Individuals who are licensed to work in certain professions may apply to form a professional limited liability company or (PLLC) in West Virginia. Professionals can form a PLLC to protect themselves from certain business-related liabilities while enjoying individual tax benefits. If you’re wondering how to form a West Virginia professional limited liability company, this article will summarize the process.
In a PLLC, professionals can take advantage of the pass-through tax entity status, meaning that the company’s profits aren’t first taxed at the business level before being distributed to the individual members. This avoids “double taxation” experienced by a corporation.
PLLC members are also eligible for certain liability protections. These protections help ensure that a member’s assets aren’t targeted in the event of a claim or lawsuit against another individual within the company. Due to professional licensing standards, the steps needed to form a PLLC in West Virginia are more slightly complex than what’s required to form a standard limited liability corporation (LLC).
Who can form a West Virginia professional limited liability company?
West Virginia allows licensed professionals to form a PLLC. A few examples of qualifying professions include architects, chiropractors, attorneys, land surveyors, accountants, social workers, doctors, and dentists. For the PLLC to operate, all members must work within compatible professions.
Choose a name for your West Virginia PLLC
In West Virginia, the words “professional limited liability company,” “professional L.L.C.,” “professional LLC,” “PLLC,” or “P.L.L.C.” needs to be included in the name of your business. Take the time to select a unique name that helps your PLLC stand out. You’ll want to verify that the selected name for your PLLC isn’t used by another company by searching the Secretary of State’s business name database.
If you found an available name but aren’t yet ready to file, you can reserve it through the Secretary of State website. Or, ZenBusiness can do it for you. We can reserve your business name for up to 120 days while you finalize the details for forming your PLLC. ZenBusiness can also help you set up a domain name registration quickly and easily so you can proceed to the next stage of forming your PLLC.
Select a West Virginia registered agent
A registered agent in West Virginia ensures that your organization receives the necessary documents needed to manage your PLLC and maintain active business status with the Secretary of State. Agents also receive service of process in the event of legal action against your company. The designated registered agent must be a West Virginia entity and be available to accept correspondence during normal business hours at a physical address.
Registered agents serve as a point of contact between the state government and your PLLC. If you need help, ZenBusiness can connect you with a registered agent in your area to maintain compliance with applicable laws and regulations while saving time and eliminating the need for you to be on-site all day.
Complete and file West Virginia Articles of Organization
The Articles of Organization and Verification of Eligibility include all of the necessary documentation to apply for PLLC status. In West Virginia, you can download an application or apply directly on the West Virginia Secretary of State website.
During this process, you’ll need to determine how you’ll manage your PLLC. Member-managed occurs when members oversee the day-to-day activities of your PLLC and make decisions on the PLLC’s behalf. Manager-managed occurs when you appoint a member(s) or hire an individual(s) from outside the PLLC with or without a stake in ownership to manage your PLLC.
The Articles of Organization provides the necessary information the state of West Virginia needs to make your PLLC official. A registration fee is required, which is payable by check if applying via mail or electronically if applying online.
Handle West Virginia tax obligations
Your PLLC will likely need to secure a federal Employer Identification Number (EIN), especially if you have multiple members or employees. You can obtain this from the IRS yourself or have ZenBusiness do it for you with our EIN service. Some PLLCs in West Virginia may need to register to pay state and local taxes, as well.
Additionally, annual reports are required no later than July 1st. You can submit reports online through the West Virginia Secretary of State website by paying a $25 fee. Failing to submit an annual report on time may result in hefty fines, administrative penalties, or the dissolution of the entity. Our worry-free compliance service can help you meet these requirements.
Obtain West Virginia business licenses and permits
Each member of a PLLC is required to have a valid professional license from the West Virginia Association of Licensing Boards or another state regulatory authority. It’s important to note that licensing requirements vary among professions. Likewise, federal, state, and local agencies may have different regulations governing business licenses.
PLLC members should endeavor to stay up-to-date with changes to license requirements and permits. Our business license report service is another helpful tool for determining these requirements.
Acquire insurance for your West Virginia PLLC
PLLCs in West Virginia may be required to provide a certificate demonstrating that the company maintains appropriate insurance. Requirements and recommendations may vary by industry. If you have employees, you will be required to have workers’ compensation insurance and pay unemployment taxes.
Malpractice and general liability insurance are also recommended for professional groups. For example, most health care professionals in West Virginia carry medical professional liability insurance valued at $1 million per occurrence even though it’s not required.
PLLC members aren’t protected from professional malpractice claims through the business structure since they are still responsible for the quality of their services. Also, members can be held personally responsible for certain business debts as well as the conduct of others in the organization. PLLC members should explore professional malpractice insurance as well as a general business owners’ policies to protect themselves from various possible liabilities.
Open a business bank account
Once you’ve formed your PLLC in West Virginia, the next step is to open a bank account for the business. Be sure to bring all relevant documents and have your EIN on hand to proceed. All PLLC owners should be present to open the account. Without a separate account, your assets are at risk of becoming entangled with your business finances.
In the event of an audit, assets could be seized to collect an unpaid business debt. A business account may help to insulate you from financial liability. Creating a bank account reserved for PLLC use may also simplify payroll taxes and accounting.
Ready to kick-start your business?
At ZenBusiness, we are proud to support small businesses through a variety of different tools and services. Whether you need a registered agent service, want to reserve a business name, or are looking to register a domain name, our goal is to help you stay on the road to success. Check out our services and contact us today to see how we can help you grow your company.
West Virginia PLLC FAQs
What are the filing fees for a West Virginia PLLC?
The filing fee for the Articles of Organization via mail or Internet is $100. Payments can be made online or by check if you’re filing by mail.
Do I need a lawyer to form a West Virginia PLLC?
No. An attorney is not required to apply for PLLC status.
Does West Virginia have a Professional Corporation (PC) entity?
Can professionals from different fields form a West Virginia PLLC together?
All individual members of the PLLC must share the same profession or provide compatible services.
How will I be taxed as a West Virginia PLLC?
By default, PLLCs in West Virginia are taxed as a pass-through business entity, meaning profits are only taxed on the individuals’ tax returns without first being taxed at the business level.