Saturday, February 27, 2010

Forming our salon’s parent LLC in Virginia

When my wife and I were preparing to start our business, we looked at all the different business structures. We decided to organize as a Limited Liability Company (LLC) due to the fewer requirements and the same limited liability as a corporation. It is important to note, however, that the Internal Revenue Service (IRS) treats us as a Partnership and all income is passed through to us as individuals. Thus, our LLC is a pass-through entity. Here is how simple it is to form an LLC in Virginia.

You will see websites, magazine articles, television commercials, and other advertisements wanting $100 to $150 or more to help you form an LLC. Keep in mind that this fee is in addition to the fees required to apply for your business with the State. I cannot speak for all states, but in the Commonwealth of Virginia, you are throwing your money away if you pay for this service.

The first thing I did was visit the website for the State Corporation Commission ( to confirm all of the requirements- which turned out to be fill out one simple, one-page form (LLC-1011) and mail it in with a check! The LLC-1011 is the Articles of Organization. The form is nothing elaborate, does not require a lawyer to complete and does not need to be notarized. The main things we had to have for the form were LLC name, registered agent, addresses, and one member of the LLC to sign it. The name of our LLC had to be distinguishable from any other LLC name in the Virginia database. We did a preliminary name search on the website above and then called the clerk’s office to confirm it was available. Once we confirmed our name was good, we continued with the rest of the form.

Next was registered agent. I will not go into the details of a registered agent, but basically it means someone to whom the State will send official notices and correspondence. I made myself the registered agent and used my home address since I deal with the administrative and financial matters for the business. The registered agent and address can be changed later if necessary. We also used our home address for the principal office address of the LLC. My wife signed the form as an organizer and we mailed it in along with the check for $100. Within a week we had confirmation our LLC had been formed. Too easy!

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