Starting LLC in West Virginia: Peculiarities & Detailed Manual
Want to start an LLC in West Virginia? It is a profitable decision for a business, as the state has waived corporate tax in favor of gross corporate income tax. So you’ve decided to start an LLC? Not sure how to initiate the process? To start an LLC in West Virginia, you need to get ready for several stages.
We’ve prepared a guide for you with just six steps to form your LLC and to get success! You can also refer to the virtual LLC formation service.
Note: ZenBusiness is the best service to file the LLC. You’ll surely appreciate reasonable prices, company values, and other peculiarities.
An West Virginia LLC: The Notion & Essence
Many West Virginia business owners choose to start an LLC. So, unlike a corporation, they can take advantage of flexible management. We’re talking about the protection of personal assets that sole proprietorships and general partnerships lack.
The state of West Virginia puts forward simplified requirements for registration and maintenance of LLC and invites business owners to choose the type of taxation. Do you still have doubts about the LLC?
6 Stages to Form an LLC Correctly
Stage №1: Choose Your LLC Name
The LLC name is a significant aspect, as it is the name of your company that makes the first and strongest impression on the audience of your potential customers! The name must be different from existing company names and must meet West Virginia’s regulatory requirements. Now get started with the following aspects.
LLC name in terms of jurisdiction
The State of West Virginia obliges business owners to include the abbreviation DDS or the phrase – limited liability company in the name. Please note that the terms corporation or registered are prohibited. In addition, you cannot use the designations of other forms of business: banks or law firms.
Take care of the explanations
You must include in the title an explanation of the nature of your business. For example, if you are engaged in the computers’ repairing, write in the LLC title – computer wizard. If you have any values or principles, also indicate this. For example, if you are farming, use the term natural, nitrate-free, etc.
So, you need to get a little creative and fully comply with West Virginia’s legal requirements.
Stage №2: Hire a Registered Agent
A registered agent is called a statutory agent in West Virginia and will help you to start an LLC. The agent can be an West Virginia resident, natural or legal attorney responsible for sending and receiving legal documentation on behalf of the future company. A company representative can also be an employee of the company or its owner. The State of West Virginia notifies:
Domestic of foreign LLC eligible to run a business in West Virginia should continuously uphold an agent and their physical address for litigation processes… an agent can be a resident of West Virginia or a domestic or foreign company accredited to manage a business in the state.
A registered agent guarantees an excellent reputation for your West Virginia LLC. Also, if your business gets worse, West Virginia can take legal action against it without notifying you. The registered agent will always receive appropriate notification and will be able to take timely measures to protect your interests as an attorney.
You should apply to the online service to get started a business in compliance with all regulations and requirements. So, you will have the opportunity to filter spam and protect your personal and contact information. If you use the ZenBusiness and Northwest Registered Agent to form an LLC, you will receive the free services of a registered agent.
Stage №3: Applying for Registration
To register a business in West Virginia, you must file the Articles of Association with the West Virginia State Secretariat. If you are anxious about your LLC formation, you can submit your documents for pre-processing, which will allow the Secretary of State’s office to advise you of the eligibility. It can be a good option if you get started for the first time in an LLC without consulting an attorney. Be sure to provide:
- The desired name of your business.
- Personal and contact details of the registered agent.
- Business management form.
- Personal and contact details of the manager of your company.
- Signature of the applicant and registered agent.
- Date of application submission.
The fee to launch an LLC: West Virginia levies a $100 fee to establish an LLC.
Processing Time: West Virginia processes paperwork sent per post and sends the finalized version to you in 5-10 business days. It can be done faster if you are willing to cover one of the expediting fees. For $25, your filings will be handled within 1-2 business days. For $250, you’ll get your finalized papers in 2 hours. Keep in mind that processing begins after all documents have been duly filled.
Stage №4: The Operating Agreement Background
While an operating agreement is not binding in West Virginia, creating one could significantly improve the company’s climate. An operating agreement is a document that describes the structure of a project, the way it works, the rights and obligations of each partner.
This document reflects the consistency of partners and thereby reduces the chance of controversy and disputes. Therefore, it is significant that all members of the future LLC carefully read this document before joining the company.
An attorney can help draw up an operating agreement and determine the way income and liabilities will be distributed among the owners of your LLC. You will find more information about the operating agreement here. Prepare to enter the following information:
- Names of all participants.
- The rights and obligations of each of the listed participants.
- Description of procedures for voting or resolving differences between members.
- Regulations on the financial share of participation of LLC members.
- Description of the way you’re going to manage the LLC.
So, do not neglect this stage of LLC formation. It largely guarantees your safety and the observance of your rights by all members of the business project.
Stage №5: Tax Compliance
To conduct a business that you want to register as an LLC successfully, you need to comply with several tax requirements at various levels.
Requirements of Federal Significance
Does your LLC involve multiple owners? Then you need to take care of the EIN! The EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to US corporations. This number must be obtained by all business owners under whose leadership the hired employees work. A business owner can obtain an EIN from the IRS in person or by mail.
Your state’s cess requirements
The legal nature of your LLC determines the state taxes you’ll have to pay. If you own a flow-through entity – you’re a sole proprietor, or you run a business in partnership – you’ll cover income taxes based on the individual tax returns.
Contrariwise, if you run a corporation then your LLC is liable to the state’s corporate income tax. It currently amounts to 6.5%. You’ll access an in-depth guide on dealing with corporate franchise taxes in West Virginia here.
Additionally, companies operating in retail sales are liable to sales taxes. In most cases, the fee amounts to 6%. All information on sales taxes in West Virginia is available here.
LLC owners with staff must also cover taxes dedicated to the labor force. Entrepreneurs are required to arrange withholding taxes extracted from the staff’s wages.
LLC owners with employees are also required to pay several taxes. First, employers are responsible to pay withholding taxes on employee wages. Basically, you withhold a fixed sum from the staff’s wages and send it to the state.
Additionally, employers in West Virginia must fund the state’s unemployment insurance (if this insurance applies to your employees). It’s not a proper tax per se, yet payments must be forwarded regularly. You’ll access additional information on the find at Workforce West Virginia.
Besides these taxes, West Virginia upholds industry-specific fees. For instance, the state levies taxes on businesses dealing with fuels, health care, property, and others. Click here to get a comprehensive list of taxes in West Virginia.
Local Tax Business Demands
You may be liable to additional taxes based on the area your LLC is situated. Thus, several municipalities charge sales tax on top of the state payment.
The total rate may reach 7%. You’ll access guides on municipal taxes offered by the state here. We advise you to get in contact with the local government office to get a full picture of obligations and requirements.
Stage №6: Getting Business Licenses & Permits
You don’t need a statewide general business license to run a business in West Virginia. Nevertheless, the state requires LLCs operating in specific business areas to obtain permits requested by the federal government.
Licensure of that kind is expected from companies dealing with television, wildlife, transportation, and others. You’ll find all federally-regulated industries demanding permits in the list provided by the Small Business Association.
West Virginia upholds industry-specific taxation, so it doesn’t come off as a surprise that the state demands specific licenses for certain industries. It provides a great variety of papers of that kind, so you’ll quickly find the license which applies to your LLC.
We advise all business proprietors to consult the guide to business licensure provided by the state here. Keep in mind that local municipalities may demand specific local permits as well.
Other Stages for Business Owners After LLC Registration
After completing the six mandatory steps towards starting an LLC, you need to take care of the following.
Opening a business bank account
Separate your personal and LLC accounts. Thus, you will be sure of the safety of your personal and financial data. Besides, you won’t have any hassle when filing your charge returns. Your EIN will help you open a business account quickly, no matter what you choose a bank or credit union.
All owners of companies/corporations, regardless of their form of management that attracts employees, must go through the compensation insurance procedure. All basic and detailed information is available with the West Virginia Bureau of Workers’ Compensation.
This policy aims to protect the rights of workers who are injured at work and unable to work. It will not be superfluous to get a civil liability insurance policy, as well as pay attention to some other types of insurance.
Every LLC has to present a report on the profits it has gained over a fiscal year. Keep in mind that you are to submit the form regardless of whether you have gained income or your company bears losses. West Virginia provides sources to master income reporting. The state guideline as well as necessary forms you’ll access here.
Referring to the services of a qualified accountant
West Virginia obliges every LLC to present an annual report. You can submit it per Internet here or print off a pdf paper and send it per post. The submission cost amounts to $25. The annual report is meant to keep the state upgraded on any vital information relevant to your company and the changes it has undergone over a fiscal year.