Regulations for a Single-Member LLC in Virginia

Under Virginia business law, a limited liability company (LLC) can be a small business with a single member. When referring to LLCs, the state uses the term “members” rather than “owners.” Generally, an entrepreneur doing business as a single-member LLC operates according to the same rules as a multi-member LLC.

A member of an LLC can be a person, a corporation, a general or limited partnership, or a trust.

Starting an LLC in Virginia is essentially the same as creating an LLC in Virginia, forming an LLC in Virginia or setting up an LLC in Virginia. A prospective member will need to pay the $100 registration fee and file the correct form for this business structure.

This will be LLC-1011 for a regular LLC, LLC-1052 for a foreign LLC, and LLC-1103 for a professional LLC. The form can be filed online or mailed as a printed paper form.

The two basic types of LLCs in Virginia are a regular LLC and a professional LLC. A regular LLC is organized for a purpose that does not involve professional services of certain licensed professionals.

A foreign LLC is based outside the state of Virginia. A professional LLC is an LLC organized for the purpose of rendering a qualified service by licensed professionals, such as:

• pharmacists.
• optometrists.
• physical therapists.
• physical therapist assistants.
• practitioners of the healing arts, such as doctors.
• nurse practitioners.
• practitioners of the behavioral science professions, such as therapists and psychologists.
• veterinarians.
• surgeons.
• dentists.
• architects.
• professional engineers.
• land surveyors.
• certified landscape architects.
• certified interior designers.
• public accountants.
• certified public accountants.
• attorneys-at-law.
• insurance consultants.
• audiologists.
• speech pathologists.
• clinical nurse specialists.

To form an LLC , a party must file the Articles of Organization of the Virginia LLC. The form requires the party to share:

• Name of the LLC.
• Contact number for the LLC.
• Complete physical address of the LLC's principal office, including street name and number. Post office boxes cannot be used.
• Name of registered agent who accepts documents and notices on behalf of the LLC. LLC can not act as its own registered agent and can have only one registered agent.
  
• Physical address of the initial registered office, identical to Virginia business office of registered agent, including street number and name.

There are specific rules regarding the name of the LLC. The name must contain one of these terms: “limited company,” “limited liability company,” “L.C.,” “LC,” “L.L.C” or “LLC.”

The name must be unique; there cannot be a business on record with the Commission with the same name. Also, the name cannot use language that refers to a different business type, like a corporation and cannot represent a service the LLC will not provide, like banking.

The form further requires the party to share the name of an individual who is a resident of Virginia and also a:

• Member of the Virginia State Bar.
• Member or manager of the LLC.
• Officer or director of a corporation that is a member or manager of the LLC.
• General partner of a general or limited partnership that is a member or manager of the LLC.
• Trustee of a trust that is a member or manager of the LLC.
  
• Member or manager of the LLC that is a member or manager of the LLC.

A general partner is one who assumes everyday responsibilities for running a partnership. A trustee holds and administers, meaning maintains or distributes, assets for a trust.

Alternatively, instead of providing the name of an individual who fits one of the above categories, the party can share the name of a domestic or foreign stock or nonstock corporation, LLC, or registered limited liability partnership authorized to transact business in Virginia.

All of the organizers of the LLC must sign the form. An organizer is a person or service provider that forms the LLC or assists business owner/s with forming the LLC.

If a business entity is an organizer, the signature block must include the name of the business and the name and title of the individual signing on behalf of the organizer. For example, “Bardie Corporation as organizer, by Jane Deere, President.”

Before a member forms an LLC, they should reserve or renew a business name or transfer a reserved business name for the LLC. The filing fee for either action is $10. The member must file the appropriate form for each action.

A protected series is a set of sub-LLCs within a larger LLC. A protected series designation from the Virginia State Corporation Commission (SCC) provides liability protection for each sub-LLC. Each sub-LLC is theoretically isolated from the others.

The purpose of a sub-LLC is to hold only specific property, not the property held by other sub-LLCs nor property held by the larger LLC. If each sub-LLC holds only specific property, a person with a claim against a sub-LLC can only make a claim against the property of that sub-LLC; it cannot make a claim against the property held by the other sub-LLCs or by the larger LLC.

A protected series’ name is required to begin with the name of the LLC. The name must contain the phrase “protected series” or the abbreviation “P.S.” or “PS.” The proposed name for the series needs to be distinguishable from other entity names on record with the Commission.

The legal document that outlines the affairs of the LLC and how it will conduct its business is called an operating agreement. This document is similar to the articles of incorporation for a corporation. When an LLC has only one member, an operating agreement can include any writing signed by the member that relates to the affairs of the LLC and the conduct of its business.

The parties signing the agreement do not need to state that the writing is an agreement. An operating agreement can also be any agreement between the member and the LLC that relates to the affairs of the LLC and the conduct of the LLC’s business.

In the second scenario, the LLC must have at least one manager who is a person other than the member. Also in the second scenario, the agreement does not have to be in writing.

No member, manager, organizer or other agent of an LLC in Virginia has any personal obligation for any liabilities of an LLC. This is true whether the LLC has a single member or multiple members.

The member/s will not have liabilities if the liabilities arise in contract, tort (a civil wrong done by one party to disadvantage another) or otherwise, solely because the member/s are a member, manager, organizer or agent of the LLC. A person to whom the rights of a member or manager are delegated is deemed an agent of the LLC.