How to Start a Business in West Virginia
There are multiple steps when you want to start a business in West Virginia and as a small business owner, you might be feeling overwhelmed.
But don’t worry, we’ve broken down the steps to walk you through turning your idea into a successful business.
Step 1: Create a Business Plan
The first step is to develop your business idea into a detailed business plan. This doesn’t have to be a formal document, but there are some important details to think about before you jump in.
Once you have a business idea, you should decide whether to work by yourself or to have business partners.
If you get stuck working on your business plan, you can contact the local office of the Small Business Administration for help: West Virginia District Office.
You should decide other details during this first step, such as your:
- business model
- marketing ideas
- business address
Your business model is how you plan to make money – what you will sell, how is it made and delivered, etc. Your business plan should consider your business location, and whether or not you will run your business online.
Think about whether you plan to hire employees. And you should conduct market research to ensure your business has a good chance of success.
Review the NAICS codes list to find the standard name for your industry. Selecting your industry ahead of time is important. Applications for business licenses and tax registrations often ask for this information (or the NAICS code). Choosing your industry upfront will reduce confusion when you complete those forms.
It’s a good idea to think of marketing ideas early on to help your business succeed. A good marketing plan can include developing a logo and brand name, deciding how and when to advertise, building a website, and developing a social media strategy.
You should choose a primary business address. This can be an actual office address, but it doesn’t have to be. It could be your home address or one of your business partners’ home addresses. You could even rent a mailbox or a PO box. The purpose is to have one designated address where all mail for the business is sent, and that you can use on official documents.
Step 2: Choose a name for your business
The next step is to choose a West Virginia business name. We recommend taking your time to choose a business name people will remember and positively associate with your business.
The best names are:
- easy to spell
- easy for people to remember
- easy to pronounce
- original and unique
- not too many words
- not easily confused with other businesses
For additional business name tips, check out how to choose a business name.
After you’ve thought of a few business names, you should search them on the West Virginia Business Entity Search page to make sure they are available. This is because two entities can’t have the same business name in the same state.
Search for your domain name
We recommend coming up with a business name that’s available as a domain name and as a social media username.
It’s okay to look at variations of your business name. Because the domain name and social media username don’t need to exactly match your business name.
You can search for domain names with GoDaddy below.
Find a domain name
Tip: If you need help coming up with more names, check out TRUIC’s Business Name Generator.
Step 3: Choose your business structure
Next, you’ll need to select a type of legal business entity for your West Virginia business.
The most common structures for West Virginia companies are:
- Sole Proprietorship
- Limited Liability Company (LLC)
A Sole Proprietorship in West Virginia (aka Sole Prop) is an informal business structure with one owner.
This business structure isn’t a separate legal entity. Instead, it happens when you operate your business as yourself.
The advantage of Sole Proprietorships is that they are easy to set up. You don’t have to file a document to “form” your Sole Prop with the state. But you still must apply for a Business Registration Certificate from the West Virginia State Tax Department.
Another benefit is that Sole Proprietorships have pass-through taxation. This means the owner reports the business income or loss on their personal tax return.
The disadvantage of a Sole Prop is that the owner is personally responsible for the business debts and liabilities (there’s no personal asset protection).
A West Virginia General Partnership (aka Partnership) is similar to a Sole Proprietorship, but this informal business structure has 2 or more people. You don’t have to file a document to “form” your Partnership with the state. But you still must apply for a Business Registration Certificate from the West Virginia State Tax Department.
Like a Sole Proprietorship, the advantage of a Partnership is pass-through taxation. This means the owners report the business income or loss on their personal tax returns.
The disadvantages of a General Partnership are that they require more paperwork to set up, and the owners are personally responsible for the business debts and liabilities.
A West Virginia Corporation is a formal business entity that must have a board of directors, corporate officers, and shareholders.
The advantage of a Corporation is liability protection for the owners. The disadvantages are added complexity of management, double taxation, and the requirement to hold annual board meetings.
Additionally, Corporations aren’t very common for most small business owners. They are more commonly used by companies that are looking to raise capital, take the company public, or have large healthcare expenses.
An example of companies that operate as Corporations are high-growth technology and startup companies.
Limited Liability Company (LLC)
A West Virginia LLC is a hybrid business entity that combines the benefits of a Corporation and a Sole Proprietorship or Partnership.
Meaning, LLCs have personal liability protection for their owners. If the business is sued, the personal assets of the owners are protected.
LLCs also have pass-through taxation, and therefore avoid the double taxation that Corporations have.
LLCs are also a lot easier to set up and maintain than Corporations. For these reasons, LLCs are the most common choice for small businesses.
For more information, please see LLC vs Sole Proprietorship vs Corporation.
Step 4: Register your business with the West Virginia Secretary of State
Depending on which business structure you choose, you may need to file paperwork with the West Virginia Secretary of State and the State Tax Department. You’ll file formation documents with the Secretary of State to create your company, and then all businesses must obtain a Business Registration Certificate from the State Tax Department.
West Virginia LLC
To create a West Virginia LLC, you’ll need to file the West Virginia Articles of Organization.
The filing fee to form a West Virginia LLC is $100 to file your Articles of Organization. You will also need to apply for the Business Registration Certificate, which costs $30.
Note: Hiring a Registered Agent in West Virginia isn’t required when forming an LLC. However, you can still hire Registered Agent Services to help you start your company and receive legal mail on your behalf, if you want to.
West Virginia Corporation
To create a West Virginia Corporation, you’ll need to file the Articles of Incorporation (Form CD-1). This form can be filed online or by mail.
The filing fee to form a West Virginia Corporation is $100. You will also need to apply for the Business Registration Certificate, which costs $30.
West Virginia Sole Proprietorship
If you want to operate as a Sole Proprietorship in West Virginia, you don’t have to file any paperwork with the Secretary of State. However, you will still need to apply for the Business Registration Certificate, which costs $30.
West Virginia Partnership
If you want to operate as a Partnership (aka General Partnership) in West Virginia, you don’t have to file any paperwork with the Secretary of State. However, you will still need to apply for the Business Registration Certificate, which costs $30. And the Partnership needs to get an EIN from the IRS.
West Virginia DBA (Trade Name)
If you want to do business under a name that’s different than your business’s true and legal name, you should file a DBA (aka “Trade Name”).
Using a DBA can be helpful for branding and marketing.
In West Virginia, business entities like LLCs and Corporations can file an Application for Trade Name with the Secretary of State using Form NR-3. The filing fee is $25.
Informal business entities like Sole Proprietorships and Partnerships file a Trade Name Registration with the Secretary of State using Form TN-1. There is no fee ($0) to file Form TN-1.
Need to save time? We recommend hiring MyCompanyWorks ($99 + state fee) to file your DBA.
West Virginia Secretary of State
If you have any questions about registering your company, you can contact the West Virginia Secretary of State Business Division.
Step 5: Get an EIN Number
An EIN Number (Federal Employer Identification Number) is also known as a Federal Tax ID Number. It is used by the Internal Revenue Service (IRS) to identify your business for tax purposes. You need an EIN Number in order to apply for the West Virginia Business Registration Certificate.
An EIN Number will also be used to open a business bank account.
You can get an EIN for your West Virginia business by mail, fax, or online. Getting your EIN online is the fastest option, since it only takes about 15 minutes to complete the application.
For instructions on how to complete the EIN application for a West Virginia LLC, please see West Virginia EIN Number.
Step 6: Open a business bank account
After your business structure is set up, it’s a good idea to open a separate business bank account.
This is important because it keeps personal and business accounts separate. Personal and business expenses should be paid from these separate accounts.
All of this helps protect your personal assets. And it makes accounting and bookkeeping easier for your business.
Once the account is opened, the bank will give you a debit card. And you can also get a business credit card to earn rewards if you’d like.
And if you need business funding, the bank may be able to help.
Tip: To keep your personal finances and business finances organized, we recommend using a tool like Quickbooks, Mint, or a simple spreadsheet.
Step 7: Business license and permits
After starting your business in West Virginia, you may need to obtain a business license or permit.
All West Virginia businesses must get a Business Registration Certificate from the State Tax Department. The Business Registration Certificate acts as a general business license, and allows you to conduct business in West Virginia.
Part of the Business Registration process is registering for Unemployment Compensation with WorkForce West Virginia. Your West Virginia business must do this even if you don’t have employees.
And your business might need other licenses and permits. Your requirements are determined by the industry you are in and where your West Virginia business is located.
You can reference our West Virginia business license page to help determine which licenses and permits your business may need.
Tip: Save time by hiring an expert. We recommend using IncFile ($99) to handle the business license research for you.
West Virginia Sales Tax
If you sell products to people in West Virginia, you may need to collect sales tax and file a Sales and Use Tax Return. You can get the return forms from the West Virginia State Tax Department. West Virginia also has sales and use taxes at the municipal level (cities and towns).
You can read more information about West Virginia sales and use tax from these West Virginia State Tax Department resources:
If you have any questions, you can contact the West Virginia State Tax Department at 304-558-3333. Their hours are 8am – 5pm Eastern Time, Monday through Friday.
Step 8: Income taxes
Depending on your business, you’ll likely need to file federal, state, and local business taxes. Most people are familiar with federal tax obligations to the IRS, but it’s important to pay state taxes to keep your business in good standing.
You can file these yourself or you can hire a business accountant for help. Check out our How to find an accountant guide.
Step 9: Purchase Business Insurance
For most business owners, business insurance isn’t required, however, it may be a good idea.
The main type of business insurance is called General Liability Insurance. This covers accidents that occur at your place of business, like property damage and personal injury.
Your business may also want specialty insurance like Professional Liability Insurance (for example, Errors and Omissions Insurance or Malpractice Insurance). These provide coverage for more specific claims that arise from professional services (like claims against accountants, consultants, and healthcare providers). If you have employees, you will also need to obtain Workers Compensation Insurance and Unemployment Insurance.
Starting a West Virginia Business FAQs
On the other hand, if you want to operate as a Limited Liability Company (LLC) or Corporation, you’ll need to file paperwork with the state. Included within this paperwork will be your business name, your Registered Agent’s information, and your business address.
After you choose your business structure, you must get a Business Registration Certificate from the West Virginia State Tax Department. Once you have this business license, you can then open a business bank account and begin your operations.
You will need a Business Registration Certificate, whether you run your business from home or from an office or rented space.
Sole Proprietorship: You don’t have to file anything with the Secretary of State, but you will pay $30 for the Business Registration Certificate from the State Tax Department.
General Partnership: You don’t have to file anything with the Secretary of State, but you will pay $30 for the Business Registration Certificate from the State Tax Department.
Limited Liability Company: A West Virginia LLC costs $100. This is the fee to file the LLC Articles of Organization with the Secretary of State. And you must pay $30 for the Business Registration Certificate from the State Tax Department.
Corporation: Filing the Articles of Incorporation with the Secretary of State costs $100. And you must pay $30 for the Business Registration Certificate from the State Tax Department.
And certain professions may require an occupational license. Plus, municipalities have different license and permit requirements. It’s important to check with your city or county about business license requirements.
How much does it cost to get a Small Business License in West Virginia?
The Business Registration Certificate costs $30 for each location or business name.
However, your business may need an occupational license or municipal license or permit to operate. The filing fees for licenses will vary depending on where you’re doing business and which industry you’re in.
And you might not need these other business licenses at all, so your cost may just be the $30 fee for the Business Registration Certificate.
Unfortunately, we can’t say what your other business license costs would be, because it depends on several factors and the cost of West Virginia licenses varies.
Does a Sole Proprietor need a business license in West Virginia?
Yes. Every business that operates in West Virginia, including a Sole Proprietorship, must get a Business Registration Certificate from the West Virginia State Tax Department.
However, the most important factors in deciding where to start a business are where you live and where you’re doing business.
Meaning, if you live in or do business in the state of West Virginia, then you should start your business there. While many websites talk about tax rates and advantages of certain states, none of that applies if it’s not the state where you live and do business.
For example, if you form an LLC in Delaware, but live in and conduct business in West Virginia, you’ll also need to register your Delaware LLC in West Virginia (and pay fees). And you’ll end up paying West Virginia taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you live in and do business in West Virginia, then yes, West Virginia is the best state to form an LLC. If you don’t live in and do business in West Virginia, then no, West Virginia isn’t a good state to start a business.
West Virginia Small Business Development Center
West Virginia Secretary of State: Start My Business
West Virginia Secretary of State: Register Your Business
West Virginia Secretary of State: Research Your Business Plan
West Virginia Secretary of State: New Business Startup Wizard
West Virginia Secretary of State: Start a West Virginia Business