Here’s an overview of the key steps you’ll need to take to start your own business in West Virginia.
The most common legal structures for a small business are:
There also are special versions of some of these structures, such as limited partnerships and S corporations. You’ll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Check Choose Your Business Structure on Nolo’s website for more information on how to choose the best ownership structure for your business.
For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the West Virginia Secretary of State (SOS). You can check for available names by doing a business organization search on the SOS website. You can reserve an available name for 120 days by filing an Application for Name Reservation. There are certain name requirements for LLCs and corporations (like including a word such as “LLC” for LLCs or “Company” for corporations). See How to Form an LLC in West Virginiaand How to Form a Corporation in West Virginia for more information.
Is your business a sole proprietorship or partnership that uses a business name that is different from the legal name of the business owner (for a sole proprietorship) or surnames of the individual partners (for a partnership)? If so, you must file an Application for Trade Name (DBA) with the SOS.
If you plan on doing business online, you may want to register your business name as a domain name. See Choose and Register a Domain Name for more information. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use. See How to Do a Trademark Search for more information.
Tax Registration. If you will be selling goods in West Virginia, you must register with the State Tax Department (STD) to collect sales tax. If your business will have employees, you must register with the STD for employer withholding taxes. You can register for both types of tax, as well as many other business taxes, using Form WV/BUS-APP, which combines all the primary state business tax registration forms.
EIN. If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There is no filing fee.
Regulatory licenses and permits. These cover areas such as:
Different state licenses and permits are issued by different agencies. One place to go for more information is theApply for Licenses/Permits section of the business4wv.com. Clicking on the option for “Regulatory Licenses & Permits -- By Category” will give you a list of many of the available regulatory licenses. You should also check theBusiness Assistance section of the Department of Commerce website and the Licensing and Registrationssection of the SOS website. For information about local licenses and permits, check the websites for any cities or counties where you will do business.
Professional and occupational licenses. These cover people who work in various fields. Go to the Apply for Licenses/Permits section of the business4wv.com website for more details. Click on the option for “Professional and Occupational Licenses -- By Category,” which will give you a list of the available licenses. Be aware that you may need to do a further click on “Professional Services” (or “Medical,” or “Legal”) before you’ll see the profession or occupation you want.
You’ll need to pick a location for your business and check local zoning regulations. That includes if you work from home. You may be able to find zoning regulations for your town or city by checking municode.com.
West Virginia taxes every kind of business. See West Virginia State Business Income Tax for more information on state business taxes in West Virginia.
Sole proprietorships. Pay state taxes on business income as part of their personal state income tax returns (Form IT-140).
Partnerships. Partners pay state taxes on partnership income on personal tax returns. In addition, West Virginia partnerships also must file Form SPF-100, West Virginia Income Tax Return S Corporation & Partnership (Pass-Through Entity). West Virginia partnerships are subject to the state’s business franchise tax.
LLCs. Members pay state taxes on their share of LLC income on personal tax returns. In addition, LLCs themselves have to file an additional state tax form. The specific form used will depend on how the LLC is classified for federal tax purposes. West Virginia LLCs are subject to the state’s business franchise tax. West Virginia LLCs also are required to file an annual report. See West Virginia LLC Annual Filing Requirements for more information.
Corporations. Shareholders must pay states taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on his or her personal state tax return. Moreover, the corporation itself is subject to West Virginia business franchise tax and state corporation taxes. And, finally, corporations must file an annual report with the West Virginia SOS.
If you have employees, you must also deal with state employer taxes.
And, apart from West Virginia taxes, there are always federal income and employer taxes. Check IRS Publications 334, Tax Guide for Small Business, and 583, Taxpayers Starting a Business, available at irs.gov.
Insurance is a good idea for most kinds of business. While insurance often is regulated at the state level, the types of business insurance available are usually similar across the fifty states. Check Obtaining Business Insurance for more information.