Starting a Business

Choose a Structure

A business becomes a ‘legal entity’ meaning that it can own property, can hold bank accounts, and pays taxes almost exactly as if it were a living citizen of the Commonwealth of Virginia. There are several types, however, each with its own benefits and limitations. While it can be changed later, it is far easier to make this decision correctly before going further.

The ‘right choice’ for you is truly dependent on your needs. Get to know the types and make a good decision for yourself. This decision impacts taxes, the relationships between owners, and, legal liability. If the company is sued for personal injury, can the plaintiff sue you personally and take your house, car, and bank accounts? These are important considerations.

Sole Proprietorships are usually owned by a single person or a couple. You’re personally liable for all business debts, can freely transfer all or part of the business, and for taxes, you can report profit or loss as personal income.

Limited Liability Companies (LLC’s) are very popular. You have limited legal liability like a full corporation however, for taxes they’re more like Sole Proprietorships or Partnerships.

General Partnerships let you share profit, loss, and managerial duties among the partners, and each is personally liable for any debt entirely. Members file an informational tax return and income/loss is filed personally. (“Joint Ventures” are short-term partnerships.)

C-Corporations are distinct legal entities, taxed separately from their owners and are generally not favored to own assets that substantially appreciate in value.  While they protect against personal liability, they do not have many of the tax and operating advantages of an LLC or limited partnership, except that lower tax rates may apply to annual net income below $75,000.

S-Corporations are not taxed as a separate legal entity and protect their owners against personal liability, but there are limitations on the number and type of eligible stockholders.  They also have certain less favorable tax and operating advantages than LLC’s.

File as a legal entity with the State Corporation Commission

Register Your Business and Name

Check to make sure your company name isn’t taken and register your name and trademarks on the State Corporation Commission  website.

• Register for an online account by clicking the green “Register” button.
• Once you get into your account click “Online Services” in the navigation bar.
• Then click “Name Reservations/Registration/Fictitious Name” and follow the prompts.

You should always consult a lawyer if you still have questions.

Complete Zoning Verification

Complete Business Zoning Verification  for residential or non-residential in the Online Portal. There is a ten dollar ($10.00) fee for verification. 

• Other zoning permits you may need include a Zoning Construction, Conditional Use, Modification/Variance, Sign, and Site Plan permit or Zoning Map Amendment. If these apply, fill out the General Zoning form in the Online Portal.
• For renovation or new construction, you may also need a building permit. See the Building Department page. When you are ready to apply visit the Online Portal.

For questions, contact the Department of Community & Economic Development, Room 203 upstairs, (540) 261-8607 or [email protected] .

Obtain a Business License

Obtain a Business License from the Commissioner of Revenue, (540) 261-8611 or [email protected].

Your business license fee will be based on your gross receipts and the rate for your business classification. A minimum license is $30.00.

You will need to bring:

• Your name and the business name
• Business mailing address
• Business location address
• Business phone number
• Federal identification number (Virginia’s Business One Stop) or your social security number
• A realistic estimate of your gross receipts for the first year of business
• Photo identification

 

Get Your Tax Numbers

To obtain a Federal Employer Identification Number (FEIN) visit Virginia’s Business One Stop portal.

To obtain Virginia Tax identification number complete the Business Registration Application with Virginia Department of Taxation.

Make sure you covered all your bases, such as:

• Virginia State Sales, Meals & Lodging, Withholding, Litter, and Tire Taxes–Register with the Virginia Department of Taxation for a Sales Tax Number. Forms can be downloaded at http://www.tax.virginia.gov/.

• Buena Vista Meals and Lodging Tax –Bring this form to the City’s Finance Director, Room 202 upstairs, (540) 261-8614, [email protected]

• Certain businesses must be licensed by the Virginia Department of Professional and Occupational Licenses, such as contractors, barbers, cosmetologists, real estate agents, auctioneers, etc. See state.va.us/dpor or call (80) 367-8500.

• Food service establishments must be licensed and inspected by the Virginia Department of Health. See http://www.vdh.virginia.gov/environmental-health/food-safety-in-virginia/food-operators/.
• Public utilities - Any inquiries for public water and sewer, refuse collection and curb and gutter should be directed to the Utility Department at (540) 261-1444
• Gas, Power, Cable, and Fiber

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