The new Virginia laws are causing some independent contractors to rethink whether they want to go through the “hassle and expense” of even being an independent contractor. Well, the answer is YES, it is worth being your own boss, and you can do this yourself with a little help.
Look, Argent Place Law does set up many new businesses every month for clients. But we don’t want you to give up being your own boss because of the cost of hiring a lawyer. The overview of what we do for clients is on our New Business Formation page, but in this blog post we give you all the details so you can do it yourself!
(Why would we do this? Simple: We’re more interested in your success than we are in getting a few shekels from you..besides, all of this is public information. Of course if you decide to hire us to do it for you so you can save your time and feel more confident about the steps being done properly, we’d be honored to serve you.)
What you need to do to start your own LLC
Hang in there, this may seem daunting, but you can do this. Let’s get started…
Check Name Availability In The State And With The US Trademark Office
You don’t want to start your company, market its name for a while, then get a letter from a lawyer telling you to change the name because the cute moniker you chose infringes someone else. Check both the US Trademark office and the state, but DON’T form the LLC yet! You definitely need to make sure the name you want is available in the state. If the Trademark Office site (given below) seems intimidating and you want to skip the check on the national level, then just pick a company name that includes your own name/initials and your street name, like JWJohnson on Main. That’s more likely to get you something unique at the national level (but not guaranteed, for example JWSmith was taken until that one recently expired).
This page is a general resource page for new businesses in Virginia: https://www.scc.virginia.gov/pages/New-Business-Resources
You can go directly to the Virginia name check here: https://cis.scc.virginia.gov
For the federal trademark search you must start here: https://www.uspto.gov/trademarks/search
Obtain EIN From The IRS
Start here and read the requirements, then click the button to apply now:
Or just go directly to the application form:
Rarely but occasionally a problem will arise at this step for a variety of reasons–that’s why we didn’t want you to form the company yet in the previous step. Take a deep breath and either (1) call a lawyer (Argent Place Law, for example?) to finish this whole process for you, or (2) just pick a different company name and try again.
File Articles Of Organization With The State
This is where you actually form the company–give birth to it metaphorically–and it’s the only place in this process where you actually must pay some money. It’s $100 for Virginia. But first you must establish an account with the Virginia State Corporation Commission:
Go to https://cis.scc.virginia.gov and click on “Register,” or just go to this page directly: https://cis.scc.virginia.gov/Account/Register
Once you have created an account, log in, then click on “Online Services,” then click on “New Businesses” and fill out the form to create a Limited Liability Company.
Note: You must enter a principal address and name a registered agent and registered address: You can be your own registered agent. For more info on what that is, read the blog and watch the video at: https://www.argentplacelaw.com/2017/10/what-is-a-registered-agent/
The addresses you enter will be publicly available. For those of you who want privacy, Argent Place Law can help, so just call us.
There’s no legal requirement to have a written Operating Agreement. Years ago we never even drafted one when we formed a single-member LLC. But now many banks ask to see your operating agreement. Look for another bank that doesn’t require it or call us and ask for a basic operating agreement. We’ll have to charge you a little bit, but I really don’t want you to use one from the typical online suppliers of legal documents. Call and ask us why….
Draft Initial Company Resolutions
We normally do this for clients. The main resolutions for a single member LLC will be the ones the bank will ask from you, and they will give you their own forms. While it is important to document major business decisions as a way to prove that the company is separate from you as an individual, you should not let this hold you up. Start making money and contact Argent Place Law later about your company’s governance record keeping.
Prepare Local Business License Form
In Virginia, a business “license” is merely a way for the local governments to know that you are operating within their jurisdiction so they can tax you. For most people who have been operating as a sole proprietor independent contractor, you probably won’t need any special license, but you still must file this form. (In fact you were supposed to have filed is an a sole proprietor, but…). Do an internet search for Your County business license. Some jurisdictions call it a “BPOL” for “Business, Professional and Occupational License.”
(Optional) File S-Corp election and Virginia Business Tax Registration Form (if Necessary)
Learn more about the benefits of being taxed at the federal level as an S-Corp (even though you are registered at the state as an LLC) here: https://www.argentplacelaw.com/2020/03/new-business-llc-s-corp/
If you do file the S-Corp election then you must also file a form with the Virginia Department of Taxation. You also might need to file this form if you sell goods or for other reasons, so check it out:
Go To The Bank
That’s it. Then take the documents you get from the State of Virginia and from the IRS to your bank and open a bank account in the name of your new company! How much money should you put in the account? See this blog post for some idea on that: https://www.argentplacelaw.com/2020/02/how-much-capital-should-i-contribute-to-my-new-business/
Start Making Money, and Call Us
No duh! And, we want to know if this blog post helped you.
Entrepreneurs are going to save the world, and Argent Place Law wants to help. That’s why we are a team of entrepreneur-lawyers serving Entrepreneurs just like you. Think how great it will be to have a legal team with entrepreneurial experience on your speed dial so you can call us up and say, “I need help starting up and growing my new business.” Call Argent Place Law to find out.