Sole proprietorship is the most suitable business format for small and new entrepreneurs. Setting up a sole proprietorship in Virginia is a simple process. It does not require any complex filing process with the Virginia State Government. The simple process of setting up your dream business can be completed in four easy steps.
It is important to obtain a VA Tax ID, as soon as you start planning your business. The tax ID will help you to arrange for credit line from the banks and other financial institutions, open bank accounts and apply for other licenses and permits.
The four easy steps to set up your business as a sole proprietorship
- The first step in the formation process is to select an appropriate business name for your business entity. The sole proprietorship can choose his given name or use a trade name for the organization. While choosing a trade name, the entrepreneur has to make sure that the name is easily distinguishable from the rest, and is easily recognizable. The name should be easy to remember and create an instant connect with the prospective clients. To check for the availability of a name, you can conduct a quick online check of Virginia Corporation Commission and U>S Patent and Trademark office.
- Entrepreneurs have to file the Business name or trade name of the organization, if it is different from their legal name. The name should be registered with the county clerk’s office, in the county where the business is located. Entrepreneurs have to mention this registered name, while filling the online application for the VA Tax Id.
- The sole proprietor must obtain a VA Tax ID, if he plans to hire employees in Virginia. The EIN or Tax Id is a unique nine digit number issued by the IRS. EIN is not required for sole proprietor firms, if they do not hire employees.
- The last step is to obtain all the necessary licenses and permits required to carry on the business. The entrepreneurs can gain an idea of the required permits and licenses by visiting the website of the Virginia Department of Professional and Occupational Regulation.
- Once the sole proprietorship firm is established, the entrepreneurs can open business bank accounts, obtain general liability insurance and pay taxes regularly using the VA Tax ID.