It began with an idea, and you now have a strategy. You’re ready to launch a new business, but you want to ensure everything is done correctly. You realize you must adhere to local, state, and federal laws and take measures to safeguard your personal assets against business debts and liabilities. You also know that you must choose a business structure compatible with your long-term expansion and revenue growth goals but are unsure how to proceed.
The business lawyers at PJI Law, LLC have significant experience forming businesses for residents of Northern Virginia. We will walk you through the process, from business structure selection to paperwork filing. Contact us today to begin the process of establishing your business.
Steps for Starting a Business in Northern Virginia
Now that you’ve decided to start your own business, here’s a list of the key steps you’ll need to follow:
- Draft a business plan
- Secure funding
- Choose a legal business structure
- Choose a name
- Register your business
- Acquire federal and state tax IDs
- Open business banking and credit accounts
- Obtain the necessary licenses and permits
- Choose a location and negotiate a lease
- Obtain insurance
- Develop an internet presence
As you can see, there are several steps involved to get your business up and running. One of the most important steps is deciding upon the proper legal structure for your business. Read on as we discuss this in more detail below.
Choosing a Legal Business Structure in Northern Virginia
PJI Law assists clients in the formation of a variety of business structures. We can also assist you in determining which structure is most appropriate for your new venture. Among the possibilities are:
- Sole proprietorship
- Partnership
- Limited liability company
- C-corporation
- S-corporation
Sole Proprietorship
A sole proprietorship is a straightforward business to establish, as the owner views the business as an extension of themselves. While the simplicity of operating an informal sole proprietorship has several advantages, the owner remains personally liable for business debts and lawsuits. This reason alone demonstrates why it is generally preferable to have a more formal business structure to safeguard your personal assets.
In Virginia, you can establish a sole proprietorship without filing any legal documents with the Virginia state government.
Partnership
Other business entities, such as partnerships, limited partnerships, and limited liability partnerships, are permitted under Virginia law. A partnership, or general partnership, is simply an arrangement between two or more individuals to carry on a business for profit as co-owners. In exchange for an interest in the business, each partner contributes money, goods, property, or services.
The partners share in the business’s profits and losses and have an equal say in how the business is managed and conducted. While the partnership is a distinct legal entity, it does not protect the partners’ personal assets from its liabilities. However, when a partnership is registered in Virginia as a limited liability partnership, the partners’ personal assets are generally protected from the business’s liabilities.
Limited Liability Company
Limited liability companies (LLCs) are a very popular choice for new businesses in Northern Virginia. As the name implies, owners are only liable to a certain extent. As an LLC, your personal and business assets can remain separate, which means debt collectors will not be able to seize your personal assets to collect debts. LLCs are also exempt from the same stringent rules and regulations that apply to corporations. For example, if you form an LLC, you can avoid holding shareholder meetings and submitting annual reports. You’ll also have more options for management and profit distribution.
Many people in Northern Virginia prefer LLCs because of the tax benefits. You can choose to be taxed as a corporation, partnership, or sole proprietorship when PJI Law forms your LLC. Your Northern Virginia business lawyer will assist you in determining which option is best for your company.
Understanding S-Corporations and C-Corporations
Many of our clients want to start a business but are unsure how to get started. They are undecided about whether to form an S-corporation or a C-corporation. S-corporations are ideal for smaller businesses with limited growth prospects. S-corporations can have up to 100 shareholders who receive common stock and voting rights. The profits earned by the shareholders are taxed.
C-corporations can have an unlimited number of shareholders, allowing growth and expansion. These businesses, on the other hand, are taxed twice. First and foremost, the corporation must pay corporate taxes. Second, the profits of the shareholders are taxed.
You can get preferred stock when you run a C-corporation, but it doesn’t come with voting rights. Preferred stockholders, on the other hand, are entitled to dividends before common stockholders.
Before recommending the best option for you, PJI Law will assess your business plan and growth potential. Then our Northern Virginia business attorneys will assist you in forming your company.
Liability for Sole Proprietors and Partnerships
In some instances, operating as a sole proprietor or forming a partnership makes sense. These entities, however, do not provide liability protection. Additionally, your personal assets and the business’s assets are not segregated. That means a creditor can sue you for business debt and obtain a judgment against your personal assets. Consult a Northern Virginia business attorney before forming a sole proprietorship or partnership. Your attorney can review your business plan and financial assets to ascertain the level of risk associated with such an endeavor. Additionally, the attorney can discuss ways to protect your assets from business debts.
PJI Law: Your Business Lawyer Near Me
Have you found yourself searching for a “business lawyer near me?” PJI Law is a law firm that provides boutique legal services in business law, estate planning, probate, and civil litigation. Our team of experienced business attorneys will go above and beyond to make your life easier, with courteous, prompt service and constant communication. We help small business owners of all types and take legal headaches off your plate so you can focus on your business by ensuring you meet all legal requirements for starting a business in Northern Virginia.
Schedule a consultation with PJI Law today at (703) 865-6100 to learn more about how we can help you proceed with forming your Northern Virginia business. You can also fill out our online contact form here.
Copyright © 2022. PJI Law, PLC. All rights reserved.
The information in this blog post (post) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
PJI Law, PLC
3900 Jermantown Rd #220
Fairfax, VA 22030
(703) 865-6100
https://www.pjilaw.com
