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Choosing The Right Legal Entity For You/Registration with The State Corporation Commission

State and local registration will vary depending on the business entity type. In order to complete the necessary registration forms, you must first determine which of these categories applies to your business. The most common forms of business entities are described below and on the following pages.

Choices

Sole Proprietorship is an unincorporated business that is owned and operated by one person. This person is entitled to all profits and is personally liable for all obligations of the business. You do not need to file with the State Corporation Commission or with the local Clerk of the Circuit Court unless business is conducted in Virginia under a name other than the legal business name. See assumed name filing requirements.

General Partnership (sometimes simply referred to as “a partnership”) is an association of two or more persons to carry on as co-owners a business for profit. Each partner contributes money, property, and/or services, and agrees to share in the profits or losses of the business. Ordinarily, each partner is liable for all obligations of the partnership. Partnership statements may be filed with the State Corporation Commission. Complete a Statement of Partnership Authority (Form UPA-93) and file with the Commission. A duly authenticated copy of a Statement that is filed in an office in another state may be filed with the Commission.

Limited Partnership is a partnership formed by two or more persons and having at least one general partner and one limited partner. General partners retain control over the management of the limited partnership and, ordinarily are liable for all obligations of the limited partnership. Limited partners invest money, property and/or services in the business and are entitled to share in the profits or losses. The limited partners’ liability usually is limited to the extent of their investment. A Virginia limited partnership is created by filing a Certificate of Limited Partnership (Form LPA-73.11) with the State Corporation Commission.

A limited partnership created under the laws of another state, or jurisdiction is called a foreign limited partnership. It must register with the State Corporation Commission before it transacts business in Virginia. Complete an Application For Registration of Foreign Limited Partnership (Form LPA-73.54) and file it with the State Corporation Commission.

Corporation is an entity with a legal existence apart from its owners. Corporations must comply with federal laws and with the laws of each state in which business is conducted.

Under Virginia corporate law, corporations are classified as stock or non-stock and domestic or foreign.

A domestic corporation is a stock or non-stock corporation is created under Virginia law by filing articles of incorporation (Form SCC 619) with the State Corporation Commission. A foreign corporation (Form SCC 759/921) is a stock or non-stock corporation created under the laws of another state, country or jurisdiction.

Every foreign corporation must register with the State Corporation Commission before transacting business in Virginia.

A stock corporation is authorized to issue shares of stock to raise capital and usually is organized for profit. Complete Articles of Incorporation (Form SCC 619) and file them with the State Corporation Commission.

A non-stock corporation is not authorized to issue shares of stock and usually is organized for not-for-profit purposes. Complete Articles of Incorporation (Form SCC 819) and file them with the State Corporation Commission.

A professional corporation (Form SCC 544) is one type of corporation which may be organized and authorized to do business in Virginia as a stock or non-stock corporation. It consists of a group of people authorized to perform certain professional services in the corporate form. Virginia law limits such services to the personal services rendered by the following:

  • Pharmacists
  • Optometrists
  • Physical therapists and/or physical therapist assistants
  • Veterinarians
  • Surgeons
  • Dentists
  • Architects
  • Professional engineer
  • Land surveyors
  • Certified landscape architects
  • Certified interior designers
  • Public accountants and certified public accountants
  • Attorneys-at-law
  • insurance consultants
  • Audiologists or speech pathologists
  • Clinical nurse specialists

Business Trust is an unincorporated business, trust or association governed by a governing instrument that provides for the property or activities of the business trust to be owned, managed or carried on by at least one trustee for the benefit of at least one beneficial owner. It is a separate legal entity whose beneficial owners are normally entitled to the same limitation of personal liability as are shareholders of a Virginia stock corporation.

A domestic business trust is created under Virginia law by filing articles of trust (Form BTA-1212) with the State Corporation Commission. A foreign business trust is created under the laws of another state, county or jurisdiction.

Every foreign business trust must register with the State Corporation Commission (Form BTA-1242) before transacting business in Virginia.

Limited Liability Company is unincorporated association usually having one or more members. It is a separate legal entity that limits the personal liability of all of its owners. Internal Revenue Service regulations allow a limited liability company to choose whether to be taxed as a corporation or as a partnership.

A domestic limited liability company is created under Virginia Law by filing articles of organization (Form LLC-1011 in Library) with the State Corporation Commission. A foreign limited liability company is created under the laws of another state, country or jurisdiction.

Every foreign limited liability company (Form LLC-1052) must register with the State Corporation Commission before transacting business in Virginia.

A professional limited liability company (Form LLC-1103) is organized to perform a professional service in the LLC form. The personal services authorized to be performed are the same as those listed under the professional corporation category.

Important Forms