Many states require certain businesses to obtain business licenses to legally operate in the state. This licensing requirement may be in addition to any other tax and regulatory requirements. In Virginia, almost all businesses must apply for business licenses. Accordingly, limited liability companies, or LLCs, usually must obtain a business license not because they are LLCs but because virtually every business in Virginia must obtain some type of license to legally operate in the Commonwealth.
An LLC is a business entity that combines characteristics of sole proprietorships, partnerships and corporations. LLCs can get taxed like partnerships or sole proprietorships, but provide limited liability protections analogous to what corporations have. In addition, LLCs enjoy management flexibility and do not have the same onerous requirements that corporations have. To form an LLC in Virginia, the business organizers must file articles of organization with the State Corporation Commission.
Virginia imposes a state sales tax on the sale of all tangible personal property, with some exemptions. Counties and cities in the Commonwealth also impose local sales taxes. To pay these sales taxes, businesses must register with the Commonwealth to obtain authorization to sell goods and collect these taxes on behalf of the government. Different types of businesses have different requirements and regulations that must be followed.
In addition, Virginia LLCs must also obtain a business license from the county or city in which they intend to operate. For example, the city of Alexandria requires LLCs to fill out a Business License Application annually and pay all relevant taxes to obtain and maintain a business license in that city. The city imposes strict penalties for noncompliance with these rules.
Some types of professions are exempt from sales tax and business licensing requirements. For example, King William County exempts public service corporations and sellers of farm products as well as nursery products that are homegrown. In addition, newspaper, magazine and newsletter publishers, as well as wholesale manufacturers, are exempt from the requirements.
An attorney and founder of ScrofanoLaw, a general practice law firm in Washington, D.C., Joseph Scrofano has been writing on legal issues since 2008. He holds a Juris Doctor from the Washington College of Law, a Bachelor of Arts with special honors from the University of Texas and a master's degree in international affairs from American University's School of International Service.