Virginia LLC vs Corporation: Fees, Annual Costs, Taxes and Which to Choose
For most small businesses in Virginia, a limited liability company (LLC) is simpler and cheaper to maintain than a stock corporation. A corporation fits better when you expect outside investors, plan to issue several classes of stock, or expect a future sale of stock. Both structures limit personal liability for business debts, so the choice usually comes down to filing costs, yearly paperwork, governance and how the business is taxed.
This guide is informational content, not legal or tax advice. Entity choice affects your taxes, liability and owner obligations in ways that depend on your specific facts. Talk with a Virginia business attorney and a certified public accountant (CPA) before you file.
Formation Filing Fees
Both entities are formed with the State Corporation Commission (SCC) Clerk's Office, and you can file online through the SCC Clerk's Information System (CIS) at cis.scc.virginia.gov.
An LLC files Articles of Organization (Form LLC1011). The filing fee is $100. Name requirements apply: the name must include a term such as LLC, L.L.C., limited company or limited liability company, and it must be distinguishable from names already on file.
A stock corporation files Articles of Incorporation (Form SCC619). The state charges a $25 filing fee plus a charter fee of $50 for each 25,000 authorized shares or fraction of that amount. The $75 total covers up to 25,000 authorized shares. A corporation authorized for 25,001 to 50,000 shares pays $125 in total, and the charge rises in $50 steps for each additional 25,000 block.
If you want to hold a name while you prepare your filing, the SCC reserves names for $10 for 120 days. Expedited online filing is available for an additional fee, and the expedited options are nonrefundable.
Annual Costs and Filing Deadlines
This is where the two structures differ most in ongoing work.
LLC annual cost
A Virginia LLC pays a $50 annual registration fee to the SCC. It does not file an annual report. The fee is due on the last day of the 12th month after the month the LLC was organized, and every year after that. The SCC assesses the fee about two months before the due date. A late payment adds a $25 penalty, and the LLC is canceled at the end of the third month after the due date if the fee stays unpaid.
Corporation annual cost
A stock corporation pays an annual registration fee that depends on its authorized shares. The SCC fee schedule dated 02/26 starts the fee at $100 for up to 5,000 authorized shares and adds $30 for each additional 5,000 shares. Confirm the amount for your share count on the SCC annual fee schedule at scc.virginia.gov/businesses, because the schedule can change.
The annual registration fee is due on the last day of the formation month. The annual report is due on the last day of the 12th month after formation. The report may be filed no earlier than three months before that deadline, and the report itself carries no fee. Corporations therefore have two separate yearly SCC obligations: the fee and the report.
Side-by-Side Comparison
| Factor | Virginia LLC | Virginia stock corporation |
|---|---|---|
| Formation filing | Articles of Organization (Form LLC1011), $100 | Articles of Incorporation (Form SCC619), $25 filing fee plus $50 per 25,000 authorized shares or fraction |
| Yearly SCC registration fee | $50 annual registration fee | Set by authorized shares; $100 for up to 5,000 shares plus $30 per additional 5,000 (confirm on the SCC schedule) |
| Annual report | None | Required, due the last day of the 12th month after formation; no fee |
| Registered agent | Required; Virginia resident with a Virginia street registered office | Required; same basic rule, and the agent must be available during business hours |
| Management | Managed by members unless the articles or operating agreement name managers | Board of directors, officers and bylaws |
| Owner liability | Members and managers have no personal obligation for company debts solely because of that role | Shareholders are generally protected from corporate debts |
| Virginia income tax filing | Multi-member LLC files Form 502 as a pass-through entity; single-member LLC reports on the owner's return | C corporation pays 6 percent on Form 500; S corporation files Form 502 and owners pay on their own returns |
| State franchise or gross receipts tax | None | None |
| Local business license | Set by each locality under BPOL, if the locality levies one | Set by each locality under BPOL, if the locality levies one |
Registered Agent Rules
Both entity types must keep a registered agent. The agent must be a Virginia resident with a Virginia street address for the registered office, and must be available there during business hours. The agent must also be either a member of the Virginia State Bar or a member, manager, officer, trustee or general partner of the entity. An entity cannot serve as its own agent. The rules are similar for both types, but the people who can qualify as an insider agent differ slightly by entity, so check your entity's role list before you name one. For a full breakdown, see Virginia registered agent requirements. Commercial agent pricing varies by provider, so compare current rates before you sign up.
Governance and Liability
A corporation is run through a board of directors, officers and bylaws. Those formal structures apply whether the business has one owner or many. An LLC is more flexible. Under Va. Code 13.1-1022, an LLC is managed by its members unless its articles of organization or operating agreement name managers. Many small LLCs keep the governance simple, but a written operating agreement is still the best place to define voting rights, profit shares and what happens when an owner leaves.
Liability protection works similarly in both structures. Under Va. Code 13.1-1019, a member or manager of an LLC is not personally obligated for the company's debts solely because of that role. Shareholders of a corporation are generally protected in the same way. Liability protection is not unlimited, though. Personal guarantees on loans or leases, your own negligence and failure to keep the business separate from your personal finances can all expose you to personal claims.
Taxes: What Changes by Structure
Virginia does not levy a state franchise tax or a state gross receipts tax on either entity type. The tax you pay depends on how the entity is classified for income tax purposes.
- Single-member LLC: Virginia does not treat it as a pass-through entity. Profit is reported on the owner's individual return.
- Multi-member LLC: Files Form 502 as a pass-through entity, and each member pays on its share of income.
- C corporation: Pays Virginia corporate income tax at a 6 percent flat rate on Form 500.
- S corporation: Files Form 502, and its owners report their shares on their own Virginia returns.
Individual income tax rates for owners are 2 percent on the first $3,000 of taxable income, 3 percent up to $5,000, 5 percent up to $17,000 and 5.75 percent above that. For the full range of state tax obligations, see the Virginia business taxes overview and the Virginia Department of Taxation (Virginia Tax) website.
Entity choice does not change your sales tax obligation. The state base rate is 5.3 percent, combining state and local tax. Some localities charge more: 6 percent in the regional-tax localities, 6.3 percent in eight localities, and 7 percent in the Historic Triangle (James City County, Williamsburg and York County). The grocery rate is 1 percent. Register for a sales tax permit through Virginia Tax's sales and use tax page if your business sells taxable goods or services.
Self-employment tax
Owners who work in the business generally owe self-employment tax on their net earnings. The total rate is 15.3 percent. It is made up of 12.4 percent Social Security on earnings up to the 2026 wage base of $184,500 and 2.9 percent Medicare with no cap.
An LLC or corporation can elect S corporation tax treatment by filing federal Form 2553. Under that election, owner-employees must be paid a reasonable salary, and profit beyond that salary may be distributed differently for payroll tax purposes. Any savings depend on your profit level and the salary you set, so ask a CPA to run the numbers before you make the election. For a deeper look at that choice, see Virginia LLC vs S corp: which structure is best for you.
Estimated tax payments for owners
Virginia individual estimated payments are due May 1, June 15, September 15 and January 15. They are not due April 15. If you file your return and pay the full balance by March 1, the January payment is excused. Virginia's underpayment rule is built around paying at least 90 percent of the current year's liability, with prior-year and annualized alternatives. Confirm the exact method with Virginia Tax before you rely on it.
Local Business License (BPOL)
Virginia has no general statewide business license, and the SCC issues none. The local license is the Business, Professional and Occupational License (BPOL) tax under Va. Code 58.1-3700 et seq., and each city, county or town sets its own rates and deadlines, usually through the Commissioner of the Revenue. Not every locality levies a general BPOL. Under Va. Code 58.1-3704, a locality may levy none. Some counties, including Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna, have no general county license, and towns can replace the county tax within their boundaries.
Population also sets a floor on what a locality can require. A locality with more than 50,000 people cannot require a license for businesses with gross receipts under $100,000. A locality with 25,000 to 50,000 people cannot require one for gross receipts under $50,000. No statutory floor applies to localities under 25,000 people. Localities over 50,000 may waive the license up to $200,000 in gross receipts, but confirm that waiver ceiling with your locality. Entity type does not decide whether you owe BPOL. Check the rules for your city or county, and see Virginia business license requirements for more detail.
When Each Structure Fits
An LLC fits a solo or small service business, a business with a few owners who want simple profit sharing, or a company that wants lower yearly paperwork. The $50 annual fee and the absence of an annual report make the LLC the lower-maintenance choice for most owners.
A corporation fits a business that expects venture funding, has or plans to have many shareholders, needs several classes of stock, or expects a future sale of stock. Those features are built into the corporate form. A business planning that kind of growth may also be formed in another state, which this site does not cover.
Converting Later
A Virginia LLC can convert to a stock corporation by filing with the SCC. The conversion fee varies with the filing, so check with the SCC before you start. Converting early is usually simpler than converting after many owners, contracts and tax years have built up.
Next Steps
Decide which structure fits your plans, then follow the filing steps for that entity. Start with how to start an LLC in Virginia or how to start a corporation in Virginia. Before you file, confirm current fees on the SCC website at scc.virginia.gov/businesses and check the Virginia Tax guidance at tax.virginia.gov. For a choice that involves investors, stock issuance or significant tax planning, a Virginia business attorney and a CPA can review your situation before you file.