Applying for a Business License: Tips for Virginia Residents
Applying for the necessary business licenses is one of the essential steps for starting a small business in Virginia. Businesses are legal entities, meaning they can own bank accounts, own property, and pay taxes almost as if they were a Virginia citizen. In Virginia and every other state, you must obtain a business license before legally operating your business. Ensuring that you have all of the proper business and tax licenses is essential. If you fail to secure all of the necessary licenses, you could face penalties, and your business license could be revoked. Here are some tips for applying for a business license in Virginia.
Choose a Legal Structure for Your Business
Many people do not take time to consider which type of legal structure they like for their business. In the excitement of writing your business plan, hiring employees, and finding a location for your business, you may not have given your legal structure much thought. Nonetheless, determining a legal structure for your business will help you apply for all of the business licenses you need. In Virginia, most businesses use the following types of common legal structures:
- Sole proprietorship
- Limited liability company (LLC)
We recommend speaking to an experienced lawyer about the advantages and disadvantages of each type of legal structure. Your lawyer can help you understand which legal structure provides the best financial, financing, and tax advantages for your business. After you decide on a legal structure, your lawyer can help you create your business. If you decide to create an LLC or a corporation, your lawyer can help you draft all of the foundational documents you need to legally establish your business.
Register with the Department of Taxes (DOT)
If you plan to sell products in Virginia, you will need to register with the Department of Taxes (DOT). Whenever you sell an item, you will need to collect sales tax and then pay the sales tax amount to the Commonwealth of Virginia. If your business has employees, you will also need to register as an employer with the DOT to withhold taxes. Virginia residents can register for both types of tax licenses and other business taxes by submitting the Virginia Department of Taxation Business Registration Form online or via paper form.
Acquire The Special Licenses and Permits You Need
The process of applying for licenses in Virginia can be overwhelming, especially if this is your first time starting a business. Unlike some other states, Virginia’s state does not require business owners to have a general business license to conduct business in the state. There are other types of licenses you may need to acquire, however. It is wise to speak with an experienced business lawyer who can review your business and tell you which type of licenses you need to comply with state and local laws.
Certain types of businesses and professions require licensing through boards, as overseen by the Department of Professional and Occupational Regulation. Depending on your business, you could need to apply for other types of business licenses. Licensing boards regulate professional licenses for people in the following occupations:
- Home inspectors
- Real estate agents
Other state occupational boards govern their own licensing requirements, such as those for doctors and lawyers. You and your employees must secure all of the necessary licenses before you open your business. According to state and local law, if you or your employees are part of an occupation governed by a licensing board, all certification and licensing must be completed before you open your business.
Register With the State Corporation Commission
If your business is an LLC, Corporation, or any other type of business except for sole proprietorship, you will need to register with the State Corporation Commission. Most businesses need to renew their registration every year as well. Keep in mind that if you operate your business in Virginia under a name different from your business’s legal name, you will need to register a fictitious name certificate with the clerk’s office for the Circuit Court in your city or county. This rule applies to all types of businesses in Virginia. You also need to file your fictitious name certificate with the State Corporation Commission.
Check With Your City of County Regarding Local Licenses
Every city and county in Virginia has different Licensing Laws. Most cities and towns require local businesses to apply for a license tax. Typically, a license tax is a yearly application that business owners file. Their yearly fee is calculated based on their gross income from the previous year. Some cities only subject businesses to a flat fee charge, or they could exempt the business altogether. Typically businesses pay the license tax to the city. However, some cities like Arlington require companies to pay the fee to the county. In other locations, the county is responsible for taking care of all business licensing.
If you run a restaurant or have an entertainment venue, there may be other permits and licenses you need to obtain to operate your business legally. City ordinances are responsible for business licensing, and they can change the requirements for business licensing without notice. That is why it is so important to check with your city or county government to find out what your exact licensing requirements are and comply with them.
Speak With an Experienced Business Lawyer
Starting a business is monumental, especially if you rely on your business for your primary source of income. Navigating the licensing process can be overwhelming, especially when there are different state and local requirements, and the requirements vary depending on your industry. One of the best ways to protect yourself in your company is to speak with an experienced business lawyer who will review your business plan and ensure that you have all of the licenses you need. Contact Fox & Moghul, Attorneys at Law today to schedule your initial consultation and learn how we can help you.