Create an LLC in Virginia to Protect Business Owners

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, entrepreneurship also brings a long more risk which is why many shy away from it. The good thing is that the Virginia laws allow you to create an LLC in Virginia as a method of reducing a lot of the risk of running a 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 Limited Liability Company Act is proof of a well thought through statute for encouraging and protecting business owners. The biggest benefit under this law is personal liability protection for owners but if you look at it more closely you will see other advantages as well.

OBTAIN LIABILITY PROTECTION WHEN YOU CREATE AN LLC IN VIRGINIA

The Va LLC is first and foremost about protection. If you run a business without the benefit of a limited liability entity, you are a sole proprietor. Sole proprietor businesses are very risky because everything that the owner owns or may acquire in the future can be lost due to business related problems and liabilities. It is a huge risk.

You see by definition, running a business will create potential risks for liability and disputes. This is because you will be required to interact with other people and businesses. Examples include the need to hire service professionals, contractors or possibly employees. Also, you will be doing business with suppliers, partners or may need to work with a bank for capital.

Every interaction you have with someone or some business create the potential for a later claim related to that activity. Prior to the option of operating under a Va LLC, a business owner only had the option of using a corporation to manage this risk. Many opted not to use incorporation because of the complexity and set of rules mandatorily imposed on corporations.

But, when the Virginia Limited Liability Company Act was passed, entrepreneurs finally received a workable solution. When you create an LLC in Virginia, this Act prevents you and other owners from being personally liable merely because you are owners. So, with this passage, there really is no need to run as a sole proprietor.

The success of the Va LLC is evident by looking at the number of formations that have taken place. The limited liability company is now the entity of choice for Virginia small business not only because of its protection but because of other attractive features.

OTHER BENEFITS OF A VA LLC INCLUDE FLEXIBILITY AND SIMPLE GOVERNANCE

Another objective of the Virginia LLC lawmaking process was not to burden business owners with any unnecessary or complex legal compliance matters. As a result, the Va LLC does not have associated with it, the kind of legal mandates that come with a corporation. No board of directors, annual meetings or annual informational filings are required.

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.

Basically, the way the LLC laws work allow a company to operate the way it wants or needs to be managed without having to fit into any irrelevant legal structures.

FILING AND REGISTRATION FEES ARE MINIMAL

Currently, it only costs $100 to create an LLC in Virginia. There may be other fees if you need expedited processing. After formation, the current registration fee is only $50 a year. As you can see, the fees are so low. Given that this entity can save you from losing your home, your savings and anything else you own, it is clear that it is a small price to gain significant protections and other benefits.

OTHER BENEFITS OF A VA LLC

When starting a business in Virginia, a Virginia LLC can help in other areas as well. For one, it provides an official and trustworthy image for your new business which makes getting customers easier. Customers view legal entity businesses as more credible and professional.

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.

In summary, those who choose to create an LLC in Virginia are making a smart move that will not only allow their businesses to be more profitable and more successful but will provide more protection which reduces the risk of ever losing what you work so hard for due to potential business problems.