B2B Markeplace

Before 1991, Virginia did not offer business owners with the option of using a Virginia LLC for operating a business. Accordingly, most small business operated without the use of a legal entity and this created an unlimited personal liability situation for its owners. While there has always been the choice of starting a corporation for business, the involvedness and compliance requirements of a corporation dissuaded many small business entrepreneurs.

The LLC in Virginia is a separate entity than its owners and this results in creating a layer of liability protection for the members. An LLC does not require a board of directors and there was no mention in the Virginia LLC laws of required meetings or many other formalities.

While more business owners began forming an LLC in Virginia for the protection, some still did not because they did not understand exactly what this legal creature was and did not really appreciate its many benefits. At the time, there was also a lot of confusion about how a Virginia LLC would be taxed and this caused businesses not to pursue the limited liability company as an option.

Then, in 1997, the Internal Revenue Service decided that it would help business owners to choose the LLC by passing regulations that allowed a Virginia LLC to automatically qualify for a single layer of taxation. This made the LLC a clear choice for most business owners over a corporation. In fact, if an LLC was only going to be owned by one person, there was not added tax complexity over a sole proprietorship. Yet, the owners could now get liability protection which was becoming more of a concern as lawsuits have become such an epidemic in this country.

So now, for minimal fees, a Virginia business owner can get liability protection, an easy and easy to manage and have more tax benefits. In just the past ten years, the Virginia limited liability company has greatly surpassed the Virginia corporation as the entity of choice for small businesses in the Commonwealth.