A Virginia limited liability company is the most common legal entity for small business. This is because it offers the most benefits over other legal entity structures. Understand the three major benefits so you can ensure you take advantage of them.
Limiting Liability Protection
Entrepreneurship is one of the best paths to financial freedom in the US. However, without limited liability entities, a business owner would expose everything he owned in order to start a business.
Without a legal entity such as a Virginia limited liability company, you could operate your business as a sole proprietor but in this case, everything you own would be at risk of loss for business related activity: your house, automobiles, savings, jewelry, real estate . . . nothing is protected.
The essential benefit of a limited liability company in Virginia is that the law imposes a lawyer of protection between members of the LLC (who are the owners) and the activities of the business which could give rise to lawsuits and other liabilities.
This protection is the same benefit afforded by corporations but with a Virginia limited liability company, you are not required to meet the formalities and other requirements imposed by a corporation. The LLC is a much simpler entity.
Now, this layer of protection does have some limitations. However, it is significant enough over no protection especially in the world today where business lawsuits are an epidemic.
Virginia Limited Liability Company Offers the Most Tax Choices
The LLC in Virginia is the most common vehicle for small business owners for several reasons. The Internal Revenue Service in 1997 passed a set of tax regulations which basically gave the LLC the right to choose how it wants to be taxed without any requirements.
This was a revolutionary move by the IRS and resulted in the number of limited liability company formations each year surpassing corporations. The Virginia limited liability company can afford its owners with limited liability protection, the ability to actively participate in the business operations and a single layer of income taxation without having to add any additional complexity to its structure.
Plus, for those LLC businesses which determine that a corporate taxation structure is better, a limited liability company in Virginia can elect C corporation or S corporation taxation. Accordingly, a Virginia LLC business can still retain the simplicity and flexibility of a Virginia limited liability company under the state laws and get benefits of corporate taxation without being subject to the more onerous requirements of a corporate legal entity.
If you want a head start in getting customers or other parties to do business with you, a limited liability company in Virginia will help. By having an official legal entity as your business entity, your business will be seen as a more official and professional business to the public.
There are so many fly by night and unprofessional businesses out there. It is so easy to start a sole proprietor business. Anyone can come up with a business name and call themselves a business.
However, if a customer sees a business which is an LLC (by having the LLC designation in the company name), it shows that the owners had a more formal business start up process by caring about the benefits of a formal legal entity and making the effort to form a Virginia limited liability company and completing the organization process.
Trust is important for a sustainable business. Having a limited liability company in Virginia can help.
Virginia is one of the best states for starting a business. The Virginia legislature has created a straightforward process for creating a Virginia limited liability company. However, there are strict rules and requirements including name rules, registered agent requirements, other mandated information and even document formatting rules.
Avoid the hassle and delays of rejected filings by making sure you understand the filing requirements or use a reputable attorney or formation service to for your limited liability company in Virginia. A proper formation is important for preserving the benefits as well.
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