What are the legal considerations?
What do I need to do to insure that my business complies with government requirements?
Each business faces unique legal issues relating to the goods or services it provides, which should be the subject of a consultation with a business attorney. There are, however, a number of requirements that apply to all businesses operating in the Historic Triangle area.
Here are the basics:
Business Entity Selection. A fundamental decision is the type of business entity for your business. While "sole proprietorships" or "general partnerships" were once very common, there is virtually no advantage to operating in this fashion, and there may be a number of disadvantages. Setting up a limited liability entity (usually a corporation or limited liability company or "LLC") provides basic protection for your personal assets (although this protection is often overstated), presents a professional "appearance" for your business, and provides a framework for ordering the relationship between business owners. Setting up one of these entities is a fairly simple process of submitting organizational records to the Virginia State Corporation Commission and paying an registration fee. Once the entity is established, additional organizational requirements must be satisfied. A business attorney can determine which apply to your business. Click here for the SCC's business entity registration webpage.
Tax Registration. Your business must obtain a federal tax identification number ("TIN") from the Internal Revenue Service which, in most cases will be a new federal employer identification number ("EIN") that avoids the need to use a personal social security number. In many cases you must also register with the Virginia Department of Taxation. At the local level, you must apply for a business license in each city or county in which you be located, which is primarily a means for assessing and collecting annual business taxes. More information can be found at the following IRS and VDT websites.
Business-specific Permits and Licenses. Depending on your business, there may be Virginia state-level and other licensing requirements that must be satisfied. You should consult with an attorney on these issues. The Virginia Department of Professional Regulation is a good place to start looking for general information:
Insurance. If you have employees, generally you are required to obtain workers' compensation insurance. The penalties for failing to do so can be quite severe. In addition, while it is not typically required, all business should purchase and maintaincommercial general liability insurance that protects against liability for injury to people and property and, if motor vehicles are used in the business, sufficient business auto insurance to protect against injury claims related to use of cars and trucks in the course of business. If you are engaged in a particularly dangerous line of work, there are additional insurance coverage that you should consider purchasing. In some cases, this additional coverage may be a licensing requirement. Click here to view the Virginia Workers Compensation Commission webpage for employers:
Employment Matters. Virginia is an "employment-at-will" state, meaning that an employee may be terminated (or may quit) for any reason, or no reason at all, as long as the reason does not violate certain anti-discrimination laws. Those laws typically have small employer exemptions that make them inapplicable to business with less than a stated number of employees. Compliance with these laws is critically important, and often requires navigating a sea of requirements. Under both federal and Virginia law, employees must be paid an amount no less than the federal minimum hourly wage and, unless certain very specific requirements are met, "time-and-a-half" for all hours worked in excess of forty during any single work week. A number of other federal laws require that family and medical leave be provided, and that certain non-discrimination requirements are met if you choose to provide employee retirement or health insurance benefits. Needless to say, , it is essential to consult with an employment law attorney to make sure you comply with what has become a dizzying array of legal requirements. Here are several links to government resources on these topics:
Alliance Member Attorneys
|Bartlett & Spirn, PLC
757-941-2801 or 2821
|William F. Miller, P.C. Attorney
|Geddy, Harris, Franck
& Hickman, LLP
www.mellettepc.com (focused on health care providers)
|Jackson Lewis LLP
|Johnson, Gasink, &
|Zaremba Center for Estate
Planning & Elder Law
The above local attorneys specialize in business matters and would be happy to provide a no-cost consultation on the matters outlined above