How to Start a Business in West Virginia
How do you start a business in West Virginia? By selling services or products in West Virginia, of course. With reasonable corporate tax rates and no business franchise tax, West Virginia is a great place to form a company. While forming an LLC or corporation provides you with asset protection, the process of forming and maintaining these business entities isn’t straightforward. In this complete guide on how to start a business in West Virginia, we’ll go over everything you need to know to get your business open and running in the Mountain State.
Ready to Start a Business in West Virginia?Let's Get You Started
Pick a Business Type
Name Your Business
File Formation Paperwork
Draft Internal Records
Get West Virginia Business Licenses
Organize Your Money
Get Business Insurance
Understand Your Tax Burden
Build Your Business Website
File West Virginia Annual Report
Apply for Trademarks
1. Pick a Business Type
Sole proprietorships and general partnerships are the easiest business types to form in West Virginia. A sole proprietor is a single person who sells goods or services without forming a separate business entity with the state, and a general partnership is two or more people selling goods or services.
While easy to form, sole proprietorships and general partnerships don’t provide you with liability protection. Without liability protection, there is no distinction between you and your business, meaning you’re responsible for all your business-related debts and legal issues. If you want liability protection, you’ll need to form a separate business entity, such as a limited liability company or a corporation.
West Virginia Limited Liability Company (LLC)
Limited liability companies (LLCs) are straightforward business entities that offer liability protection, giving you a secure separation between you and your business. With a flexible management structure, LLCs can maintain their default tax status or be taxed as a corporation. To start a West Virginia LLC, you’ll need to file paperwork with the Secretary of State and register with the State Tax Department.
West Virginia corporation
West Virginia corporations have owners called shareholders and a board of directors selected by the shareholder(s). Like with LLCs, owners of a corporation have liability protection against the debts, obligations, and legal issues of their business. Investors tend to prefer corporations to LLCs because of the strict organization and record-keeping procedures of corporations. To form a West Virginia corporation, you’ll need to file paperwork with the West Virginia Secretary of State and register with the State Tax Department.
Can an LLC be just one person?
Yes! A one-person LLC is called a single-member LLC. Single-member LLCs are one of the most common kinds of businesses in the country. For the most part, single-member LLCs are just like multi-member LLCs, but there are some slight differences in how they file taxes and protect personal assets.
Read all about Single-Member LLCs.
What about a West Virginia nonprofit?
In West Virginia, you can start a West Virginia nonprofit for any lawful reason. West Virginia nonprofits are run by a board of directors but may also have members. Nonprofits in West Virginia are formed by filing Articles of Incorporation with the West Virginia Secretary of State and registering with the State Tax Department.
Want to learn more? Check out our Nonprofit Guide.
2. Name Your Business
Naming a business in West Virginia requires following specific requirements set out by the Secretary of State. Sole proprietors and general partnerships use their personal legal name as their business’s name—unless the owner(s) get a DBA.
For LLCs and corporations, you’ll need a business name that meets West Virginia’s requirements. Your business’s name must:
- Use an appropriate identifier, like “LLC,” or “L.L.C” for a limited liability company or “Inc.,” “Corporation,” or “Incorporated” for a corporation.
- Not use words that describe government agencies like “police” or “department of state.”
- Not use words that suggest a false business purpose, like “charity” or “nonprofit” (unless your business is a nonprofit).
- Not use words that describe a service that requires a professional license, like “architect” or “doctor.”
- Be unique in the state of West Virginia.
Find out if your desired name is available in West Virginia by searching the West Virginia Business Organization database.
Can I reserve a business name in West Virginia?
Yes. You can file an Application for Name Reservation ($15) with the Secretary of State to reserve your business name for 120 days. West Virginia only reserves names that are not currently in use, so check the West Virginia Business Organization database or call the West Virginia Corporations Division to see if your name is available.
What is a DBA?
A DBA (doing business as) is a name your business uses to operate under other than your business’s legal name. Your company’s legal name is the name you list on all your business formation forms, or—in the case of sole proprietors—your legal business name is your name. In West Virginia, DBAs are referred to as trade names, not to be confused with trademarked names. To file a DBA or trade name in West Virginia, you’ll file the Application for Trade Name ($25).
What about trademarked names?
It’s a good idea to check with the US Patent and Trademark Office (USPTO) to make sure your business name hasn’t been trademarked by someone else. If it has, and you use it anyway, there’s a chance that the business could come after you for infringement.
3. File Formation Paperwork
To start a West Virginia LLC or corporation, you’ll need to file paperwork with the West Virginia Secretary of State and register with the State Tax Department.
- To form a West Virginia LLC, file West Virginia Articles of Organization
- To start a West Virginia corporation, file West Virginia Articles of Incorporation
You’ll need to list a West Virginia registered agent on these forms who will handle your legal mail.
Note: This information is all available through the West Virginia Business Information Search. Anyone with your business’s name can look up your home address, name, and any other personal information you list in your formation paperwork.
What is a registered agent?
A registered agent is a person or entity responsible for accepting legal mail on your business’s behalf. For your West Virginia business, your registered agent is required to have a physical address in the state. You may be your own registered agent, but if so, you will need to be present at the provided address during regular business hours to accept legal mail. Having a registered agent like Northwest gives you the peace of mind of not having to be constantly available just to receive mail.
How can I keep my information off the public record?
To keep your personal and private information off the public record, hire a registered agent who will list their name and address instead of yours wherever allowed. (Hint: we do that!)
4. Draft Internal Records
So far in this guide, we’ve dealt with public forms that you’ve had to file with the West Virginia Business & Licensing Division. Now, it’s time to organize your internal records. These are the documents your business will keep on record within your company. Though these documents are internal, you’ll likely need to show them to third parties like the bank or—if you start a nonprofit—the IRS.
Here are the major internal documents you need to organize for LLCs and corporations:
West Virginia LLC Operating Agreement
This is your LLC’s rule book. It defines how your LLC will do things like make decisions, distribute money, manage operations, and appoint officers. Your operating agreement plans for every big picture scenario your LLC is likely (or unlikely) to face, including dissolution.
Drafting an operating agreement is hard, and the internet is full of shabby templates that have been copied and pasted from who knows where. So we had our attorneys draft a West Virginia LLC Operating Agreement template that you can use as a solid foundation.
West Virginia Corporate Bylaws
Bylaws are the rules your corporation will adopt and follow internally. Bylaws detail how your corporation will appoint directors and officers, hold shareholder and board meetings, and handle emergencies, among other things. Unlike operating agreements, corporate bylaws are required by law in West Virginia (see WV §31D-2-205).
As with operating agreements, you can find plenty of bylaw templates online. But bylaws are pretty serious, so you don’t want to just use the first template you come across. Our attorneys drafted a West Virginia Corporate Bylaws template you can use to get started.
Starting a nonprofit? We also have West Virginia nonprofit bylaws.
5. Get West Virginia Business Licenses
In West Virginia, certain professions need to get licensed by the Division of Labor. Most counties in West Virginia also require local businesses to get permits or licenses from their county clerk or municipal office. Some businesses will need additional licenses as well. To help you sort out what you’ll need, we go over a few common licenses required in West Virginia below.
West Virginia Business Registration Certificate
Every business, including sole proprietorships, must register with the West Virginia State Tax Department for a Business Registration Certificate. You’ll need to file for the West Virginia Business Registration Certificate for every public business location you open. The good news is you don’t have to file or renew your certificate until you change your legal business name.
Professional Business Licenses
Depending on the services you’ll be providing, you will need to obtain a professional business license. For example, elevator service businesses must obtain a specialty contractor license through the West Virginia Division of Labor. Businesses offering professional services, like doctors, surgeons, psychologists, accountants, etc. also must have their licensing board complete the SOS Verification of Eligibility to get licensed by the state.
Local Business Licenses
You’ll also need to check your local jurisdiction’s licensing requirements. For example, in Wheeling, West Virginia, any business with a physical address, such as a restaurant or retail store, must get inspected and approved by the state for a license to operate. And in Beckly, West Virginia, certain businesses like collection agencies, theaters, and pawnbrokers must apply for a municipal license.
Learn more about How to Get a Business License.
How do I get a West Virginia Business Registration Certificate?
To get your Business Registration Certificate, you’ll need to apply online through the West Virginia Tax Division website or by filing a West Virginia New Business Registration Application. You’ll need to register each separate business that has a permanent public location.
How much does it cost to get a West Virginia Business Registration Certificate?
There is currently no filing fee associated with the Business Registration Certificate. Your registration is good until you move or change your business’s legal name.
How do I get a professional license in West Virginia?
To get a professional license in West Virginia, you’ll need to file with the West Virginia Division of Labor or your state licensing board, depending on your profession. Your profession’s licensing board will determine the requirements and fees for your license. For example, the West Virginia Board of Optometry charges $300. And getting a contractor license through the Division of Labor costs $90.
How do I get a local business license?
West Virginia’s local business licensing procedures are governed by the local jurisdiction where your business is located. For example, the Wheeling government website provides a list of steps to obtaining a local license, including filing an assessment sheet, getting zoning approval, having an inspection done, and more.
6. Organize Your Money
The liability protection you get from forming an LLC or corporation is only as strong as the separation between you and your business. At a minimum, you’ll need to open a bank account for your business. And if you’re going to hire employees, you’ll need to tackle payroll, too. But we’ve got you covered!
Open a Business Bank Account
To keep your business spending separate from your personal spending, you’ll need to open a business bank account. If you don’t, a court could find that your business is not actually separate from you, the owner, under the Alter Ego Doctrine. Also known as piercing the corporate veil, this is the outcome when a judge finds that a company is not a separate entity but rather an alter ego of the owner. If this ever happens, you could lose your limited liability status.
Opening a business bank account as a sole proprietor is important, too. Though sole proprietors and general partnerships have no limited liability status to protect themselves, both will benefit from organizing their business finances come tax season.
How do I set up a business bank account?
Do I need a business bank account to accept credit card payments?
Probably. Payment processors require you to provide them with a bank account. This is where they’ll deposit funds from transactions. Most of the time, this needs to be a business bank account.
Some payment processors may let you get away with listing a personal bank account, but it’s not a great idea. Mixing your business finances with your personal finances erodes the separation between you and your business, weakening your liability protection. It also turns tax season into a nightmare.
Learn more about Payment Processing.
Set up Payroll
Payroll is a necessary pain of hiring employees and setting up your business for success. If you decide to hire employees or independent contractors, here’s what you’ll need to do:
- get a FEIN
- register with the West Virginia Secretary of State and State Tax Department
- register with the West Virginia Department of Revenue to get your Employer Account Number
- determine whether you’re hiring employees or independent contractors
- prepare the forms your employees will fill out
- choose a payroll service or software
- decide on a payroll schedule
With our help, putting together a reliable payroll system in West Virginia doesn’t have to be hard. To help you along the way, select a reliable and secure payroll service or software that will automatically withhold payroll taxes, file state and federal returns, and pay your employees either by check or direct deposit.
What forms do my employees need to fill out?
Your new employees will need to fill out a W-4 to determine how much you’ll withhold and an I-9 to verify that the employee is eligible to work in the US.
What’s the difference between an independent contractor and an employee?
An independent contractor is self-employed—how they complete their work is not directly controlled by an employer. An independent contractor may perform the same kind of work for other businesses, and can do the work when and how they choose. An employee, on the other hand, performs their work how and when their employer chooses.
It’s important to understand the difference between an independent contractor and an employee. That’s because for employees, you’ll need to withhold and pay income, social security, and Medicare taxes. Independent contractors pay these taxes on their own.
If you’re unsure whether you’re hiring an independent contractor or an employee, you can file Form SS-8 with the IRS and let them decide.
Learn everything you need to know about hiring independent contractors.
How do I get a West Virginia Employer Account Number?
To get a West Virginia Employer Account Number, apply online through the West Virginia One Stop Business Portal.
7. Get Business Insurance
Forming an LLC or corporation protects your personal assets. But if anything disastrous befalls your business—like a lawsuit, burglary, flood, or fire—your business is on the hook to pay. Business insurance can help cover the costs.
West Virginia requires every business with employees to have workers’ compensation insurance. If your company is a commercial construction business or in the industry of transporting minerals, it must have, in addition to workers’ compensation insurance, a wage bond to protect employee benefits and wages. West Virginia doesn’t require businesses to have basic insurance.
Here’s what you need to know about insuring your business in West Virginia:
Workers’ Compensation Insurance
West Virginia requires all employers to have workers’ compensation insurance. Workers compensation insurance protects you and your employees when your workers are injured on the job. West Virginia business owners must file online through the West Virginia Offices of the Insurance Commissioner Employer Coverage Unit.
Liability insurance covers the costs of claims against your business for injuries or damages to the property of others, like clients or customers. This includes medical expenses, legal fees, settlements, and judgments. Whether or not you need it depends on whether your business is likely to be sued and how many assets your business needs to protect. If it’s just you and your computer in your basement, you might feel comfortable skipping liability insurance. Or maybe you won’t. Beyond general liability insurance, you can purchase or add on more specific types, like professional, cyber, commercial, home-based business, or product liability insurance.
Do business owners need workers’ compensation insurance in West Virginia?
No. Employers only need to get workers’ compensation insurance for their employees.
Do I need business insurance for my home-based business?
Probably. You can’t count on your homeowners’ or renters’ insurance policy to cover damages related to your business. Most insurance companies offer a home-based business insurance plan.
8. Understand Your Tax Burden
West Virginia has a 6.5% corporate income tax rate and a 6% state sales tax. But your tax burden isn’t determined by the state alone. You’ll also have federal and local taxes to consider.
- LLCs. Single-member LLC? By default, you’re taxed similarly to a sole proprietor. More than one LLC owner? You’re taxed as a general partnership. Either way, your default tax status is “pass-through,” which means you don’t pay corporate taxes. Instead, your LLC’s owners report profits and losses on their personal tax returns. Good news: West Virginia has a low range of individual income tax rates between 3% and 6.5%. You’ll pay those along with the 15.3% federal self-employment tax rate. An LLC can file paperwork with the IRS to be taxed as an S-Corp or C-Corp instead.
- Corporations. Corporations are taxed as C-Corps by default. This means that corporations pay the 21% federal corporate tax rate and 6.5% corporate income tax in West Virginia.
To pay your federal taxes (and take a good deal of other steps required to start a business), you’ll need to get an Employer Identification Number (EIN). You can apply for one with the IRS or hire us to get one for you.
Do I need an EIN if I’m self-employed?
If you’re operating a sole proprietorship or single-member LLC that doesn’t employ anyone else and you don’t need to file excise or pension plan returns, you don’t legally need an EIN.
However, you can still get one—and you probably should. Otherwise, you’ll have to use your own social security number to do business. Plus, you’ll likely need an EIN to open a business bank account.
How do I get an EIN?
To get an EIN, you can either apply online or file form SS-4 by mail with the IRS. Getting an EIN is free.
Check out our guide to applying for an EIN.
What is an S-Corp?
An S-Corporation is a federal tax election. Registered business entities like LLCs and corporations start out with a default tax status, but can file paperwork with the IRS to be taxed as an S-Corp. Like LLCs, S-Corps are taxed as pass-through entities. Like corporations, S-Corps can make distributions that aren’t subject to the 15.3% self-employment tax.
Learn more about the S-Corp tax election.
What is a C-corp?
A C-corporation is the default federal tax election assigned to corporations. Most corporations are taxed as C-corps, but LLCs can also apply for C-corp tax designation by filing paperwork with the IRS. C-corps file federal corporate income taxes and state corporate income taxes. C-corps can pay their shareholders in distributions, and the shareholders report those profits on their personal tax returns.
Learn more about the C-Corp tax election.
Local West Virginia Business Taxes
Local counties in West Virginia have the option to charge a 1% sales and use tax on businesses. These taxes are collected by the State Tax Department. Alderson and Charles Town are a few examples of municipalities that charge the 1% sales and use tax.
9. Build Your Business Website
If you want West Virginians to find your business, they have to be able to find you online. This means you’ll need a website, a business email account, and social media accounts. Don’t worry if you’re not especially tech-savvy—you don’t have to be a web developer or an influencer to establish a robust online presence. You’ll just need the following:
- Domain name. Your domain is the address where your website will live. You’ll want a domain name that is short, unique, local, and—most importantly—available. If your domain is trademarked, you could face legal trouble.
- Domain registrar. Once you’ve decided on a domain name, you’ll want to register it with a domain registrar. Some domains are more expensive than others. Some domain registrars also offer hosting and most will provide you with a business email that includes your domain name (“email@example.com”).
- SSL certificate. An SSL certificate signals to your users that your website is secure. If your website will use forms—like a sign-up form or a “contact us” form—an SSL certificate is critical. But even if you don’t you use forms, you’ll still probably want one—it allows an encrypted connection, which means your users’ data is transported securely. There are several types of SSL certificates, and you can often get one through your domain registrar.
- Site design. The easiest option is to use a free website creation tool—there are a number of free options available. Most are easy even for a newcomer to use, with styles and built-in templates. For a more custom design, you can hire a web designer to work on your website, but this will be much more expensive.
10. File a West Virginia Annual Report
The Secretary of State of West Virginia requires all businesses to file a yearly annual report. Businesses need to file and pay the $25 filing fee between January 1st and July 1st. For new businesses, you’ll file your annual report the year following the calendar year you registered your business. You may file this report online or in person.
Read more about How to File a West Virginia Annual Report.
What if I don’t file an annual report in West Virginia?
If you don’t file your annual report in West Virginia, you run the risk of being fined and having your business administratively dissolved.
11. Apply for Trademarks
A trademark is a design, symbol, word, phrase—or any combination thereof—that represents a brand’s goods or services exclusively. Only some businesses register trademarks.
You can apply to register your trademark with the state of West Virginia or federally with the U.S. Patent and Trademark Office (USPTO). Registering your trademark in West Virginia is cheaper and easier than registering with the USPTO, but doing so only protects your trademark in West Virginia.
You can only register a trademark once you’ve started using it (so slap it on that website you just made). Keep in mind, not all applications are approved. Trademark law is complex, and the strength of a trademark application (and the trademark itself) depends on many factors.
Our attorneys can review your application, offer advice, and prepare and submit the application for you—Check out our Trademark Service.
How do I register a trademark in West Virginia?
To register a trademark in West Virginia, you’ll need to file a West Virginia Application for Trademark or Service Mark ($50). You will also use the same application for trademark renewals. You’ll need to include a description of the goods and services your trademark is used to advertise on the application. A description of the mark is also required, along with the date of the first use. You can’t register a trademark before you use it.
Registering your trademark with the West Virginia Secretary of State only protects your trademark in West Virginia.
Can I register a trademark before I use it?
No. But you can file an application with the USPTO under Intent-to-Use status. This gets your application in line before you’ve actually used the mark, which could be helpful if you’re worried someone else might register your mark before you’ve had a chance to use it.
For your trademark to become official, you’ll eventually need to show proof that you’re using it. An Intent-to-Use application buys you some time to do that.
Learn more about filing an Intent-to-Use Trademark.