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The Internal Revenue Service (IRS) defines a Limited Liability Company (LLC) as a business structure allowed by some state statutes. Actually, all 50 states allow for the establishment of an LLC, but they do not all have the same rules and regulations. It is important that you check with your specific state concerning its regulations for LLCs.
One thing all states have in common is that the owners of an LLC are called members. There is no maximum number of members. One individual can form an LLC and be the only owner and only member.
West Virginia has a list of professions that cannot form LLCs and must instead form a Professional Limited Liability Company (PLLC). To form the PLLC, they must provide verification from their professional licensing agency that each member of the PLLC has a valid, current license from the licensing board to practice their profession.
LLCs have the characteristics of corporations, sole proprietorships, and partnerships. The advantage to an LLC is that it generally pays lower taxes than a corporation.
An LLC has an advantage over partnerships and sole proprietorships in that it separates business liabilities from personal assets with the limited liability protection. However, it’s important to note that the protection is not guaranteed and depends on maintaining proper business conduct. Generally speaking, the personal assets of LLC members may not be used to pay the LLCs debts.
There are six steps to register an LLC in West Virginia. They are:
Below, you’ll find a detailed explanation of each step to walk you through establishing your own LLC.
West Virginia has specific rules about naming your business. Most are either the same or similar to rules in other states. In West Virginia, choosing a business name is the first step.
You must carefully follow the rules established by the West Virginia Legislature for naming your business. Specifically:
Members of certain professions may form a Professional Limited Liability Company (PLLC). Only members licensed or otherwise legally authorized may be a member of the PLLC. The same rules that apply for naming an LLC apply to the naming of a PLLC.
Professions that qualify to form a PLLC and that may not form an LLC are:
To complete your filing for a business name, you must include the names of all who will be members of the PLLC and verification from the state licensing board that the professional licenses of all members are current and authorized to practice their profession.
Once you have decided on a name, the next step is to reserve it. West Virginia provides a special form for you to submit along with a $15 fee that allows you to reserve the name for up to 120 days while you prepare your other documents, like your Articles of Organization.
At the end of the form are the addresses of three state offices where you can either mail the form or submit it in person. You can submit the form online and pay the $15 fee with a credit card.
If you will be doing business under any other name other than the one you chose for your LLC or PLLC, you need a separate business license for every name under which you plan on doing business.
A DBA, or trade name, is not a business entity or business structure like an LLC but is simply the name under which your LLC will be doing business. You can have as many DBAs as you can afford.
The fee for each DBA is $25 and your application must include:
The United States Patent and Trademark Office (USPTO) defines a trademark as: “any word, phrase, symbol, design, or a combination of these things that identifies your goods or services”. It’s how customers recognize you in the marketplace and distinguish you from your competitors. The word “trademark” can refer to both trademarks and service marks.
You can register a trademark for use in West Virginia by going to the West Virginia Secretary of State website. There are five steps to completing the application.
Once registered with the state, the trademark is good for 10 years. You may renew the trademark when it expires
An LLC in West Virginia is formed by filing articles of organization. In general, the following information must be included:
There are quite a few state fees you must pay to begin your LLC and be ready to operate it as a business entity. Some of those fees include:
Reservation of business name: $15.
DBA (tradename): $25 for each DBA registered.
Articles of organization: The fee for filing the Articles of Organization is $100. If you have an existing LLC and want to do business in West Virginia, the fee is $150. It will take 5-10 business days for processing.
You can expedite the processing by paying the following fees:
Pay an extra $15 for a certified copy of your Articles of Organization.
All fees are waived for veterans.
Rules and regulations change now and then. This may not be a complete list, so check with the office of the West Virginia Secretary of State before submitting your application to be sure you have covered all the fees. If a required fee does not accompany the application, the registration of your LLC will be delayed.
Annual report: All LLCs are required to file an annual report. The fee is $25. The annual report fee for veterans is waived for the first 4 years the LLC is in operation.
There is a $50 late filing fee. The failure to file an annual report may result in revocation of the LLCs authorization to do business in West Virginia.
You can file your articles of organization online. If you do this, you can pay the filing fee by credit card if you provide an e-payment authorization form.
If you prefer to file the documents in person or by mail, you can download the form and fill it out.
If mailing the articles of organization, they can be sent to any one of the following state business centers:
You may walk into any of these three offices for in-person filing. Call first to get the hours of operation.
As in all other states, West Virginia requires every LLC to have a registered agent. Your LLC can be our registered agent if you provide a physical address and phone number and the person designated to receive process is over the age of 18.
You must provide the name of the registered agent and the physical street address in West Virginia as a place where service of process can be made. The registered agent must be a resident of West Virginia or a corporation or LLC authorized to do business in West Virginia.
In West Virginia, the LLC may be its own registered agent. A registered agent may be a professional registered agent service.
An operating agreement for your LLC is not required to be filed with the state of West Virginia. However, it is highly recommended that you create one.
The Small Business Administration (SBA) of the federal government urges you to create this agreement and that it should include:
The filing fees for the Articles of Organization are waived for veterans.
The Annual Report fees are waived for veterans for the first 4 years after the LLC is formed.
The IRS requires every business entity registered in any state of the United States to have an EIN, which is an “employer identification number.”
Applying for an EIN is fast and free. Go to the IRS website and fill out form SS-4 for an LLC EIN. You will need to answer specific questions about your LLC and submit the Social Security Numbers (SSNs) of all the principals. You must also use a physical address for your LLC, which may be the address of a principal or the address of your Registered Agent.
Although you can apply for your EIN yourself, this is a service that we provide at Tailor Brands.
Your EIN will be used for all tax and business purposes. Some ways you will use this number include:
Personal benefits to using an EIN instead of just using your SSN include:
The tax structure for West Virginia LLCs is paid to the West Virginia Department of Revenue. The taxes are:
The LLC does not pay an income tax to the IRS or the state. The individual members pay income tax on the income they earn from the IRS. The rate is the same as for any other person who earns income in the state of West Virginia.
If your LLC sells any products, you will have to collect sales tax at the point of purchase. Not all goods are subject to this tax. You can learn whether you need to collect sales tax from the West Virginia sales tax site.
All members of the LLC are considered self-employed, so you will need to pay self-employment tax to the IRS and the West Virginia Department of Revenue.
If the LLC has employees, the LLC will need to withhold from the payroll taxes for the IRS, Social Security and Medicare taxes, and Federal Unemployment Taxes.
You may need to pay other state taxes. Consult with your accountant to be sure you are in compliance and have paid all the requisite state and federal taxes.
Now that you have formed our LLC, you may sit back and be pleased. But your job is not over. You still have things to do.
It is important that you have separate personal and business accounts. To open an LLC bank account, you will need:
You may need more than one business account. Recommendations are that you have:
It’s highly advised to never commingle business and personal accounts. Pay all debts and taxes for the business from the business accounts. This includes payments to LLC members, to all independent contractors, and legal fees for the LLC. Any payment to the registered agent must be made through the LLC.
You must file an annual report to the West Virginia Secretary of State. This costs $25. If you are late, there is a late fee of $50. If you are really late, the state may revoke your license to do business.
It can be somewhat complex to set up the finances for your LLC to be sure you are in compliance with all state and federal tax laws. Plus, you want to be able to take all the benefits to which you are legally entitled.
You need to identify your goals and your needs for issues like keeping an adequate cash flow, determining how much insurance you need and what types, and how you can optimize your income.
The best way to do this is by either hiring a legal firm or a tax professional like a certified public accountant. You want to be sure you hire someone who has the appropriate knowledge of all IRS and West Virginia tax requirements. The professional must also have an in-depth knowledge of how LLCs function.
In addition to complying with all federal and state requirements, check with your municipality. It may have specific permit requirements for the type of business for which you formed your LLC.
All West Virginia employers are required to maintain workers’ compensation insurance for their employees. There are other insurance requirements for different types of business. You can find the insurance requirements for West Virginia employers and businesses in general at the West Virginia One Stop Business Portal.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.