Getting started

Starting a business is a daunting task. Here is a list of basic steps you need to take to get your business up and running. It’s important to note that not all steps are required for each business type. For example, a one-person, home-based business might only need to get a local business license and home occupancy permit. On the other hand, a convenience store that wants to sell gasoline, cigarettes and alcohol will require several local and state permits and registrations. Your to-do list will vary depending on your industry, location and structure.

Don’t worry, the Virginia Department of Business Assistance can help in a number of ways. Call the VDBA toll-free (866) 248-8814 to customize a list of “things to do” for your specific situation.
Use the Virginia Business Portal at http://www.business.virginia.gov as a “do-it-yourself” tool. Visit the Business Registration Guide at http://www.scc.virginia.gov/division/clk/brg.htm for a complete reference guide to the forms needed to establish businesses in Virginia. Your business will only need a few select forms.

The to-do list:

Register your business

To register your business you must select an operating entity. There are several types to choose from. If your business is a member of a profession that is licensed by the state you will need a state license no matter what entity you choose.

1) Sole proprietorship: This is the simplest form of business organization. In most cases, you will only need an occupational license or permit. You are personally responsible for your business and any liabilities. All income flows directly to the proprietor and is taxed on an individual basiss.

2) Partnership: Two or more people work together in this arrangement. Partners are responsible for company liabilities. Income flows to the partners through their
individual tax forms based on their share of the partnership. A limited partnership is similar, but one partner is designated the general partner and the others are limited
partners, reducing their liability.

3) Corporation: A corporation creates a new entity, which is taxed separately from its shareholders. This entity insulates business founders, because they are not
responsible for the company’s liabilities. The main disadvantage is that the company’s income is taxed twice, once as corporate earnings and a second time as income for the
shareholders. 

4) Limited liability company (LLC): LLCs offer benefits from partnerships and corporations. They are separate entities than the business owner, shielding the owner from liability.

Naming your business

Check whether the name you want is available with the State Corporation Commission at http://www.scc.virginia.gov/division/clk, or call (804) 371-9967. Avoid names that could be
confused with national brands. Large companies aggressively protect their brand names.

Register with the State Corporation Commission

Most companies must register with the SCC. Contact the SCC if you plan to do business under your business name or a trade name (commonly called a “dba” or “doing business
as”), to sell securities, to use a trademark or to operate a franchise. Visit http://www.scc.virginia.gov/division/clk, or call (804) 371-9967.

Create a business plan

Use a business plan to organize and clarify your business’ mission, market, finances and the benefits you can provide to consumers. Keep your mission brief and to the
point. Include potential problems and how you plan to finance your company.

Find financing

Collecting the capital needed to start your business is crucial. See page 10 for details.

Check local requirements

Contact the locality your business will be established in to find out which licenses are required. If you’re a new business, contact the local planning/zoning department to make sure your location is zoned for business activities.

Register for Virginia taxes

All Virginia businesses must register with the Virginia Department of Taxation. Contact the department at (804) 367-8037 or visit http://www.tax.virginia.gov. You will need to obtain a Federal Employer Identification Number from the Internal Revenue Service. Contact the IRS at (800) 829-1040 for details. Visit http://www.irs.gov to obtain form SS-4. Once that is

completed the IRS will send you other required forms for a new business. See page 12 for more information on applicable business taxes.

Virginia Unemployment Insurance

If you hire employees, you will need to pay unemployment insurance tax. The Virginia Employment Commission will assign your business an account number and send you an
Employee Handbook. This will explain reports, notices, requests for information and other communications you will receive from the VEC. For more information, visit http://www.vec.virginia.gov/vecportal.

Labor regulations

All Virginia companies are required to comply with state and federal labor laws. For guidance in all areas of labor regulations contact the Virginia Department of Labor and Industry at (804) 371-2327 or visit http://www.dli.state.va.us.