How to Start an LLC in West Virginia
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If you’re looking to launch a startup in West Virginia and are leaning towards an LLC as the type of business, you’re in luck. This step-by-step guide offers all the information you need for business formation in the state.
Starting an LLC in West Virginia is meant to be a simple process that almost anyone can complete. To become registered, you will need to know all the important information about your business and submit it to the proper contacts at the West Virginia State Corporate Commission. The steps below will help you to form a successful LLC and remain in compliance with all state laws.
Name your LLC
Have a name in mind? See if it’s already listed in the state’s business directory. If the name comes up in a search, it’s taken. If it doesn’t, it’s yours to claim.
Knowing the name of your business is important both in the formal process of registering the business, as well as in kicking off marketing efforts.
West Virginia naming requirements
Most states have similar rules for what a business can be named, but you will need to be sure that your name meets all West Virginia guidelines. The biggest rule to consider is that West Virginia does not allow any existing businesses in the state to have the same name or names that are indistinguishable from one another. All business names are public record, so you can check name availability before committing to anything. Conducting a name search should be the first thing you do.
There are also a handful of rules surrounding what business names cannot include or must include. They must include a designator that shows the business is a limited liability company, whether it is the full phrase or an abbreviation like LLC.
Some things you cannot include in a name are:
- Designators that would be used for other business types, like corporations.
- Words used to name a government agency or the name of a specific government agency.
- Restricted words (bank, attorney, university) that do not have the proper paperwork and licensing accompanying them.
- Words considered obscene.
- Words that imply the business was formed for an unlawful purpose.
- Phrases or words that imply the business was formed for a purpose other than the one on file.
If you find a name that meets all the requirements, West Virginia allows you to reserve the name without filing for LLC formation. You’ll need to complete the Application for Name Reservation and pay a $15 fee, which allows you to hold the name for 120 days.
Choosing the best LLC name
Besides the laws governing LLC names in West Virginia, there are a few things you’ll want to consider when choosing a name. In addition to being memorable and reflecting your business, a name can be a great marketing tool.
Before committing to a name, take a moment to do the following:
- Say your name out loud to multiple people. Be sure they can repeat it back properly and spell it accurately.
- Print your name on marketing materials that vary in size, like business cards or yard signs, to make sure it reads well.
- Do a web search for your business name – does anything unsavory come up? Is there a business in another state with the same name?
- Check to see if the name has been trademarked at the national level.
- Determine what domain name you would want to use and be sure it’s available. If it is, buy it in advance so no one else can use it. If not, think about whether this will cause confusion for your customers.
- Check popular social media websites for usernames that you plan to use. Similar to URLs, think about what you will do if yours are taken.
You can reserve a business name in West Virginia for up to 120 days on the state website.
Select a registered agent
Each LLC formed in West Virginia is considered a separate legal entity from its LLC owners, which means that if the business is sued or found to owe taxes, the owner cannot be held responsible. To ensure that the business can be accountable, each LLC must appoint a registered agent as a part of formation. This agent is legally obligated to receive and transmit correspondence, like tax notices or service of process paperwork.
A registered agent can be either an individual or an organization.
Individuals as West Virginia registered agents
If you choose to use an individual, it can be any person, regardless of their affiliation with your LLC. Members themselves, employees, and managers can all be the registered agent, or someone with no connection at all could be listed. The only requirement is that they are over 18 years of age and have a physical address in West Virginia, not a P.O. box.
By being named as a registered agent, this person is committing to being onsite and available to accept documents during all regular business hours. Failure to do so can have legal consequences, so this person should always be trustworthy and reliable.
West Virginia registered agent services
To avoid any potential issues with an individual registered agent, some business entities choose to use a service instead. These companies offer other formation services too, like annual report filing.
File Articles of Organization
In order to officially establish your LLC, West Virginia requires you to complete a document that gives them all the basic information about your business. This is used to ensure you meet all requirements and allow the state to keep a record of your LLC. The form used to do this is called the Articles of Organization and must be submitted to the West Virginia State Corporate Commission.
West Virginia allows you to submit Articles of Organization either online or by mail. Physical mail can be sent to offices in Clarksburg, Charleston, or Martinsburg.
Though the Articles of Organization are critical to starting your LLC, the form itself is not complicated. You will need to provide the following information:
- Name of your LLC, including the designator
- Type of LLC (traditional or professional)
- Business address of the LLC’s principal office, including the county
- Mailing address, if different
- Address of the designated physical office in West Virginia, if any
- Registered agent’s name and address
- Email address to be used for business correspondence
- Web address for the business
- Whether the owner also owns other West Virginia businesses
- Name and address of all organizers
- Duration – at will or term
- Governance structure – member managed or manager managed
- Name and address of all members and/or managers
- Assignment of liability to the company or the members
- Purpose of the LLC
- Effective date
- Veteran status and other disclosures
- Signature of the person filing and their contact information
Once complete, the document can be submitted to the appropriate office for review.
You can fill out and submit your LLC formation documents here.
For both paper and digital submissions, there is a fee of $100 to submit the Articles of Organization. This is not refundable and is paid to the West Virginia Secretary of State.
West Virginia processing time
As soon as payment is received, an online Articles of Organization can be immediately processed and approved. Those submitted by mail can take up to two weeks.
Create an LLC operating agreement
Outside of the Articles of Organization, there is no requirement in West Virginia for additional documents to be filed or completed.
However, it is best practice for all businesses to complete an operating agreement so that it can be used as an internal reference point. These legal documents spell out how the business will be run and can be used to solve disputes that may arise in the future. Without an operating agreement in place, state law will be used to resolve conflicts.
Some topics you may find covered in an operating agreement include:
- Members’ ownership percentage
- Voting rights and responsibility
- Distribution of profits and losses
- Management structure (Single-member LLC, member-managed LLC, or manager-managed LLC)
- Powers and duties of each member and/or manager
- Procedures for buyouts, exits, and transferring interest in the event of a death
- Procedures for adding a new member
- What happens if the business dissolves
Most people are able to draft an operating agreement using simple online templates, but there are also attorneys who specialize in these documents. Whatever you agree on should be signed by all members and kept on record in the organization.
Formalizing your business as a West Virginia LLC is the first step in staying in good standing with the state. You don’t need to renew the Articles of Organization, but there are a number of recurring requirements that will ensure you can keep operating for a long time with no issues. Taking action on these requirements early will make running your business simple and avoid problems down the line.
Get your EIN
Even with the pass-through entity structure of an LLC, most businesses will owe some sort of federal taxes, either excise taxes or those associated with having employees. In order to properly track these taxes, the Internal Revenue Service (IRS) issues unique, nine-digit tax IDs to businesses. This is called an EIN, or Employer Identification Number, and is required for any business with federal taxes to pay.
Some LLCs will not be required to have an EIN, but it is still recommended. The number is free to obtain and is commonly required for opening a business bank account or securing funding. It also provides a tax ID that can be used in place of the owner’s Social Security Number, offering a more secure option for filling out forms.
West Virginia also issues nine-digit State ID numbers that are used to track state taxes.
You can get your EIN by visiting the IRS website.
Get West Virginia business licenses
Any LLC engaged in business in West Virginia is required to obtain at least one license at the state level: the business registration certificate, which is sometimes called a seller’s permit. This license is what allows each business to collect sales tax on behalf of the state and also serves as a registration to pay those taxes back as required. There is a $30 fee to obtain a business registration certificate, but it does not need to be renewed.
Some professionals and businesses will also need to obtain special state licensing based on their industry. The WV One Stop Business Portal enumerates professions who may need to pursue this licensing.
Along with state licensing, local governments in West Virginia may have additional licenses and permits they require for businesses. For example, some cities like Charleston require their own business registration application to be completed. It is important to contact local West Virginia government offices where your LLC will be operating to ensure you have all the correct licenses in place.
Open business bank accounts
LLCs are a unique business structure, offering the tax protection of a sole proprietorship but the legal protections of a corporation. This includes the ability to protect your personal assets from any business obligations because it is considered a separate legal entity. If it is found that you are mingling personal and business finances, this protection can be eroded, and you may even be held liable for business debts and obligations.
If you are ever asked to prove that you operate independently from your business, bank account records are one of the most important pieces of documentation you have. Having a bank account dedicated to your business income and expenses will allow you to show this separation easily. It will also make accounting and tax preparation simpler at the end of the year.
Along with this protection, having bank accounts for your business can help you appear credible and even establish a credit score for your business. Taking out business credit cards in the name of your business will build credit that may be used to secure more funding and investments down the line.
Review LLC tax rules in West Virginia
When an LLC is first formed in West Virginia, there is a $30 business registration tax that must be paid before you can conduct business. This tax also serves as the fee required to obtain a business registration certificate.
For income tax purposes, LLCs are considered pass-through entities. This means that by default, the profit and losses from an LLC are reflected in the returns of individual members. While West Virginia has a 6.5% flat tax on corporate profits, this does not apply to LLCs operating as pass-through entities.
All LLCs will need to file an annual report with the state of West Virginia. This can be done online and has a deadline of June 30th of the year following formation. There is a $25 LLC filing fee, and a $50 penalty for late filings.
Get insurance for your LLC
No matter what industry you are in, there is always the potential for something to go wrong and for you to find yourself a part of a lawsuit. It is important to have insurance in place so that you are covered in these scenarios.
There are three kinds of insurance most LLCs consider:
- General liability insurance, which is a broad policy used for coverage in the case of lawsuits. Things like property damage caused by your business or injuries on company property will be covered by these policies.
- Professional liability insurance is designed for professional service providers who may be accused of malpractice or other business errors.
- Workers’ compensation insurance is designed to provide coverage for employees who become injured or ill at work. West Virginia requires this coverage for businesses with one or more employees, including LLC members.
You can choose additional policies to further protect your LLC.
Additional resources to help you set up a business in West Virginia
Through the West Virginia One Stop Business Portal, everyone from seasoned entrepreneurs to those thinking about starting out is able to access all the necessary resources. Some popular resources include:
Do LLCs in West Virginia pay an extra tax?
LLCs in West Virginia do pay one $30 tax upon formation. This payment doubles as the filing fee for obtaining a business registration certificate, which allows them to collect and pay sales taxes. LLCs are otherwise subject to the same pass-through entity structure in West Virginia as they are in other states.
When are annual reports due in West Virginia?
Every LLC in West Virginia must file an annual report each year by June 30th. This begins in the calendar year following the calendar year when your LLC was formed and began operating.
What’s the benefit of an LLC versus a sole proprietorship?
If you’re doing business as an LLC, you have liability protection. Business owners can also opt for pass-through taxes, which means the sole proprietor or LLC owners pay taxes via personal tax returns.
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