WHAT
YOU NEED TO KNOW ABOUT STARTING A BUSINESS IN HENRICO COUNTY,
VIRGINIA
www.co.henrico.va.us
There
are certain procedures that need be followed when starting
a business. This brochure gives an easy-to-understand, brief
overview of starting a business in Henrico County. It is
NOT intended for use without involvement by or discussion
with your Certified Public Accountant and attorney and your
other important financial advisors. The forms and deadlines
discussed here incur substantial penalties if not timely
filed. Always consult professional advisors before starting
any business venture. The use of this brochure without their
substantial input can be hazardous to your wealth.
THE
BUSINESS ENTITY
Perhaps
one of the most important steps is choosing the type of
entity structure for your business, as it will determine
how you will keep your records and how you will be taxed.
Sole
Proprietorship:
A sole proprietorship is a type of business entity which
is unincorporated and consists of one person, who pays tax
on all income and is personally liable for all losses and
liabilities.
Partnership:
A partnership is an entity formed by two or more persons
contributing abilities, money, and other assets. In a general
partnership, the partners are liable for all debts. Each
partner pays tax on his or her share of the income.
Corporation:
A corporation is a separate legal entity from its owners.
The three main characteristics of a corporation are 1) limited
liability, owners can only lose their investment in the
corporation, 2) easy transfer of ownership through the sale
of stock and, 3) continuity of existence. A corporation
can be either an "S" corporation or a "C"
corporation. An S corporation has fewer than 75 stockholders
and income tax is paid once, at the individual level. If
a corporation is not an S corporation, it is a C corporation.
A C corporation, on the other hand, is taxed at the corporate
level and stockholders are also taxed on any dividends taken
by shareholders.
Limited
Liability Company:
The limited liability company (LLC) income tax is paid by
the "members," not the company. With an LLC, the
personal liability of its owners is more limited and, unlike
an S corporation, an LLC can have more than 75 stockholders,
which may be corporations and foreigners.
SOME COMMON FEDERAL AND STATE FORMS
-
Form
SS-4 is used to obtain a Federal Employer Identification
Number (EIN) and is filed with the Internal Revenue
Service.
-
Certificate
of Assumed Name needs to be filed with the Clerk
of the Circuit Court in the city or county in which
your business is located if it will have a name other
than the legal business name.
-
Articles
of Incorporation and a charter fee need to be filed
with the State Corporation Commission.
-
Articles
of Organization and a filing fee need to be filed
with the State Corporation Commission.
-
Form
VEC-FC-27 needs to be filed with the Virginia Employment
Commission if your business is subject to unemployment
tax.
-
Form
R-1 needs to be filed with the Virginia Department
of Taxation if corporate income tax, sales tax, employer
withholding tax or any other state tax applies to the
operation of the business.
-
Form
2553 needs to be filed with the IRS by the 75th
day of an S corporation’s existence.
WHAT FORMS DO YOU NEED?
Sole
Proprietorship
Form
SS-4, if you have at least one employee; sole proprietorships
are not required to file with the State Corporation Commission
or with the Clerk of the Circuit Court, unless you need
to file a Certificate of Assumed Name; Form VEC-FC-27 and
Form R-1, if applicable
Partnership
Form
SS-4; a partnership also must file Articles of Partnership
with the Clerk of the Circuit Court where the business will
be located; and, if applicable, Certificate of Assumed Name,
Form VEC-FC-27 and Form R-1
Corporation
Form
SS-4; Articles of Incorporation; Form R-1 and if applicable,
Certificate of Assumed Name, VEC-FC-27, and Form 2553 (If
"S" status elected)
Limited
Liability Company
Form
SS-4; Articles of Organization; and if applicable, Certificate
of Assumed Name; Form R-1 and Form VEC-FC-27
APPLICATION
FOR A LOCAL BUSINESS LICENSE
If
your business will operate in Henrico County, you need to
complete a County of Henrico Business License Questionnaire,
available from the Henrico Department of Finance, License
Section. You must apply for your business license before
actually engaging in any commericial activity. This form
is available on the Henrico County website or can be obtained
from the West or East Government Building. You must also
file a Planning and Zoning Form with Henrico County. If
your business operates under a tradename, the name must
be registered with Henrico County and requires a $10 fee.
The
tax liability will be based on either a flat rate or an
amount per $100, depending on the type of business. Usually,
the total tax owed is calculated based on a business’s gross
receipts or gross purchases (for a wholesale merchant) from
the previous year. Some of the basic classifications of
business types not subject to a flat rate of tax are professional
services, business and miscellaneous services, commission
merchant, hotels and motels, personal service, retail merchant,
and contractor. The flat rates also vary by business classification.
It is acceptable to have more than one business license
for each segment of the business, which would be subject
to various tax rates. You must renew licenses each year
by March 1.
Additionally,
you might also want to contact other state agencies, such
as the Alcoholic Beverage Control Board, Department of Health,
Department of Housing and Community Development, Virginia
Department of Occupational Regulation, Department of Labor
and Industry, and some other departments which may have
other requirements for your particular type of business.
BUSINESS PERSONAL PROPERTY TAX
You must
also file, by March 1, a County of Henrico Business Return
of Tangible Personal Property. On the form you will list all
furniture, equipment, tools, office machines, signs, and other
property used in the operation of your business. The tax due
is based on the purchase cost of the property and the time
you have owned it. You not only pay tax the year you purchase
property, but for each year it remains in use. The base tax
rate is currently $3.50 for per $100 of assessed value.
Manufacturers
in Henrico are exempt from business licenses, but must still
pay business personal property tax on all machinery and
tools.
WHAT
IS THIS PLACE CALLED HENRICO COUNTY?
Henrico
was formed in 1611, four years after Jamestown was settled,
when Sir Thomas Dale explored the James River and discovered
Farrar’s Island at Dutch Gap. He named it Henricus, for
Prince Henry Frederick, the oldest son of King James I.
It only took four months after the discovery of Henricus
for it to become a community. Henrico County originally
extended to the Pacific Ocean. Called Henrico and greatly
expanded geographically since 1611, this area around the
original town on the James, remains a bustling, ever-growing
county today.
Some
of the most developing parts of the county for primarily
retail and office space include the West Broad Street area,
especially in Glen Allen, near Innsbrook. The Henrico County
Department of Economic Development is available for help
in finding a location for your kind of business. The department
suggests, for office buildings, the new Concourse at Wyndham
and Park Central just east of Route 1. Henrico also has
agricultural and manufacturing operations within its boundaries.
Industrial facilities are primarily located in eastern Henrico
County.
IMPORTANT
PHONE NUMBERS
INTERNAL
REVENUE SERVICE
(800)
829-1040
FOR
FEDERAL TAX FORMS
(800)
829-3676
VIRGINIA
DEPARTMENT OF TAXATION
(Richmond
District Office)
(804)
367-8037
STATE
CORPORATION COMMISSION
(804)
786-3733
VIRGINIA
EMPLOYMENT COMMISSION
(804)
786-7159
CLERK
OF THE CIRCUIT COURT
(804)
501-4767
BUSINESS
LICENSE SECTION
(804)
501-4310
BUSINESS
PERSONAL PROPERTY
(804)
501-4310
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