It is Advantegous to Create an LLC in Virginia

Starting a new business is exciting because it is not only a way to do something you love but is also a path to financial freedom. So, if you are thinking of starting one, you are on the right track.

However, there are some risks to starting a Virginia business. One effective way to significantly reduce those risks is to create an LLC in Virginia to operate you your business.

Virginia is a great state to start a business and it has been consistently fallen into the top 5 states for business in most of the publications and associations.  It is clear that Virginia lawmakers have always wanted to promote small business activity in the Commonwealth.

The Virginia laws that allow for a business to be operated through a Va LLC is a prime example of a business friendly law. Under this Act, business owners get personal liability protection which is so important in today's business world where lawsuits are out of control.  But, the laws go even further to offer other major benefits.

OBTAIN LIABILITY PROTECTION WHEN YOU CREATE AN LLC IN VIRGINIA

The most important feature of a Va LLC is that it creates a layer of protection shielding your personal assets from business liability and problems. Without the use of an entity like this, you would be running as a sole proprietorship.  It is generally considered a significant risk to run a business these days as a sole proprietor because of the many cases where owners have lost everything.  This can be avoided by the proper use of a limited liability entity.

It is close to impossible to run a business without giving rise to a potential for liability or problems in the future.  This is the result of having to enter into transactions and connect with other people and businesses.  You may hire employees which could later lead to an employment claim.  You may have a store where a customer could be injured.  You will have to do business with suppliers, partners, banks and government agencies.

Every time you connect or do a transaction with another party, the chances of a possible problem arising from that interaction arises. This is what creates potential for liability. Before the Va LLC was created in Virginia, most small business entrepreneurs took on the risk of liability because the costs and complexity of starting a corporation was too high.

With the enactment of the Virginia LLC laws, business owners finally got a real answer for managing their personal liability risk. After you create an LLC in Virginia, you are the owner of a separate legal entity and this structure prevents owners from being personally liable for business obligations.

If you look at the increasing number of LLC formations in Virginia throughout the past decade, you will see proof that this legal entity is succeeding in giving small business owners the necessary protection plus other advantages.

THE VA LLC IS SIMPLE TO RUN AND OFFERS FLEXBILITY

Another goal of Virginia lawmakers was not to burden entrepreneurs with unnecessary legal compliance requirements in order to operate under a Va LLC. So, this legal entity is different from a corporation in that there are no annual meeting requirements or a mandatory board of directors required to manage the business. Virginia does not even currently impose any annual informational reporting for an LLC.

Now, another benefit is that if a business requires some complex structuring to accommodate business ownership or other goals, the Virginia limited liability company is allowed to create its own ownership and management structure as it sees fit.

In summary, this flexibility allows for companies to be run and operated based on the requirements of the business as opposed to unnecessary or irrelevant legal structures.

MINIMAL REGISTRATION COSTS

Virginia has also agreed to keep filing and registration fees low for a Va LLC.   Presently, the filing fee is $100 for a standard filing.  You may need to pay a little more if you need expedited processing. Then, each year, the registration fee to keep the LLC active is only $50. As you can see, these costs are minimal compared to the huge protection benefits you get.  You protect you home, savings and other things you own from being lost due to business ownership with just a few hundred dollars.

THE VA LLC HAS OTHER ADVANTAGES

Another advantage of using a Va LLC for your company is that it will be easier to get customers.  This is because your business will be seen as more trustworthy and professional.  Statistics support the fact that the public is very paranoid about scam and fraudulent businesses and just by using an official business vehicle such as a limited liability company, you are separating out your business as more credible.

A business also opens itself up to paying less in taxes if it is run through a Va LLC.  The IRS gives the LLC the most tax choice structures than any other legal entity. You automatically qualify for the single layer of taxation which is the most popular preference because it avoids the double taxation of C corporations.  However, a Va limited liability company can elect a corporate tax structure as well. If in doubt, consult your accountant.

When you create an LLC in Virginia, you are making an important first step towards a successful business that will not only provide you with financial independence but also with protection and tax benefits.