Many business owners in Virginia choose LLCs as their preferred business structure. LLCs aren’t taxed separately from other entities. Instead, the LLC’s gains and losses are transferred to the owners, who then report them on their individual tax returns. In Virginia, LLCs are obliged to pay a $50 annual fee and submit an annual report to the State Corporation Commission.
Although bylaws are not necessary in Virginia, they are useful in defining the policies and procedures of the business. Bylaws are frequently written when a corporation is formed and might include information on the duties and authority of the board of directors, how meetings are handled, and how the business is run.
There are two different sorts of corporations: S corporations and C corporations. Similar to LLCs, S companies are taxed in a way that passes income and losses through to the owners’ individual tax returns. Contrarily, C corporations are taxed separately from one another. S corporations have limitations on who can own them and how many stockholders they can have, which is the primary distinction between the two.
Articles of incorporation are required for corporations in Virginia. The Articles of Incorporation, which are submitted to the State Corporation Commission, include details about the corporation’s name, goals, and the number of shares of stock it is permitted to issue. Finally, Virginia permits composite tax returns, and LLCs are subject to state taxation. Although they are not necessary, bylaws can be useful in defining the company’s rules. There are two basic forms of companies—S corporations and C corporations—and Virginia does require corporations to file Articles of Incorporation. Always seek legal or tax advice before making decisions about the taxes or organizational structure of your company.