A sole proprietorship is one of the most popular business structures in Virginia if you’re considering beginning a business. Entrepreneurs frequently choose it because it’s simple to set up and operate, costs nothing to start, and provides a lot of flexibility. We’ll go over the procedures you must follow in Virginia in this post to establish a sole proprietorship.
Choosing a company name is the first step in Virginia to setting up a sole proprietorship. You can name your company anything original or use your own name. Make sure you use the Virginia Business Name Database to see if the name is accessible. Additionally, you ought to see if the name is accessible as a web domain.
Step 2: File a Business Registration Form You are not required to register your business with the state of Virginia. However, the city or county where your firm is located will require you to obtain a local business license. You can apply for a business license in person at your neighborhood Commissioner of the Revenue office or online using Virginia’s ePermitting system.
The IRS issues an Employer Identification Number (EIN), a special nine-digit number, to identify your company for tax purposes. It’s a smart idea to get an EIN even if you don’t intend to hire staff. EIN applications can be submitted online or by mail.
Opening a business bank account is step four. Your personal and corporate finances should be kept separate. To deposit all business income and cover company expenses, open a separate bank account for your firm. It will be simpler to track your company’s finances and file your taxes as a result.
“Doing Business As” is referred to as DBA. It’s also referred to as a trade name or false business name. It’s a name that the company uses but isn’t the owner’s legal name. If a sole proprietorship in Virginia wants to conduct business under a name other than its own, it may do so by using a DBA. You must submit a Certificate of Assumed or Fictitious Name to the Circuit Court Clerk’s office in the city or county where your company is situated in Virginia in order to establish a DBA.
You must submit a Fictitious Business Name Statement to the county clerk where your business is situated if you’re launching a business in California and want to utilize a fictitious business name. The declaration must be printed in a countywide publication with general distribution. The declaration is effective for five years.
A fictional business name is referred to as a trade name in Georgia. You must file a document with the Clerk of Superior Court in the county where your business is located in order to register a trade name. A notification of your intention to use the Trade Name must also be printed in a county-wide newspaper.
Utilizing a DBA has the drawback of offering your company name no legal protection. It doesn’t stop others from going by the same name or registering it. Additionally, it doesn’t offer legal defense for your private property. Consider creating a Limited Liability Company (LLC) or Corporation if you’re worried about preserving your company identity and personal assets.
To sum up, starting a sole proprietorship in Virginia is a rather simple procedure. Decide on a name, get an EIN, a local business license, and a company bank account. You must submit a Certificate of Assumed or Fictitious Name if you want to use a DBA. Keep in mind to keep your personal and business finances separate, and if you require legal protection for your business name and personal assets, think about establishing an LLC or Corporation.
Taxes are not paid by DBA (Doing Business As) entities on their own. DBA is a technique for a business owner to utilize a different name for their company rather than being a distinct legal organization. The business owner is responsible for paying the taxes, whether as an individual or as a distinct legal entity like a sole proprietorship or LLC. Therefore, if a company uses a DBA, the owner of the DBA entity is responsible for paying the taxes.