Virginia law makers back in 1991 passed the first set of Virginia LLC laws which offered business owners a new legal entity choice for operating a business in Virginia. Prior to this time, most small business owners operated as a sole proprietor or partnership, both of which offered no liability protection to the owners. While there has always been the alternative of creating a corporation for business, the complication and compliance requirements of a corporationturned away many small business owners.

The LLC in Virginia is a separate entity than its owners and this results in creating a layer of liability protection for the members. For one thing, the limited liability company does not require centralized management or a Board and has no meeting mandates.

While more business people commenced forming an LLC in Virginia for the protection, some still ignored this new option because they did not comprehend exactly what this legal creature was and did not really understand its many benefits. Also, the issue of taxation of an LLC was unclear back then and no one wanted to get in trouble with the Internal Revenue Service.

The tax uncertainty was eliminated in 1997 when the IRS came out with simple rules which allowed an LLC to automatically be entitled to a single layer of taxation. The tax choices and pass through default tax structure made the LLC a very attractive choice for business. In fact, if an LLC was only going to be owned by one person, there was not added tax complexity over a sole proprietorship. Yet, the owners could now get liability protection which was becoming more of a concern as lawsuits have become such an epidemic in this country.

So now, for minimal fees, a Virginia entrepreneur can get liability protection, a simple and easy to run business Based on statistics of the past few years,, the Virginia limited liability company has greatly surpassed the Virginia corporation as the entity of choice for small businesses in the Commonwealth.