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Virginia is one of the best states to
operate a small business
Corporations:
Names: The corporate name must contain the word
"corporation," "incorporated," "company" or "limited"; or the
abbreviation "corp.," "inc.," "co." or "ltd." The name cannot
contain any word or phrase that indicates or implies that it is
organized for the purpose of
conducting
any business other than a business which it
is authorized to conduct. The name cannot be the same or
deceptively similar
to any active domestic or
foreign
corporation filed with the state.
Share
information:
the number of authorized shares must be listed on the articles of
incorporation. The charter fee and annual registration fee are
based on
the
number of shares.
For example, the fee for companies with less than 1
million
shares is $50 for every 25,000 shares. The fee for more than 1
million shares is 2,500. This fee is in addition to the
$25
filing fee.
Registered Agent:
All corporations must list the registered agent. A corporation may
not act as its own registered agent. The registered agent must have
a legal address in
Virginia.
PO Boxes and mailbox services similar to the UPS Store are not valid
addresses for Registered Agents
unless the town population is less than 2,000 or if no street
address or rural route and box number is associated with ht
registered office location.
Directors:
A
corporation must have at least one director. If the directors
are named in the Articles of Incorporation, the addresses of all
directors must be included in the Articles of
Incorporation.
Corporate Records: Corporate records must be kept, but no
location is specified.
Annual Statement:
Every corporation is required to file an annual report and pay
the annual registration fee with the Virginia State Corporation
Commission. Both the annual report and the registration fee are due
by the last day of the month in which the company was incorporated
or authorized to transact business in Virginia. For example, if
your company is incorporated on December 15, 2005, the annual report
and registration fee is due by December 31, 2006.
The minimum annual
registration fee is $100 for up to 5,000 shares. The fee increases
by $30 for each additional 5,000 shares with a maximum fee of
$1,700. Payment of the annual registration fee must be received by
the Commission by the due date to avoid imposition of a penalty.
Income Tax Rate:
Corporations: The current Virginia income tax rate for 2006 for
domestic corporations (corporations organized in Virginia) and
foreign corporations (corporations organized in a state other than
Virginia) is 6 percent of Virginia taxable income. In addition,
some localities in Virginia have authority to levy local income
taxes. You will need to check with your accountant or local
government to determine if your corporation will be liable for local
income taxes.
S-Corporations: If you meet the federal tax law requirements to
operate as an S-Corporation, the IRS allows your business to "pass
through" its income to the shareholders. This means that your
business will not pay any IRS corporate level income tax. However,
you'll have to claim your entire share of the business income on
your personal federal income tax return even if you did not take any
money out of the business.
In Virginia, the law extends this favorable tax treatment to state
corporate income tax liability and S-Corporations will not be
subject to the corporate income tax.
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