To get a business license in Virginia, you’ll assemble several registrations rather than fill out one form. Most businesses need a federal Employer Identification Number, entity registration with the Virginia State Corporation Commission (if you’re an LLC or corporation), a local Business, Professional, and Occupational License (BPOL) from the city or county where you operate, registration with Virginia Tax, and a professional license from a state board if your industry requires one. Skipping the pieces that apply to you isn’t a paperwork gap. Operating without a required local license is unlawful under Virginia Code ยง 58.1-3700, and localities can add a penalty of 10% of the tax you owe.1Virginia Code Commission. Code of Virginia 58.1-3700 – License Requirement
The order below is the order that actually works. Each step tends to require something from the step before it.
Step 1: Get Your Federal EIN
Almost everything else in this process asks for an Employer Identification Number. You need one if you operate as a partnership, LLC, or corporation, and also if you plan to hire employees or pay certain excise taxes.2Internal Revenue Service. Employer Identification Number The IRS issues EINs for free through an online application and returns the number immediately.3Internal Revenue Service. Get an Employer Identification Number Do this before you file with the SCC, Virginia Tax, or your local Commissioner of the Revenue. Sole proprietors with no employees can technically use a Social Security number in some places, but an EIN keeps that number off applications.
Step 2: Register Your Business Entity With the SCC
If you’re forming a corporation, LLC, or limited partnership, you must register with the Virginia State Corporation Commission. Sole proprietors and general partnerships skip this step unless they want to operate under a trade name.
Filings go through the SCC’s Clerk’s Information System (CIS), the online portal for formation documents.4Virginia State Corporation Commission. Business Home The filing fee for a new Virginia LLC is $100.5Virginia State Corporation Commission. Virginia Limited Liability Companies Corporation charter fees are based on the number of authorized shares in the articles of incorporation. Your entity name has to be distinguishable on SCC records from every other registered business name in the state.6Virginia Code Commission. Code of Virginia 13.1-1012 – Name You can search the CIS before filing to confirm the name is available.
Fictitious Name Registration
Planning to operate under a name that isn’t your legal name or your registered entity name? File a fictitious name certificate. Since January 2020, these filings go through the SCC Clerk’s office rather than local circuit courts.7Prince William County. Fictitious Name (Trade or Assumed) This applies to sole proprietors, partnerships, and LLCs using a trade name.
Annual Registration Fees
Every Virginia LLC pays a $50 annual registration fee, due by the last day of the month the LLC was formed. Miss it and the SCC adds a $25 penalty. Corporations owe an annual registration fee too, with a late penalty of 10% of the fee (minimum $10).8Virginia State Corporation Commission. Maintaining Your Business Both can be paid online through the CIS. Let these lapse long enough and the SCC will cancel the entity, which is a much bigger problem than the fee itself.
Step 3: Register With Virginia Tax
Registering the entity with the SCC does not register you for state taxes. That’s a separate step, and it trips up new owners often. Register with the Virginia Department of Taxation for each tax type your business will owe: income tax withholding if you have employees, retail sales and use tax if you sell tangible goods, and any others that apply.9Virginia Tax. Register a Business in Virginia
Registration is done online at Virginia Tax’s website. Have your federal EIN, legal business name and address, entity type, NAICS code, and your intended start date for each tax type. Once you’re done, you’ll get your Virginia Tax account number and, if applicable, a sales tax certificate. Businesses that can’t register online (missing FEIN, reopening a closed account, and a few other situations) can submit Form R-1 by mail instead.9Virginia Tax. Register a Business in Virginia
Employer Registration With the VEC
Hiring employees adds one more registration. The Virginia Employment Commission (VEC) handles unemployment insurance tax, and you can register with the VEC at the same time as Virginia Tax. A general employer becomes liable for unemployment tax once quarterly payroll reaches $1,500 or more, or once any employee works 20 weeks or more during a calendar year.10Virginia Employment Commission. Employer Information Agricultural, domestic, and nonprofit employers have different thresholds.
Step 4: Apply for Your Local BPOL License
When people say “business license” in Virginia, they usually mean the BPOL. It’s a local license tax that most cities and counties impose on businesses operating within their borders under authority granted by state law.11Virginia Code Commission. Code of Virginia 58.1-3703 – Counties, Cities and Towns May Impose Local License Taxes The tax is based on gross receipts, and rates vary by locality and business category.
State law limits the reach of the tax for smaller businesses. Localities cannot impose the BPOL tax on businesses with gross receipts below $100,000 in localities with a population over 50,000, or below $50,000 in localities with a population between 25,000 and 50,000.12Virginia Code Commission. Code of Virginia 58.1-3706 – Limitation on Rate of License Taxes Some localities set the exemption even higher. Falling below the tax threshold usually still means you have to register and obtain the license, just without owing tax.
How to Apply
Apply through your local Commissioner of the Revenue’s office, not the state. Most localities take applications online through the city or county portal, and also accept mail or in-person filings. You’ll need your EIN (or Social Security number for sole proprietors), business address, a description of your activities, and either your prior year’s gross receipts or a projection for a new business.
Zoning clearance is often required before the BPOL will be issued. Your location has to be approved for commercial use under local zoning ordinances. Running the business from home usually means a separate home occupation permit. This step adds time and sometimes a fee, and it’s a common reason first-time applicants get delayed.
Penalties for Operating Without a BPOL
Localities can charge a penalty of 10% of the BPOL tax owed for failing to file or pay on time.1Virginia Code Commission. Code of Virginia 58.1-3700 – License Requirement The larger risk is that operating a business that requires a local license without one is unlawful under Virginia law.
Step 5: Add a Professional or Occupational License if Your Industry Requires One
Some industries require a separate state license on top of everything above. The Department of Professional and Occupational Regulation (DPOR) covers dozens of professions, including contractors, real estate agents, and cosmetologists, under Title 54.1 of the Virginia Code.13Virginia Code Commission. Code of Virginia Title 54.1 – Professions and Occupations Health professions like physicians and nurses are licensed through the Department of Health Professions instead.
Contractor licensing shows how granular these rules get. Virginia uses three tiers based on project value:
- Class A covers single contracts of $150,000 or more, or total annual work of $1 million or more.
- Class B covers single contracts between $30,000 and $150,000, or total annual work between $250,000 and $1 million.
- Class C covers single contracts over $1,000 but under $30,000, or total annual work up to $250,000.
Landscape irrigation and water well contractors must hold a license regardless of project value.14Virginia DPOR. Board for Contractors Introduction Each class has its own application, experience requirements, and exam. DPOR applications are submitted through each board’s online portal.
Workers’ Compensation: Not a License, but Often Required
Workers’ comp isn’t a license, but new owners often think it’s part of the licensing bundle, so it’s worth naming. Virginia law requires most businesses with more than two employees to carry workers’ compensation insurance. The definition of “employee” is broad and includes part-time, seasonal, and temporary workers, as well as minors, trainees, and working family members.15Virginia Workers’ Compensation Commission. Employers
Subcontractors change the math. If you hire subcontractors, their employees count toward your total when determining whether coverage is required. A contractor with one direct employee and two subcontractor employees is over the threshold, even if the subcontractors carry their own insurance.15Virginia Workers’ Compensation Commission. Employers This is one of the more common compliance failures in the trades.
Keeping Everything Current
Getting licensed is only half the job. Each authority runs its own renewal cycle. BPOL licenses renew annually, and you’ll report your actual gross receipts from the prior year to your local Commissioner of the Revenue. SCC annual registration fees for LLCs and corporations are due each year on the last day of the formation month.8Virginia State Corporation Commission. Maintaining Your Business DPOR professional licenses typically renew every two years and require continuing education specific to the board.16Virginia Code Commission. Virginia Administrative Code 18VAC10-20-683 – Continuing Education Requirements for Renewal or Reinstatement
Any change to your business name, address, or ownership needs to go to every issuing authority separately. A name change with the SCC does not carry over to your local BPOL or your DPOR license. Treat each agency as its own silo, because that’s how they operate.