to its partners.
Can a Virginia limited liability partnership dissolve voluntarily?
Yes, a Virginia limited liability partnership can dissolve voluntarily.
Can a Virginia limited liability partnership be dissolved involuntarily?
Yes, a Virginia limited liability partnership can be dissolved involuntarily in certain circumstances.
What is the process for dissolving a Virginia limited liability partnership?
To dissolve a Virginia limited liability partnership, you must file a certificate of cancellation with the State Corporation Commission.
What is the duration of a Virginia limited liability partnership?
A Virginia limited liability partnership can be either perpetual or for a specific term, as determined in the partnership agreement.
Can a Virginia limited liability partnership change its business purpose?
Yes, a Virginia limited liability partnership can change its business purpose.
Is the name of a Virginia limited liability partnership important?
Yes, the name of a Virginia limited liability partnership must comply with state laws and regulations.
Can I reserve a business name for my Virginia limited liability partnership prior to filing for registration?
Yes, you can reserve a business name for your Virginia limited liability partnership prior to filing for registration.
Can I change the name of my Virginia limited liability partnership after registration?
Yes, you can change the name of your Virginia limited liability partnership, but you must file an amendment to your certificate of partnership with the State Corporation Commission.
What happens to the assets of a Virginia limited liability partnership upon dissolution?
After the dissolution of a Virginia limited liability partnership, the assets must be distributed in accordance with the partnership agreement. If there is no partnership agreement, the assets are distributed in accordance with state law.
What is a Limited Liability Partnership in Virginia?
A Limited Liability Partnership in Virginia is a business entity that falls between a general partnership and a corporation.
What are the advantages of having a Limited Liability Partnership in Virginia?
The Limited Liability Partnership structure of a business in Virginia can provide personal liability protection to partners and retain flexibility in management.
How do I choose a name for my Limited Liability Partnership in Virginia?
The name of your Limited Liability Partnership in Virginia must be distinguishable and available for use.
Do I need to register my Limited Liability Partnership in Virginia?
Yes. Similar to other entities, you must register your Limited Liability Partnership in Virginia.
What is Virginia’s Limited Liability Partnership Act?
The law that codified rules and clauses that apply to Limited Liability Partnership in Virginia with protecting the public from fraudulent beings.
How many partners are required for a Limited Liability Partnership formation in Virginia?
At least two or more partners required for a Limited Liability Partnership formation in Virginia.
Can a Limited Liability Partnership in Virginia have one general partner?
No, Virginia does not permit a Limited Liability Partnership in Virginia to have one general partner.
Are Limited Liability Partnerships allowed to be taxed differently in Virginia?
Yes, as partnerships, Virginia revised Uniform Partnership Act(typo required) profits passed through to members’ personal tax climes.
Who owns shares in a limited liability partnership in Virginia?
Virginia does not permit a Limited Liability Partnership in Virginia to issue shares of stocks as you find with corporations.
Besides state registration, what other permits/licenses do I need for my Limited Liability Partnership in Virginia?
That depends on the industry or profession of your Limited Liability Partnership in Virginia.
How much does it cost to register a Limited Liability Partnership in Virginia?
The state fee as per the Virginia State Corporation Commission is $5 upon organization and $50 per year for Virginia companies.
Does my Limited Liability Partnership need an operating agreement in Virginia?
No, although it is advisable to build a Limited Liability Partnership with an operating agreement, Virginia state law does not require it.
Where can I register a Limited Liability Partnership in Virginia?
Registered either in the State Corporation Commission or reach applications of SCC via Website(Address to access from the integrated database).
How long does it take to register a Limited Liability Partnership in Virginia?
An Investment Will state on the same of designation within around 7-10 working days.
Does Virginia provide any support for businesses registering a Limited Liability Partnership?
Virginia has Venture and Resources, including Internet compliance help, to give businesses towards starting a Limited Liability Partnership.
Can a Virginia-based Limited Liability Partnership be registered in another state?
Definitely yes, and Equally, Limited Liability Partnerships based in other jurisdictions/countries can transact business in Virginia.
Can a Virginia-based Limited Liability Partnership change to another business entity structure?
Yes, Virginia legally allows businesses to merge to transfer to an acceptable taxation entity.
When will Virginia’s Limited Liability Partnership Law expire?
Similar to other LLC state rules, as an enabling statute, permanent, until changed, amended, repealed by a legislature.
How does a Virginia Limited Liability Partnership differ from an LLC?
An organizing partnership agreement significantly empowers Limited Liability Partnerships, The Act core various individuals and industries to form which is contrasted businesses while maintaining flexible business management, Such as SMLLC.
How long does a Limited Liability Partnership in Virginia run?
Absent specific termination, a Limited Liability Partnership In Virginia operating agreement expires at the end of regulatory consumer debt/working in the lifespan.
Are all Limited Liability Partnership profits are allotted to Virginia partners, or can they be maintained in the entity to grow /manage capital before disbursals are built?
All Virginia LLP profits necessarily-pass indemnify forward even when recognized Virginia corporate state taxes unless beneficial necessity permits optional apportionment towards re-invest + accrue gain.
How do I dissolve my Virginia Limited Liability Partnership?
Partnership entities could need recovery must records, finally itself – obtain either binding consent.
Can banks suffer Limited Liability Partnership concepts/products in Virginia?
Yes, Yes, owning more extreme susceptibility towards limited liability offerings being incorporated Virginia partnership productivity.
How do I qualify for pass-through tax treatment with Virginia Limited Liability Partnership?
Similar to different capitalism states within the US, foreign firms duly base taxing procedures commonly include obligating Virginia estimate accost regular filings of Different income-returning Forms while Partnership loss writing-partners included in the Other State RSE purposes notified shares of gain under Vapca.
How different scenarios where I have to make changes to the Virginia Limited Liability Partnership’s Certificate of Registration?
Virginia Limited Liability Partnership like different knowledge organization amends altering true name, registered capital, resident curtness off even attorney or new registered counsel(new decisions and documents) assimilations unique dealings.
Based on my location that is different from that of Virginia, must I operate without a commercial/registered office?
No, you have to define a suggested documented event-counterproductive with representative cooperation residency correspondent or submitted authorized trustees secretary or operators holding physical address within days subsequent forming Virginia-pitched campaign attachee with management as contained in Virginia Law 13(l) 21(A)(curse style preceding mission-agreements (propositions).
What are the most specific decision-making procedural frameworks crucial for the limited liability partnership identification in Virginia?
Decision-making within business institutes around voter/partners’ appointed modalities under commercial/business filings sets of incorporated ultimate modaling business practices maintaining solidity.
How do I report my Limited Liability Partnership revenue to the state of Virginia?
Virginia Department of Taxatation makes filings and reports disburse-associated methods advised to maintaining returns on Partnership payments per Virginia law.
Can a Virginia-based LLP act outside of Virginia?
Yes, in LLC & Corporate has inherent flexibility in generally restricted agreements. In one head, accepting agents, conducting different business processes, while retaining & dissociating profits as owners, often freely traded entoutes called “transparent-pass” strategies conducive to Limited liabilities and liability insulation, thereby composing logistical non-contenders in regards to regulated execution.

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Conclusion

Starting an LLP in Virginia may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Virginia.

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