Basic Guide to Starting a Business in Prince William County
Step 1: Choosing a Legal Structure for Your Business
Generally Speaking, businesses can be organized as (1) Sole Proprietorships; (2) Partnerships; (3) Limited Liability Companies; and (4) Corporations. Within each of these, there are further legal delineations that can be made.
A sole proprietorship is individually owned. All assets and profits are owned by the sole proprietor, who also assumes all liabilities and debts. This is a common way to organize a “one man shop.” While some sole proprietorships may employ persons beyond the principal/owner, this type of business is usually very small.
Partnerships are owned by two or more people. Partners in a business usually have a legal agreement that outlines how responsibilities and profits are divided as well as how disputes, dissolution and other matters will be handled. Three Common types of partnerships are the General Partnership, the Limited Partnership and the Joint Venture.
Limited Liability Company:
Designed to offer liability protection to owners, while maintaining the flexibility of a partnership, the LLC is often characterized as a “hybrid business structure.” According to The United States Small Business Association (sba.gov), “LLC's must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets; continuity of life; centralization of management; and free transferability of ownership interests.”
Chartered by the State in which it is headquartered, a corporation is a legal entity distinct from its owners. The corporation is party to civil, legal and contractual proceedings, rather than its owners (shareholders) or its Board of Directors. For more information about forming a corporation in Virginia, visit the Virginia State Corporation Commission.
Step Two: Establish your Federal Tax ID Number
The federal government requires all businesses to have an Employer Identification Number, whether or not they have employees. These include corporations, nonprofit organizations, partnerships, plan administrators, trusts and estates.
A Federal Tax Identification number – or Employ Identification Number (EID) – is unique to your business. Applications for an EIN can be made online at irs.gov or via mail. For more information visit the IRS website at irs.gov.
Step 3: Trade Name Registration
Businesses need register a trade name or “fictitious name” if business will be conducted under the owner’s name. Otherwise, a fictitious name must be registered with the appropriate jurisdictions. Businesses must register their fictitious name prior to acquiring a business license and obtaining a certificate of occupancy.
For complete information about the requirements surrounding fictitious name registration visit http://www.pwcgov.org/default.aspx?topic=040052002600004692 or contact the Clerk of the Prince William Circuit Court:
Clerk of the Prince William Circuit Court
9311 Lee Avenue
Manassas, Virginia 20110
Telephone: (703) 792-6045
Step 4: Establish your place of Business
Whether you will be occupying commercial space or operating home-based business, there are applicable zoning and occupancy regulations that must be followed in Prince William County. For complete information and to learn about the regulations that will apply to your business venture, visit http://www.pwcgov.org/default.aspx?topic=020011001140001667 or contact:
Prince William County Planning Office
5 County Complex Court
Prince William, Virginia 22192
Telephone: (703) 792-8154
Fax: (703) 792- 4758
Step 5: Business, Professional, and Occupational License (BPOL)
Note: companies registered with the State Corporation Commission should bring SCC Registration certificate when they apply for BPOL
All businesses (including home-based businesses) operating in Prince William County expecting gross receipts, or purchases in the case of wholesale merchants, to exceed $100,000 in a calendar year, must obtain a Business, Professional and Occupational License (BPOL). The BPOL is an annual county-levied tax based on the gross receipts of the previous calendar year. As a general rule, no expenditures, “pass-through” or other costs of doing business may be deducted from the gross receipts. Businesses pay the BPOL tax based on the tax rate for their business classification.
New businesses (including home businesses) must apply for a license and pay the license fee (or BPOL tax) within 30 days from starting a business in the County. Businesses issued a license for the preceding year must renew their license and pay the license fee no later than March 1.
There is no license fee or business license requirement for businesses who do not expect gross receipts, or purchases in the case of wholesale merchants, to exceed $100,000 for the license year. However, businesses located in a commercial location must apply for a Business License.
TO APPLY CONTACT:
Prince William County Finance Department
1 County Complex Court
Prince William, Virginia 22192-9201
Telephone: (703) 792-6710
Fax: (703) 792-4673