As a hybrid between a partnership and a corporation, a limited liability company (LLC) has many benefits over other business structures that make it an attractive option to business owners. For instance, it protects a member’s, or owner’s, personal assets from being involved in legal matters against the LLC. This means that it only allows the LLC’s assets to be taken in the event of a judgment against it. Another benefit is that, unlike conventional corporations, an LLC is only taxed once when the owner pays their personal income taxes.
The first step to forming an LLC in the state of West Virginia is choosing a name for the company. The business name must include “limited liability company,” “llc,””lc”, or some other form of one of the terms. You will also need to choose a registered agent for your LLC that can accept paperwork or be served on behalf of the LLC.
The registered agent may be a business or a person, but they must have an actual address in the state of West Virginia. You will also need to decide whether the LLC will be run by members or by outside managers. Once you have settled these details for your LLC, you will then need to file paperwork with the West Virginia Secretary of State’s office.
You can register your LLC with the West Virginia Secretary of State by either filing your paperwork online or mailing in a hard copy to the West Virginia Secretary of State’s Office. A domestic LLC is one that has been originally established in West Virginia. For these, you need to file Articles of Organization. Foreign LLCs, are LLCs that have already been registered elsewhere; for these, you must file an Application for a Certificate of Authority.
The paperwork for domestic and foreign LLCs require much of the same information. For both forms, you will be asked to:
- Submit the name, mailing address, email address, and website of the LLC;
- Indicate whether the LLC is to function as a regular LLC or professional LLC;
- List the names and addresses of the registered agent, the organizer, and the member; and
- State how the LLC will be run, how long it will be run, and who will run it.
Certain types of LLCs, such as scrap metal dealers and veteran-run LLCs, will need to include additional information or forms with their application. Also, foreign LLCs will need to submit a certificate of good standing along with their applications.
The documentation and other items required for an LLC in West Virginia may be less demanding than for other business forms, but they can still be somewhat complex. It may be necessary to work with a legal professional to ensure that all requirements are met in a timely way.
The main benefit of LLCs in general is that its members are protected against personal liability for the debts and violations of the company. Thus, if the company incurs debt, creditors cannot take the personal assets of the LLC members for the debt. However, the members are still liable for any debts or violations that arise from their personal actions.
LLCs may also receive various benefits associated with tax treatments and tax filing processes. For instance, West Virginia recently got rid of its business franchise tax, making it one of only a few states that does not have an annual tax required of LLCs.
The state of West Virginia also offers many different tax credits to help lower business costs. Some incentives include a manufacturing investment credit and high-tech manufacturing credits.
LLCs do have to file an annual report that costs $25 to file. In the past, West Virginia has been considered very friendly towards plaintiffs; however, that may be changing with new laws such as the tax credit laws. However, for now, West Virginia courts still tend to favor plaintiffs in cases against businesses.
Lastly, LLC members may be somewhat restricted or limited when it comes to the amount of control and participation they have with regards to company decisions. Unlike sole proprietorships or partnerships, the members may have less say when it comes to the decision-making process. This is something to consider when choosing what type of business structure to use when setting up a company.
When forming your LLC, it can be very important to speak with a West Virginia business lawyer. Your attorney can provide you with advice on how to properly register your LLC and help you avoid any pitfalls during the process. Your attorney can also represent you in court in the event that there is a legal dispute or issue.