Are you looking to form a professional limited liability company (PLLC) in West Virginia, but you’re not sure how the formation process works? There are several important steps when it comes to creating a West Virginia PLLC that is compliant and able to do business in the state.
What is a West Virginia Professional LLC?
The professional limited liability company (PLLC) is a specialized type of LLC that is intended for licensed professionals to offer their unique services. In West Virginia, PLLCs can be formed for the purpose of rendering services by the following professions: attorneys-at-law, physicians and podiatrists, dentists, optometrists, accountants, veterinarians, architects, engineers, osteopathic physicians and surgeons, chiropractors, psychologists, social workers, acupuncturists, and land surveyors.
The West Virginia PLLC is typically more popular than a professional corporation (PC) because it’s a more flexible business type, but it still includes the personal asset protection and professional qualifications that make the PSC valuable.
PLLCs in West Virginia have relatively simple formation and maintenance requirements, several options for how they want to be taxed, and flexible management. From one-person businesses to multi-member PLLCs with several owners, the PLLC is a popular choice for a reason.
An important detail of the PLLC that differs from a traditional LLC is that liability protection is not shared across all members of the company. For example, if you operate a PLLC for physicians, your business structure does not shield each individual member from malpractice suits. Instead, each member is liable for their own malpractice insurance, and no member is liable for another member’s malpractice.
Forming a PLLC in West Virginia (in 6 Steps)
Step One) Choose a PLLC Name
Your PLLC’s name is often the first impression you get to make on potential customers, and therefore it goes without saying that this is an important step. There are a few different aspects to take into consideration when selecting a name for your business:
In West Virginia, the name of a professional limited liability company must contain the words “professional limited liability company” or the abbreviation “P.L.L.C.,” “PLLC,” “Professional L.L.C.,” or “Professional LLC.”
Another aspect to consider is including language that explains what your business does. For example, if you’re a doctor, put the word “physician” or the initials “MD” in your PLLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.”
Do You Like It?
At the end of the day, this is your business, and you should choose a name that makes you proud. You should also make sure your PLLC name both sounds good when spoken out loud, and looks good when written down.
The most important consideration for naming a PLLC is to not get too attached to any one business name until you know that it is available for use. You can check if a business name is available by using the Business Organization Search tool on the West Virginia Secretary of State’s website. If you want to reserve a business name for future use, you can do so by submitting an Application for Name Reservation to the Secretary of State along with the filing fee of $15. The reservation period is 120 days from the date of filing.
Step Two) Designate a Registered Agent
Every PLLC in West Virginia is required to designate a registered agent, which is the individual or business entity that receives government correspondence on behalf of your business, then forwards those documents to you.
In West Virginia, if your PLLC appoints a registered agent, the registered agent must be (i) an individual resident of West Virginia, (ii) a domestic corporation or another domestic limited liability company, or (iii) a foreign corporation or foreign company authorized to do business in West Virginia.
Without a registered agent, you could lose your good standing with the state of West Virginia, and the state also has the right to dissolve your PLLC if they decide to. In a worst-case scenario, the state could fail to alert you regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.
At the end of the day, we recommend hiring a dedicated registered agent service to handle these requirements. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off public record.
Step Three) File Formation Documents with the State
Once you are ready to form your West Virginia professional limited liability company, you will fill out the Articles of Organization (Form LLD-1)
This is THE document that will register your PLLC with the state. You’ll want to ensure all of the following information is correct on the form:
- Name of your PLLC
- Checked box indicating your company is a PLLC
- Profession for which your PLLC is formed
- Street address of your PLLC’s principal office and mailing address, if different from the street address
- Street address of the initial designated office of your PLLC in West Virginia and the mailing address, if different from the street address
- Name and address of your registered agent, if any
- Email address where business correspondence may be received
- Website address of your PLLC, if any
- Whether you own or operate more than one business in West Virginia
- Name and address of each organizer
- Duration of your PLLC
- Name and address of each member
- Whether your PLLC will be member-managed or manager-managed
- Name and address of each manager, if any
- Whether the members of your PLLC will be liable for debts of the PLLC
- Purpose of your PLLC
- Any optional provisions agreed to by the members
- Effective date of the Articles of Organization
- Contact and signature information
You will need to attach a state licensing board Verification of Eligibility (Form VOE) to the Articles of Organization confirming that your PLLC meets the requirements under West Virginia law to form a professional business organization. You can file your Articles of Organization online through the WV One Stop Business Portal, by e-mail (CorpFilings@wvsos.gov for standard processing and firstname.lastname@example.org for expedited processing), by fax, by mail, or in person.
Cost to Form a PLLC
The filing fee for the Articles of Organization is $100. Expedited processing is available for an additional fee ranging from $25-$500 based on the level of service. Online filings through the One Stop Business Portal also incur a $1.00 processing fee.
Regular processing takes 5-10 business days. One hour, two hour, and 24 hour expedited processing is also available for an additional fee.
Step Four) Create an Operating Agreement
After you register a PLLC in West Virginia, create a detailed outline that explains how you will run and manage your new business. Even though it doesn’t need to be filed with the state, put one together and keep it for your records.
When you open a bank account, you may be asked for a copy of this document. You’ll also want to keep in mind that any future business partners or managing members may also be interested in seeing your operating agreement before joining your company. After all, this document essentially serves as your overall plan for success.
An attorney can help you outline your operating agreement, or you can create one from a free template online. You can read more about operating agreements here, but some of the basic information you’ll want to have includes:
- Individual members' ownership percentages
- Rights and responsibilities
- Voting powers and meeting guidelines
- Allocation of profits and losses
- Management rules for the PLLC
- Provisions for buying a member owner out, or transferring their shares in the case of illness or death
Step Five) Handle Taxation Requirements
The vast majority of PLLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and it’s used for a variety of important PLLC functions.
For instance, you’ll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. You’ll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.
Depending on how your PLLC is classified for tax purposes, it may be subject to corporate income tax in West Virginia. Your PLLC may also need to pay other state taxes based on its business activities, such as sales and use tax. For more information about state business taxes in West Virginia, visit the West Virginia Department of Taxation’s website. You can manage, file, and pay your West Virginia business taxes online through the MyTaxes website.
Depending on where in West Virginia your business is located, you may also need to pay some local taxes. You should contact your local tax authorities to confirm your PLLC’s obligations. If your PLLC is located in one of the four largest cities in West Virginia, you can find local resources and contact information at the following websites: Charleston, Huntington, Parkersburg, and Morgantown.
Step Six) Obtain Business Licenses and Permits
Before conducting any business activities in West Virginia, your PLLC will need to obtain a business registration certificate from the State Tax Department. You can get this certificate online by submitting an application through the One Stop Business Portal or by submitting a paper form to the Tax Commissioner. You should also check with your city and county to confirm if any local licenses, permits, or registrations are required for your business.
In addition, you will need confirm you have all professional licenses needed to render professional services through your PLLC. A list of many state licensing boards is available on the West Virginia Association of Licensing Boards website.
Would You Prefer a Professional Form Your PLLC?
If you would prefer to have a professional handle the paperwork for you, consider hiring an online business formation service.
Because of the often-complex nature of professional limited liability companies, some of our favorite service providers don’t offer PLLC formations, but there are still plenty of quality companies that do provide this service. A couple of our favorites for PLLC formation are LegalZoom and MyCorporation.
Another option would be to hire a business attorney to handle your PLLC formation. While this is certainly a more expensive route than using an online formation service, a lawyer’s expertise could come in handy when you’re forming a specialized business structure like this.
Next Steps: What to Do After Creating a PLLC in West Virginia
Open a business bank account
We highly recommend that you establish a separate business banking account so that your business and personal finances are maintained completely separate. This is important because it helps protect your personal assets and also makes filing taxes much easier. Once you receive your EIN from the IRS, you’ll be able to use it to establish an account at the bank or credit union of your choice.
West Virginia, like most other states, requires employers to maintain workers’ compensation coverage for their employees. This requirement has few exceptions. If you will be hiring any employees for your PLLC, you can learn more about your workers’ compensation insurance obligations on the West Virginia Offices of the Insurance Commissioner’s website. Though not required, it’s probably also a good idea to pursue general liability insurance, as well as some industry-specific policies pertaining to the profession practiced by your PLLC.
Understand income reporting
Income reporting is just what it sounds like – reporting the income you made from your business. It’s important to note that you must file this form whether you made or lost money over the course of the year.
In West Virginia, your income will be reported on an income tax return form. Which form you use will depend on how your PLLC is classified for tax purposes. All income tax return forms and instructions are available on the West Virginia State Tax Department’s website.
Understand annual reporting
Every West Virginia PLLC is required to file an annual report between January 1 and July 1 of each year following the year in which the PLLC was registered with the Secretary of State. The form contains basic information about the PLLC and may be filed either online through the One Stop Business Portal or by mailing in a paper form.
Find an accountant
We don’t recommend that you attempt to manage your business finances without the help of a professional. There is too much room for error, and a professional can ultimately save you time and money by guiding you on how to best manage your business finances. At a minimum, enlist professional help to set you up with software and the steps for keeping up with your finances on a regular basis. Then, consult back with your accountant at least a couple of times per year – and especially at tax time – to ensure you’re keeping track of everything correctly.