How to Start a Business in West Virginia

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

Federal Taxes

• 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.

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.

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 protected]”).
• 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.

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.

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.