How to Start a Construction Company in Virginia | Essential Guide

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Virginia Construction Company

Starting a construction company in Virginia can be lucrative and rewarding for anyone with the right skills, resources, and determination. With a strong demand for quality construction services and a consistently growing population of 8,820,504 (2023 data), there is always room for new Limited Liability Companies to thrive in this industry. However, starting a construction company is a challenging task and requires careful planning, dedication, and hard work.

In this article, Webinarcare Editorial Team will discuss the necessary steps to Start a Construction Company in Virginia and provide valuable tips for ensuring your success in this competitive industry.

What is a Construction Company?

A construction company in Virginia is a business that specializes in the planning, design, and execution of construction projects. These projects can range from residential homes to commercial buildings and infrastructure projects such as roads, bridges, and utility systems. Virginia construction companies must adhere to local building codes, regulations, and licensing requirements to ensure their projects are safe, efficient, and compliant with state standards.

Virginia construction companies often offer various services, including general contracting, design-build, and specialized construction services. They collaborate with various stakeholders, such as architects, engineers, developers, and property owners, to bring projects to life. By employing skilled tradespeople, project managers, and other professionals, construction companies in Virginia work to deliver high-quality, durable structures that meet their client’s needs and contribute to their community’s development and growth.

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


How to Start a Construction Company in Virginia

To launch a construction business, you must follow the guidelines that include researching the construction industry, developing a business plan, registering your business, securing funding, purchasing equipment and material, hiring a skilled team, and marketing your construction company.

Step 1: Research the Construction Industry

Before diving into starting your construction company, it’s essential to understand the local construction industry in Virginia. Research your area’s market trends, major players, and potential competition. This will help you identify gaps in the market that your company can fill and allow you to make informed decisions about the types of services you want to offer.

Some key areas to research include:

  • Types of construction projects in demand (residential, commercial, etc.)
  • The average cost of construction projects in your area
  • Local building codes and regulations
  • Key stakeholders in the industry (architects, developers, etc.)
  • Licensing and certification requirements for contractors in Virginia

Step 2: Develop a Business Plan

A well-thought-out business plan is crucial for the success of any new business, including a construction company. Your business plan will act as a roadmap for your company’s growth and development, helping you make informed decisions and keep your business on track.

Some key elements to include in your construction company business plan are:

  • Company Overview: Describe your company’s mission, vision, and goals. Include the legal structure of your business (LLC, corporation, sole proprietorship, etc.) and your company’s name and location.
  • Market Analysis: Summarize your research on the local construction industry, including the target market, competition, and growth opportunities.
  • Services Offered: Clearly define the types of construction services your company will offer, such as general contracting, design-build, or specialized construction services.
  • Marketing and Sales Strategy: Outline how to attract and retain clients and your strategies for generating leads and closing sales.
  • Management and Organization: Detail the roles and responsibilities of your management team and any key personnel you plan to hire.
  • Financial Projections: Provide a realistic estimate of your company’s financial performance over the next few years, including projected income, expenses, and profits.

Step 3: Choose a Business Name

Selecting a name for your Virginia construction company is essential to forming. Your business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Virginia Business Name Search for you to have a proper Virginia construction business name. 

In Virginia, if you do not wish to file your construction business company right away but want to hold the name that you have decided on, then you can reserve your Virginia construction business name for 120 days. You must file a name reservation application with the Virginia Secretary of State to keep the name. 

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for Virginia DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in three methods, online, by mail, and in person filing.

However, before filing a DBA, you should know that you need to renew your DBA every Indefinite, which costs $10.

You can check the availability of your desired business name by searching the Virginia State Corporation Commission Entity Search ‘s website.

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Step 4: Register Your Construction Company

Register your business with the appropriate government agencies before officially starting your construction company in Virginia and obtain any necessary licenses and permits. 

Hire a Registered Agent

A Registered Agent is a person or entity responsible for receiving legal documents and official notices for your construction business. The qualifications of a Registered Agent vary depending on the jurisdiction, but generally, they must meet the following criteria:

  • Age: The Registered Agent must be at least 18 years old.
  • Residency: The Registered Agent must reside where the company is registered or authorized to do business in that state. In some jurisdictions, a domestic corporation or limited liability company (LLC) can act as its Registered Agent if it has a physical address in Virginia.
  • Physical Address: The Registered Agent must have a physical street address, not just a post office box, where the company is registered. This is where they will receive official correspondence and legal documents on behalf of the company.
  • Availability: The Registered Agent must be available during normal business hours (9 a.m. to 5 p.m., Monday through Friday) to receive and sign official correspondence and legal documents.
  • Good Standing: If the Registered Agent is a business entity, it must be in good standing with the state and not be in default, suspended, or revoked.
  • Compliance: The Registered Agent should know Virginia requirements and deadlines for the company, such as Annual Reports and Virginia franchise tax filings, and ensure that the company stays compliant. 

You can serve as your Registered Agent, appoint a friend or family member, or hire a Professional Virginia Registered Agent Services.

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File For Articles of Organization or Articles of Incorporation

If you form an LLC for your construction company, you must file the Virginia Articles of Organization, which costs $100. However, you must file the Articles of Incorporation if you form Virginia Corporation for your construction company. The Articles of Incorporation filing fee costs $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

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Create an Operating Agreement

Operating Agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in Virginia is optional. Yet, having one as an internal document is strongly advised. 

Recommended: Creating an Operating Agreement is like having a personal legal guide at hand; it’s efficient, thorough, and ensures the smooth and compliant operation of your business. With LegalZoom’s operating agreement, it will protect your rights as an owner, keeping misunderstandings at bay and your business on the path to success. That’s why we recommend using –

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Obtain an Employer Identification Number

You must first obtain Virginia Employer identification number (EIN) from the IRS if you will open a bank account or hire an employee for your Virginia construction company. 

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 the 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.

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

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Step 5: Obtain the Necessary Licenses and Permits

Starting a construction company in Virginia requires several licenses and permits. Some of the most common licenses and permits you’ll need include the following:

  • Business License: Your local city or county government may require Virginia Business License. The business license fee in Virginia ranges from $50 – $300.
  • Contractor’s License: A contractor’s license is required in most states for construction businesses that perform specific types of work, such as general contracting, electrical, plumbing, HVAC, or other specialized trades. Requirements for obtaining a contractor’s license may include passing an exam, providing proof of experience, and obtaining bonding and insurance.
  • Building Permits: Construction projects typically require permits issued by the Virginia building department. Building permits ensure the construction project complies with local building codes and regulations.
  • Occupational Licenses: Some states may require occupational licenses for specific types of work, such as asbestos abatement, lead paint removal, or the installation of fire protection systems. Check with your state’s licensing board to determine if any special licenses are required for the work your construction company will perform.
  • Virginia Sales Tax Permit: A sales tax permit from the Virginia Department of Taxation allows you to collect sales tax. Currently, the Virginia sales tax rate is 4.30%.
  • Environmental Permits: Depending on the nature of your construction projects, you may need to obtain environmental permits, such as stormwater discharge or air quality permits.

Step 6: Secure Funding

Starting a construction company requires significant capital to cover equipment, materials, and labor costs. To secure funding for your Virginia business, you must explore various financing options and determine the best fit for your needs.

When seeking funding, be prepared to present your business plan and financial projections to potential lenders or investors. This will demonstrate your commitment to your company’s success and help build their confidence in your ability to repay the loan or generate a return on their investment.

However, consider applying for your construction company’s Virginia Small Business Loans.

Step 7: Purchase Equipment and Materials

Once you have secured funding for your Virginia construction company, you must purchase the necessary equipment and materials to begin operations. This may include items such as:

  • Construction vehicles (trucks, excavators, etc.)
  • Power tools and hand tools
  • Safety equipment (hard hats, safety goggles, etc.)
  • Building materials (lumber, concrete, etc.)
  • Office equipment and supplies (computers, printers, etc.)

Invest in high-quality equipment and materials, as this will help you deliver exceptional results to your clients and build a strong reputation in the industry. Consider purchasing insurance for your equipment, as this can help protect your investment in the case of theft, damage, or accidents.

Step 8: Hire a Skilled Team

Your Virginia construction company’s success will largely depend on your team’s skills and expertise. Hire individuals with experience and knowledge in the construction industry to build a strong workforce. This may include:

  • Project managers
  • Construction laborers
  • Skilled tradespeople (electricians, plumbers, etc.)
  • Architects or engineers
  • Administrative staff (accountants, receptionists, etc.)

In addition to hiring qualified employees, invest in ongoing training and development programs to help your team stay current on industry trends, technologies, and best practices. This will improve the quality of your services and help you attract and retain top talent in the competitive construction industry.

Step 9: Market Your Construction Company

You must develop a comprehensive marketing strategy to attract clients and grow your Virginia construction company. This may include building a professional website that showcases your services, portfolio, and testimonials from satisfied clients; creating and distributing print materials, such as brochures, business cards, and direct mail advertisements; networking with industry professionals, such as architects, developers, and real estate agents, to generate leads and referrals, and utilizing social media and digital marketing strategies to reach a wider audience and drive traffic to your website.

By consistently promoting your Virginia construction company and showcasing your expertise and quality work, you can build a strong reputation in the Virginia construction industry and attract a steady stream of new clients.

Benefits of Forming a Construction Company

Forming a Construction LLC is best for a start-up company since it offers the following advantages.

Limited Liability Protection

LLC provides limited liability protection to its owners, also known as members. This means that the personal assets of the LLC members are separate from the company’s debts and liabilities. In the construction industry, where accidents, property damage, and contractual disputes occur, limited liability protection is crucial to protect business owners’ assets.

Pass-through Taxation

An LLC typically offers pass-through taxation, meaning the company’s profits and losses are reported on the owner’s tax returns. This avoids the double taxation corporations may face, where the company and its shareholders are taxed separately. Pass-through taxation can lead to potential tax savings for the Virginia construction company’s owners.

Flexibility in Management

LLCs have a more flexible management structure than corporations. They do not require a board of directors, and the owners can choose how to manage the company through member or manager management. This flexibility allows Virginia construction companies to adapt their management structure as needed.

Simpler Record-Keeping and Compliance

LLCs still require formalities; they typically have fewer record-keeping and reporting requirements than corporations. This can save time and resources for Virginia construction companies, allowing them to focus on their core business operations.


Forming an LLC can provide the Virginia construction company with increased credibility and professionalism in the eyes of clients, vendors, and financial institutions. This can be beneficial in securing contracts and building a positive reputation in the industry.


What are the licensing requirements for starting a construction company in Virginia?
In Virginia, any entity engaged in the construction business must be licensed by the Virginia Board for Contractors.
How does one go about obtaining a Virginia contractor’s license?
Applicants for a Virginia contractor’s license must pass a business and law exam.
What does a Virginia contractor’s license allow you to do?
A Virginia contractor’s license allows you to bid on construction contracts, manage construction projects, and perform various types of construction work.
Are there different types of Virginia contractor’s licenses?
Yes, Virginia contractor’s licenses are classified according to the type of work the licensee is permitted to perform.
What types of work does a Class A Virginia contractor’s license allow?
A Class A Virginia contractor’s license allows the licensee to perform work on any sized construction project and to work on all types of building construction.
Are there any financial requirements for obtaining a Virginia contractor’s license?
Yes, Virginia contractor’s licenses have financial responsibility requirements, which vary depending on the licensee’s classification.
What is required to meet the financial responsibility requirements for a Virginia contractor’s license?
The financial responsibility requirements for a Virginia contractor’s license may be met through a surety bond, insurance policy, or other means.
How long does it take to obtain a Virginia contractor’s license?
The time it takes to obtain a Virginia contractor’s license depends on various factors, including the classification of the license being sought.
Can I obtain a Virginia contractor’s license if I am not a resident of Virginia?
Yes, but you will need to appoint a resident agent to represent you in the state.
Is a business license required to operate a construction company in Virginia?
Yes, construction companies operating in Virginia are required to obtain a business license from the state.
Are there any local licensing requirements for starting a construction company in Virginia?
Yes, some Virginia cities and counties have their own licensing requirements for construction companies.
Are construction companies in Virginia required to obtain any other permits or certifications?
Yes, construction companies may be required to obtain various permits and certifications at the local level in order to perform certain types of work.
Are there any environmental regulations that construction companies in Virginia must comply with?
Yes, construction companies must comply with a variety of state and federal environmental regulations in Virginia.
Are there any tax obligations associated with starting a construction company in Virginia?
Yes, construction companies in Virginia are required to register for and collect state sales and use tax on taxable goods and services.
Are construction companies in Virginia required to carry workers’ compensation insurance?
Yes, construction companies in Virginia must carry workers’ compensation insurance unless they meet certain requirements for exemption.
Are there bonding requirements for construction companies in Virginia?
Yes, some construction contracts in Virginia require the contractor to obtain a bond.
Can a construction company in Virginia bid on both public and private construction projects?
Yes, construction companies in Virginia may bid on both public and private projects, assuming they hold the necessary licenses and certifications.
Are there any restrictions on the types of businesses that can bid on Virginia construction contracts?
Virginia construction contracts are generally open to any business that holds the necessary licenses and certifications and meets other contract requirements.
Are there any training or educational requirements for starting a construction company in Virginia?
No formal training or education requirements exist for starting a construction company in Virginia, although relevant experience is important.
Are there any financial or performance guarantees required for Virginia construction contracts?
Yes, some Virginia construction contracts may require contractors to provide financial or performance guarantees, such as payment bonds or performance bonds.
Can a Virginia construction company also obtain a federal contractor’s license?
Yes, Virginia construction companies may also obtain a federal contractor’s license in order to bid on federal construction contracts.
Can a Virginia construction company work on projects in other states?
Yes, Virginia construction companies may work on projects in other states, assuming they hold the necessary licenses and certifications in those states.
How does a construction company in Virginia find work and projects to bid on?
Construction companies in Virginia may find work through various methods, such as networking, advertising, or responding to public bid requests.
Are there any resources available to help Virginia construction startups get off the ground?
Yes, various Virginia government agencies provide resources and assistance to new construction companies, such as the Virginia Department of Small Business and Supplier Diversity.
Are there any organizations or associations that Virginia construction companies can join for support and resources?
Yes, Virginia construction companies may join various professional organizations and associations, such as the Associated General Contractors of Virginia or the Virginia Society of Professional Engineers.
Are there any grant programs or funding opportunities for Virginia construction startups?
Yes, Virginia construction startups may be eligible for certain small business grant programs or other funding opportunities.
What are the requirements for starting a construction company in Virginia?
To start a construction company in Virginia, you need to obtain a Class A, B, or C contractor’s license from the Virginia Department of Professional and Occupational Regulation.
How long does it take to get a contractor’s license in Virginia?
The time required to obtain a contractor’s license in Virginia varies, depending on the qualifications of the applicant and the type of license desired.
Do I need to pass an exam to get a contractor’s license in Virginia?
Yes, you need to pass a trade and a business law exam administered by the Commonwealth of Virginia.
Can I obtain a contractor’s license in Virginia if I have a criminal record?
It depends on the nature of the offense and how long ago it occurred. You may be required to provide documentation and go through a character review.
Do I need to have insurance coverage to obtain a contractor’s license in Virginia?
Yes, you must provide evidence of financial responsibility (liability and workers’ compensation insurance).
What is a Class A license in Virginia?
A Class A license in Virginia allows you to work on any size project, including projects over $120,000. This license requires a net worth of $45,000 and more and experience on projects worth $750,000 or more.
What is a Class B license in Virginia?
A Class B license in Virginia allows you to work on projects up to $7,500,000. This license requires a net worth of $15,000 and more, and experience on projects worth $1,500,000 or more but less than $7,500,000.
What is a Class C license in Virginia?
A Class C license in Virginia allows you to work on projects up to $120,000. This license requires a net worth of $1,000 and more, and experience on projects worth $1,000 or more but less than $120,000.
What is the cost of obtaining a contractor’s license in Virginia?
The cost varies; for example, the license fee for a Class A license is $385.
Is there an exam fee for the contractor’s license exam in Virginia?
Yes, the current exam fee for both the trade and business law exams is $85 for the initial application and a $40 fee to reschedule the exam.
How do I obtain the application to get a contractor’s license in Virginia?
Applications can be obtained from the Department of Professional and Occupational Regulation.
How often must I renew my contractor’s license in Virginia?
Contractor licenses must be renewed every two years.
What is the minimum age requirement to obtain a contractor’s license in Virginia?
Ordinary circumstances require you to be at least 18 years old to obtain a contractor’s license, except Culinary service registration requires age 16 and Apprentice registration age 17.
Can an out-of-state contractor work in Virginia without a Virginia license?
Yes, out-of-state contractors can work in Virginia without a Virginia contractor’s license if declared ‘Government procurement plans’.
Can I apply for a license while my supporting documents are still being processed?
You can apply for a contractor’s license while your supporting documents are being processed; provisional qualifications are based on certain conditions.
What are the different insurance requirements for each class of Virginia contractor’s license?
Working in Virginia may require liability insurance for Class B and C contractors and liability and workers’ compensation insurance for Class A contractors.
What is the VA SWAM certification?
SWaM stands for Small, Women-owned, or Minority-owned Business, and certification ensures that you get opportunities for state contracts and help in competing better in the marketplace.
Is Virginia contractor ombudsman’s services available for everyone?
Yes, the service provides ombudsman free of charge to Virginia state licensed contractors to help ease any disputes between license holders and administering agencies.
Can I use a Class C license to bid on contracts available for Class A or B licensed contractors?
Yes, you can, but be mindful of the risks, rewards and the mechanisms towards targeting such value-chain available for different classes.
Is it mandatory to have a registered agent to form a construction company in Virginia?
Yes, it is mandatory to appoint/ have a registered agent/ registered office when you intend registered as an LLC, Corporation, Limited Partnership in Virginia.
Can I perform handy work services on residential properties without obtaining a Virginia contractor’s license?
Services like independent and specialized contract handy work, fix and repair services on existing plumbing/electrical appliance works on one or two residential structures are available or licensed being necessary.
How long does it take to get my application for a contractor’s license processed by the Commonwealth of Virginia?
It can take up to thirty days to receive a decision on your application and supporting documentation.
Do I need to file any other forms to form my company once I get my Virginia contractor’s license?
You will need to file additional formation documents with the Virginia State Corporation Commission once you have received your contractor’s license.
Can financing companies help me obtain a Virginia contractor’s license?
Yes, financing companies can help you obtain a contractor’s license by providing you with funding to start your business and meeting variable compliance requirements.
How long does the Commonwealth of Virginia require that my business be active before awarding me a contractor’s license?
You must provide proof of business and essential standing continuously working on and holding an active status for your construction entity for not less than a year.
Is there regulation and audit commitment for keeping records on public projects involving a contractor in Virginia?
Yes, Public Contractors must maintain and certify payroll records and require Compliance as applicable, as stated in Chapter 6 of the Virginia Department of Financial Regulation.
Can I see if a Virginia contractor’s license is current and in good standing online?
Yes, regulatory bodies in Virginia provide license verification allowing verification of contractor’s statuses, classes, expiration, professional standing, skills and qualifications being updated in real-time.
Are apprenticeships allowed and available leading to obtaining a Virginia contractor’s license?
Yes, a Virginia registered apprenticeship of three or more years of legal contracting work for a legitimate repute has allowances towards certification and different contractors’ qualification.
If a legal representative from the Commonwealth of Virginia denies my contractor’s license application, will I be eligible to apply again?
You have multiple case filing abilities available, i.e. voting rights, claims submission, appeals from denial decision for your license applications, sometimes prioritist or investigative subject of review.

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Starting a construction company in Virginia can be challenging yet rewarding for those prepared to invest the time, effort, and resources necessary for success. By following the steps outlined in this article and dedicating yourself to providing exceptional service and quality work, you can create a thriving construction business that stands out in the competitive Virginia market.

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