A Virginia LLC operating agreement serves as a legal contract between the members of an LLC. Your operating agreement determines internal business operations in a way that satisfies all business owners’ preferences and needs.
Your operating agreement will confirm what would happen if someone wants to leave the company and how individual members will share profits. What’s more, it provides guidelines for resolving financial disputes. After each member signs the proposed agreement, they can store it in their records and use it as the company’s framework.
Is an LLC Operating Agreement Required in Virginia?
No, the state of Virginia doesn’t require an LLC operating agreement. However, creating one can clarify the intentions, governing procedures, and business processes for the LLC to follow.
The Virginia Limited Liability Company Act (Title 13.1, Chapter 12) guides the operation of LLCs. It covers general provisions, formation, and the relationship of an LLC and its members to third parties. Without an operating agreement, your LLC will abide by these provisions.
If you create an operating agreement, you have more say over how your business conducts itself. § 13.1-1023 reviews specific aspects of the creation of operating agreements, including:
- Adoption and amendments
Costs and Fees
The costs and fees for starting and maintaining an LLC in Virginia are relatively affordable:
- Domestic and foreign filing fee: $100
- Name reservation fee: $10
- Annual registration fee: $50
How to Form an LLC in Virginia
You can form an LLC in Virginia by following these steps:
Step 1 – Find a Unique Company Name
The State Corporation Commission website provides a name search function. This tool will ensure you choose a name for your LLC that no one else already has. Identifying a domain that matches a potential business name is also necessary.
Choosing a domain name that matches as close as possible to your company name will help you establish a uniform corporate identity.
Step 2 – Confirm Your Potential Names Meet Requirements
Adhere to these Virginia state guidelines when choosing a business name:
- Add “LLC” to your name. According to Virginia state guidelines, your company name must include LLC, L.L.C., or the words “limited liability corporation” in your business name.
- Do not imitate government agencies. For instance, your LLC name may not include words such as Treasury, FBI, State Department, or any other word that may mistake your entity for a federal, state, or local organization.
- Follow professional naming guidelines. For instance, additional legislation applies to forming an LLC as a banking company, a doctor’s office, a law firm, or an educational institution.
- Do not copy another name. Your name must not resemble too closely to another entity that already exists and operates.
Step 3 – Choose a Registered Agent
A registered agent agrees to receive all legal correspondence on your business’s behalf.
The person you choose as your registered agent doesn’t have to be one of your LLC members. Any person willing to perform the job and provide their commercial or residential address to you qualifies as your registered agent.
Note that a registered agent must have a physical address, not a P.O. box.
Step 4 – File Your LLC Formation Papers
Ensure you have the following information handy when you fill out your Virginia LLC formation papers:
- A physical business address (no P.O. Box)
- Names of your LLC members
- Your official name and primary place of business
- Effective LLC formation date
- Your employer identification number (EIN)
- Organizer signature
- Indication of the primary industry
- The relevant industry code
Step 5 – Write an Operating Agreement
Even though an operating agreement is optional, having one can help you document procedures for running your company. You and your members can refer to these guidelines if you ever encounter something you’re unsure how to handle.
Step 6 – Get an EIN
The IRS will assign you an Employer Identification Number (EIN) when you apply for one online. The process is entirely free.
Once you obtain this number, you can pay your employees properly, file your business taxes, and open a separate bank account for your company.
Step 7 – Pay the Annual Registration Fee
Unlike most states, Virginia doesn’t require you to submit an annual report to update your LLC’s business information. Instead, you only have to pay a $50 yearly registration fee.
This fee is due on the last day of the month you formed your LLC. For example, if you formed your LLC on January 19, your annual registration fee will be due on January 31 of each year.