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An LLC is a business structure that offers the flexibility of a sole proprietorship and the protection from liability of a corporation, combining the best features of the two business structures. Forming an LLC in West Virginia is an easy process.
In this article, you will find everything you need to know about forming an LLC, including a step-by-step guide, costs, and answers to frequently asked questions.
Step 1: Choose a Name for Your LLC
The first step in forming your LLC in West Virginia is choosing a name for your business. In the state of West Virginia, there are some guidelines you need to note when deciding on a name. A name that doesn’t meet the state’s requirements may lead to your application being rejected.
Here are the West Virginia naming guidelines:
- It is important that the name that you choose is unique and has not already been registered with the state. You can search existing businesses on the West Virginia Secretary of State’s website.
- The chosen name must include the words “Limited Liability Company” or use one of its abbreviations.
- If your chosen name includes any restricted words typically used for professional LLCs like banks and doctors, you may need to apply for additional permits. More information on restricted words can be found using this link.
- Your chosen name mustn’t contain any words used to describe government or military institutions.
Once you have decided on a name, there is an option to reserve your name for up to 120 days so that no one can use it. To reserve the name, you must complete Form NR-1, found on the West Virginia Secretary of State’s website. This form can only be submitted by mail with a $15 check payable to the Secretary of State.
West Virginia also offers LLC owners the option to trade under a different name than what was registered in the Articles of Organization. This is known as a DBA, Doing Business As, and can be registered online through West Virginia’s Business Portal after creating a profile on the portal, filling out Form MR-3, and paying a filing fee of $25.
Step 2: Appoint a Registered Agent For Your LLC
According to state regulations, all LLCs in West Virginia must appoint a registered agent for the business. A registered agent can either be an individual or a company. The duties of a registered agent include communicating with the government on your behalf and accepting mail and tax forms.
Your appointed registered agent must have a physical address in West Virginia and be onsite every day during regular business hours to accept any mail on behalf of your LLC.
Step 3: File the Articles of Organization
Once you have chosen a name and appointed a registered agent, you are ready to file the Articles of Organization. This is a form, Form LLD-1, that needs to be completed and submitted to the Secretary of State. The Articles of Organization require a payment of $100, but that fee is waived for veteran-owned organizations.
The Articles of Organization will include:
- The name of the LLC
- The type of LLC
- The address of the LLC
- The name and address of the registered agent
- The email address of the LLC
- The website address of the LLC – if applicable
- The number of businesses the applicant already owns in West Virginia – if applicable
- The names and addresses of all the organizers of the LLC
- The LLCs term of existence – if applicable
- The management structure of the LLC
- The names and addresses of the managers
- The purpose of the LLC
- If the LLC is a scrap dealer
- If the LLC is owned by a veteran
- The effective date of the Articles of Organization
- The signature of the person organizing the LLC
Step 4: Receive Certificate From the State
If your application is approved, you will be issued a state certificate confirming that your LLC is officially formed. Congratulations!
Cost to Start an LLC in West Virginia
Unlike some other states, the cost of starting an LLC in West Virginia is relatively low.
LLC costs in West Virginia:
- Name reservation – $15 (optional expense)
- DBA name registration – $25 (optional expense)
- Articles of Organization – $100
What To Do After Forming Your LLC in West Virginia
Forming your LLC is only one part of owning an LLC; some things still need to be done to ensure your business operates legally and remains in good standing with the state.
Create an Operating Agreement
Creating an operating agreement in West Virginia is not a legal requirement but is good business sense. An operating agreement is a document that contains all the essential information about the LLC and how the business runs day-to-day. You can create your own agreement, use free online templates, or have a lawyer make it. Either way, all members of the LLC need to agree on all aspects of the document.
An operating agreement can come in handy if you are ever in court, as the judge will use this agreement as a reference when making their decision.
While there are no rules on what needs to be included in an operating agreement, it is a good idea to include some of the following:
- A summary of what was provided in the Articles of Organization
- The management structure
- A brief outline of day-to-day practices
- The procedure for hiring and firing employees
- How profits and losses are divided in the business
- Any indemnity and liability clauses you feel are important
Obtain Business Licenses
All LLCs or individuals conducting business in West Virginia must apply for a West Virginia business registration certificate from the State Tax Department. This permanent certificate can be applied for online using the West Virginia Business Portal or with the state tax commissioner by filling out the form VW BUS-APP using this link.
Depending on your business type, you should also make sure if you need to obtain any other business license or permit.
Obtain an EIN
An Employer Identification Number, or EIN, is issued by the IRS to identify your LLC as a taxable entity. Having an EIN means you can open a bank account for the business, manage and pay taxes, and hire employees.
An EIN can be acquired online through the IRS website free of charge.
Separate Personal Assets From the Business
To protect your personal assets from liability and simplify tax filings, opening a bank account for the business is highly advisable. Getting a credit card for the business is a great way of keeping track of expenses.
Hire an Accountant
Taxes can get confusing even for the best of us. Consider hiring an accountant to make your life easier as a business owner and avoid any potential tax errors. You can either hire a third-party accounting service to take care of all of your expenses or put one on your payroll. Even if you are comfortable handling taxes and all things money-related in your business, an accountant can help take some load off your shoulders. This way, you can focus on the more significant aspects of the company instead of being overwhelmed come tax season.
Get Legal Advice
If you’re unsure about any legal procedures, it is highly recommended that you seek legal advice from professionals. A business attorney can help you to avoid any costly mistakes.
File the Annual Report
All LLCs in West Virginia must complete and submit their annual report by July 1st each year. The annual report is due each year between January 1 and July 1 of every year after the year the LLC is formed.
The annual report is a summary of the Articles of Organization and is basically a renewal of the LLC each year. The Annual Report keeps your LLC’s information up to date in the state’s records. The non-refundable fee for this report is $25 and can be completed online or by mail. Failure to submit in time will result in a penalty fee, and failure to submit at all may result in the dissolution of your business.
How to Keep Your LLC Compliant in West Virginia
Now that you’ve done all the hard work forming your LLC, you don’t want to risk losing it due to non-compliance with the state. Keeping your LLC complaint in West Virginia is quite simple, and below, you will find a list of things you need to do.
Here are some ways to keep your LLC compliant in West Virginia:
- File the annual report and pay the fee on time
- Register your LLC with West Virginia’s tax agency
- Ensure all licenses and permits are up to date
- Remain knowledgeable on state regulations and any changes to them
- Manage and pay taxes on a federal and state level
Tax Filing Requirements for LLCs in West Virginia
By default, most LLCs in West Virginia are treated as pass-through entities, meaning the business does not need to pay any taxes. Instead, the tax obligations are passed down to the individual members of the business.
However, in West Virginia, all LLCs are charged a Business Registration Tax of $30. When your LLC is first formed, this is a one-off payment to the state.
If you choose to be taxed as a corporation, your LLC must pay a corporation income tax of 6.5%, using Form CNF-120.
If your LLC has employees, the business must pay Employer Taxes. The first is Employee Income Taxes, which must be withheld and paid to the State Tax Department. Secondly, there may be State Unemployment Insurance that you will need to pay.
Lastly, you will collect and pay sales tax if your business sells physical goods or services.
For more information, you can visit the State Tax Department’s website.
Frequently Asked Questions
How long does it take to register an LLC in West Virginia?
Registering an LLC in West Virginia can take somewhere between 5 to 10 business days. However, if you register by mail, you should also consider any mailing time.
There are a couple of expedited options available that you can pay for if you would prefer to have your business formed within a day:
- 1-hour processing – $500
- 2-hour processing – $250
- 24-hour processing – $25
What tax structure should I choose for an LLC in West Virginia?
All single-member and multi-member LLCs in West Virginia are automatically assigned the pass-through entity tax structure. Using this tax structure, the business does not pay any taxes; only the members of the LLC will through their personal income tax returns.
If you would prefer to pay federal taxes to lower your self-employment taxes and receive some tax benefits, you would need to file your choice to be taxed as a corporation with the IRS.
Deciding whether it is better to be taxed as a pass-through entity or as a corporation is very dependent on each individual business. Consult a business attorney or accountant to understand your best tax structure.
Should you hire an LLC formation service in West Virginia?
Hiring an LLC formation service in West Virginia is not a legal requirement, but it is something you could do if you’re unsure of the process of forming an LLC. A wide variety of LLC formation services are available in West Virginia, and many also offer registered agent services.
Filed under: West Virginia Business Guides