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Basics
About the Limited Liability Company in Virginia
A Limited Liability Company in
Virginia, or LLC, may or may not be the best choice for
you if you are self-employed or starting a business.
Much depends on the volume of business you are
anticipating, and whether or not you are planning to run
the business yourself, or take on a partner or hire
employees, and/or raise investor capital by issuing
shares, membership units, and more. While there are few
reasons not to form some type of legal entity for your
business, there are many more reasons why you should –
and why a Limited Liability Company in Virginia may be
your best choice.
An All-Purpose Entity
A Limited Liability Company in Virginia is the most
flexible legal business entity even more so than a Sole
Proprietorship – but has the advantage of allowing you
to shield your personal assets from lawsuits and
creditors, should the business run into problems.
By creating a Limited Liability Company in Virginia, you
will be able to run your business in almost any way that
is suitable for you. You may operate similar to a Sole
Proprietor, but also take on other members as partners,
raise investment capital through the sale of LLC
membership units (analogous to the stock offered by
major corporations), form an employee-owned company, or
create some other type of structure.
If you are a writer, independent software engineer,
free-lance consultant or an entertainer with multiple
income streams and these streams add up to a substantial
amount, you may enjoy significant tax benefits by
running all of this income through a Limited Liability
Company in Virginia. If you need assistance, your
accountant or tax professional can advise you on this
matter.
A corporation on the other hand must operate within
fairly narrow parameters as defined by law.
Simplicity
If you value simplicity, or want to spend more time
running the business and less time filing forms, a
Limited Liability Company in Virginia is definitely the
way to go. Here’s what Nolo’s Guide to Starting and
Running a Small Business has to say on the subject:
"…the relative simplicity and flexibility
of the LLC make it the better choice. This
is especially true if your business will hold property,
such as real estate, that's likely
to increase in value."
Here’s a good way to look at it: forming a Limited
Liability Company in Virginia is generally a simple,
straight-forward process. Unlike an S or C Corporation,
there is no need to hold endless board meetings and keep
meticulous records of those meetings. Any profits made
by the Limited Liability Company in Virginia can be
distributed in any way the members decide is fair
(subject to some IRS limitations).
On the other hand, shares of corporations must by law be
distributed to shareholders based on the actual number
of shares they hold – not based on any material
contributions (i.e., “sweat equity”) they may have made.
By forming a Limited Liability Company in Virginia, you
stand to keep substantially more of what you earn.
Form an LLC
Ask a Question of Contact Virginia Business Formation
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