How to Move an LLC to Virginia

An out-of-state LLC can change its state of organization to Virginia through statutory domestication. Virginia domestication is a legal transaction that changes an LLC’s state of organization, the state whose law primarily governs the company. An out-of-state LLC, also called a foreign LLC, that domesticates to Virginia becomes a Virginia LLC governed by the Virginia Limited Liability Company Act.

The LLC is otherwise the same business entity before and after the domestication process. Whether the domestication can proceed also depends on the laws of the state the LLC is leaving. To find out whether your LLC qualifies and what the process involves, you can request a free analysis of your LLC move.

Some states use the name conversion for the legal procedure that changes an LLC’s state of organization, also called its domicile. In many of those states, a business can complete a conversion to change its domicile or to change its entity type. The same statutory process can accomplish either goal.

Virginia has two distinct procedures for LLCs. A Virginia LLC domestication changes a company’s domicile only. A conversion changes a business from one entity form to another. For example, a Virginia corporation might convert to an LLC. This article addresses domestications that change an out-of-state LLC into a Virginia LLC.

Why Business Owners Move LLCs to Virginia

A Virginia LLC domestication may make sense if a business owner moves to Virginia or if the owners prefer to have Virginia law govern the company. An owner might transfer an LLC to Virginia for any of the following reasons:

• Convenience. Owners who move to Virginia may find that it is more convenient for the LLC to be primarily governed by the jurisdiction where the owners live. If an LLC’s state of formation is the same as its physical location, administration may be less time-consuming, and a Virginia LLC could enjoy simpler interactions with state government agencies in Virginia.
• Reduced reporting and fees. An out-of-state LLC that domesticates to Virginia may decrease its annual reporting obligations and costs. A company that operates mostly in Virginia but is organized in another state probably pays annual fees in both places. Virginia charges LLCs a $50.00 annual registration fee but does not require annual reports, so a Virginia domestication could end the LLC’s annual reporting burden altogether. The business may save money if a Virginia domestication cuts out the annual fees in other states.
• Tax savings. A business can reduce its overall tax bill by limiting the number of states in which it must pay taxes. Domestication to Virginia may let an LLC avoid taxation by the original state if it results in an insufficient connection, or taxable nexus, between the state and the business. Virginia is an average state for business taxes. An LLC that domesticates to Virginia may lower its tax burden if it no longer has to pay taxes in the old state, especially if the LLC does little business there.
• Legal advantages. A Virginia LLC domestication might be a wise business decision if Virginia law offers advantages over other states. The state government in Richmond offers a variety of tax credits and grants to help small businesses along with tax incentives for employers. Virginia’s Limited Liability Company Act may be a better fit for a company. For example, a business that wants to use the series LLC model may decide to move to Virginia if its current state does not authorize series LLCs.
• Easier hiring of professionals. Legal systems and tax rules are mostly state-specific. A business that needs an accountant, lawyer, or other professional needs someone familiar with the right state’s law. Virginia has a reputation for a highly educated workforce due to its proximity to the nation’s capital and Virginia’s well-regarded universities. A Virginia LLC should have little difficulty hiring attorneys and accountants with expertise in Virginia law. Domesticating an out-of-state LLC to Virginia can help owners who live in Virginia more easily find local professionals with the right expertise. This may bring networking advantages and help the owners form long-term business relationships with local professionals.

Virginia LLC Domestication Requirements

Virginia LLC domestication under Va. Code Ann. § 13.1-1075(A) is not available for every out-of-state LLC. An LLC domesticating to Virginia must comply with both Virginia law and the current state’s law. Virginia law controls the process and documents filed in Virginia and determines the domestication’s legal effects.

The current state’s law governs whether the LLC can domesticate to Virginia (the state must authorize domestication), the content of the written plan of domestication if required, the standard under which the LLC’s members or managers must approve the plan of domestication, and the effective date for the domestication.

Eligibility for Virginia LLC Domestication

An LLC considering domestication to Virginia must confirm that it is eligible for the process. The principal requirement is that the current state must authorize LLC domestications. Not all states do. The current state may call the process domestication, conversion, or another name. The important part is that the state must have a statutory procedure that lets an LLC organized in that state change its domicile to a new state.

Business owners must also review the LLC’s articles of organization and operating agreement to ensure there are no provisions that prevent domestication to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

An out-of-state LLC must also confirm that Virginia lets LLCs engage in the company’s field of business. Virginia allows most business areas. However, if Virginia prohibits the type of business in which the company is engaged, it should not domesticate to Virginia.

Virginia Professional Limited Liability Companies

Virginia has special rules for LLCs that engage in qualified professional services, which are services that require a license, certification, or other legal authority to provide. Examples of professional services include architecture, professional engineering, healing arts, public accounting, and law.

Virginia LLCs that provide professional services are called professional limited liability companies or PLLCs. A PLLC must focus on one professional service or a combination of certain complementary services and only provide the services through licensed practitioners. A PLLC’s members must only be individuals with the necessary license or certification.

An out-of-state business that offers services requiring a license in Virginia should ensure that it has all necessary licenses and meets all requirements for Virginia professional limited liability companies before beginning a Virginia domestication.

Required Documents for Virginia LLC Domestication

The Virginia LLC domestication process involves preparing and adopting several domestication documents that must satisfy both states’ requirements. The domestication documents memorialize the terms of the domestication and control the company when the domestication takes effect.

• Plan of Domestication. A Plan of Domestication designed to comply with the requirements of both Virginia law and the law of the state that the LLC is moving from.
• Articles of Domestication. The Virginia Articles of Domestication with all information and any related documents needed for filing with the State Corporation Commission of the Commonwealth of Virginia.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, or a similar term.
• Virginia Articles of Organization. The Virginia Articles of Organization for filing with the Virginia State Corporation Commission.
• Virginia Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a Virginia LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Virginia organizational documents as the LLC’s governing documents.

The Articles of Domestication and Articles of Organization accept electronic signatures under Virginia law. Filing through the State Corporation Commission of the Commonwealth of Virginia allows e-filing for electronically signed documents.

The LLC also completes several administrative tasks to implement the domestication. These include conducting a preliminary name search with the State Corporation Commission to determine whether the LLC’s name is available in Virginia (if the name is unavailable, a slight name change may be required);

Obtaining signatures on the Articles of Domestication and Articles of Organization; filing both documents with the State Corporation Commission; and filing domestication documents with the secretary of state or equivalent agency for the state that the LLC is moving from.

Cost of Moving an LLC to Virginia

The cost of moving an LLC to Virginia depends on the scope of work described above. The documents and filings require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity. Professional preparation and state agency coordination are the primary cost drivers. To find out what your specific move will cost, you can request a free analysis of your LLC move.

In addition to professional service costs, the State Corporation Commission of the Commonwealth of Virginia charges a total filing fee of $200.00 for out-of-state LLC domestications to Virginia. The total fee amount consists of $100.00 for the Articles of Domestication and $100.00 for the new Virginia Articles of Organization.

The fees paid to Virginia are in addition to any filing fees that must be paid to the LLC’s original state. Most states charge a separate fee for LLCs domesticating out of state.

An out-of-state LLC that domesticates to Virginia will also incur labor costs and registered agent fees. Labor costs are the amounts charged by the service provider the LLC retains to manage the Virginia domestication.

Service providers may charge a flat fee or charge by the hour, with fee amounts varying by provider. Work that goes into a domestication includes obtaining and organizing information, drafting the domestication documents, communicating with the business owners and state agencies, and filing domestication documents with state agencies.

Virginia requires every LLC to have a registered office in Virginia and a registered agent on file with the State Corporation Commission. An LLC’s registered agent has legal authority to accept service of process, official communications, and other legal documents on the company’s behalf.

A registered agent must be a Virginia resident who is a member or manager of the company; a Virginia resident who is an authorized representative of a business entity that is the LLC’s member or manager; a corporation, registered LLP, or LLC (other than the company itself) with authority to do business in Virginia; a Virginia resident who is an officer of the LLC and is available to accept service during regular business hours; or a Virginia-licensed attorney.

Virginia LLCs often hire commercial registered agents to standardize service on the company and avoid publishing member or manager information. The fee for commercial registered agents varies but is typically around $100.00 to $200.00 per year.

Processing Time for Virginia LLC Domestication Filings

A Virginia LLC domestication proceeds in several steps. The length of the process depends on how long each step takes.

Each step depends on the responsible person’s turnaround time: the business owners’ time to organize the necessary information, the service provider’s time to review the information and prepare the domestication documents, the owners’ time to approve and sign the draft documents or request revisions, the service provider’s time to file the final domestication documents with state agencies, and the state agencies’ time to accept and process the filed documents.

The Virginia State Corporation Commission processes domestication filings in the order received. The domestication becomes effective when the State Corporation Commission issues the certificate of domestication. The State Corporation Commission offers expedited processing for documents filed online. The fee for same-day processing is $200.00.

The fee for next-day processing is $50.00 or $100.00. Documents must be filed by 10:00 a.m. for same-day processing or by 2:00 p.m. for next-day processing. Understanding the full domestication process, including document preparation and coordination between both states, is covered in detail in our guide to LLC domestication.

Legal Effect and Benefits of Virginia LLC Domestication

Virginia LLC domestication moves an out-of-state LLC to Virginia. The company otherwise continues its existence as the same entity with the same date of formation. The company expends substantially less time and money on administrative matters compared to other methods for changing a business’s state of domicile. For most out-of-state LLCs, Virginia domestication is the simplest and least costly way to officially move to Virginia.

Virginia law declares that the legal effects of a domestication to Virginia are as follows:

• The LLC is the same company. After completing a Virginia LLC domestication, the LLC is the same company that existed in the original state. The date the company came into existence, its date of formation, is still the date that it was formed in the original state.
• Virginia law governs the LLC. An LLC that domesticates to Virginia is a Virginia LLC from the effective date of the domestication. That means it is organized under Virginia law and primarily governed by the Virginia Limited Liability Company Act. The company’s new Virginia articles of organization, which are attached to the articles of domestication, are binding on the LLC and its members after the domestication.
• The LLC owns the same assets. The Virginia LLC now owns all real estate and other property that the out-of-state LLC owned before domestication. The domestication does not impair or limit the company’s property rights, and there is no need to sign deeds or transfer legal title to other assets.
• The LLC owes the same debts. Any debts or other obligations that the out-of-state LLC had before the domestication become the Virginia LLC’s debts. A member of the LLC who was personally liable for company debts or liabilities before domestication remains liable afterwards.
• Contracts remain effective. The LLC’s contracts from before the domestication are still valid and enforceable after domestication. The LLC keeps the same contractual rights and obligations. Employment relationships are also unaffected, so there is no break in the business’s employment of its employees.
• Day-to-day operations continue. An LLC does not have to stop doing business during the domestication process. Domestication occurs behind the scenes and need not affect the public-facing part of the business.
• The LLC keeps its taxpayer identity. The LLC is still the same taxpayer with the same Employer Identification Number. The consistency avoids needless administrative tasks and potential confusion.
• Company ownership is unchanged. A member who owned an interest in the out-of-state LLC before domestication continues to own the same interest in the Virginia LLC, except to the extent the plan of domestication provides differently. Ownership interests in the out-of-state LLC become ownership interests in the Virginia LLC. Members’ ownership proportions and their relative rights, preferences, and limitations are not affected by the domestication.
• Legal cases continue uninterrupted. Legal or administrative matters brought by or against the out-of-state LLC proceed without interruption, the same as if the domestication did not occur. If the company’s name changes as part of the domestication, the new name is simply substituted for the old name.
• No dissolution occurs. Moving an existing business to a new state sometimes requires the business to be dissolved in the original state and re-formed in the new state. An out-of-state LLC that domesticates to Virginia avoids dissolution, winding up, or distributing assets. The company can still do business in the former state if it registers there as a foreign LLC, but registration is not an essential part of the process. If the out-of-state LLC was registered in Virginia as a foreign LLC, the registration is automatically cancelled when the domestication takes effect.

Moving an LLC Out of Virginia

Virginia permits outbound LLC domestication under Va. Code Ann. § 13.1-1075(B). A Virginia LLC can domesticate to another state’s jurisdiction, provided that the destination state also authorizes the procedure.

Virginia Outbound Domestication Requirements

A Virginia LLC that domesticates to another state must file Articles of Domestication with the State Corporation Commission of the Commonwealth of Virginia. The outbound filing must include a plan of domestication approved by the LLC’s members or managers in accordance with Va. Code Ann. § 13.1-1076. Virginia does not require a separate certificate of surrender. The Articles of Domestication completes the Virginia side of the transaction. The destination state will require its own formation and domestication or conversion documents.

Filing Fees for Moving an LLC from Virginia

The State Corporation Commission of the Commonwealth of Virginia charges a filing fee of $25.00 for an outbound Articles of Domestication. The destination state will charge separate filing fees for its formation and domestication or conversion documents.

Virginia LLC Laws That Apply After the Move

The Virginia Limited Liability Company Act (Va. Code Ann. §§ 13.1-1000 through 13.1-1105) imposes ongoing requirements on all domestic LLCs, including those formed through domestication from another state. An LLC that domesticates to Virginia becomes subject to these obligations immediately upon effectiveness of the domestication.

Virginia Annual Registration Requirements

Virginia requires domestic LLCs to pay an Annual Registration Fee with the State Corporation Commission. The filing fee is $50.00 per year, due by the last day of the LLC’s anniversary month. Virginia does not require LLCs to file annual reports, so an LLC that domesticates to Virginia from a state requiring annual reports will have reduced compliance obligations once it becomes a Virginia LLC.

Virginia LLC Operating Agreement Requirements

Virginia refers to an LLC’s internal governance document as an Operating Agreement. The Operating Agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The Operating Agreement is not filed with the state; it is maintained by the LLC as a private document.

Virginia LLC Member and Manager Protections

Virginia law offers significant protections to LLC members and managers. Virginia recognizes charging order protection, an exclusive remedy that shields member assets from creditors seeking to collect a judgment against an LLC.

If a creditor obtains a judgment against an LLC, the creditor’s only recourse against the member’s personal assets is to obtain a charging order. A charging order does not give the creditor the right to seize the member’s assets; instead, it entitles the creditor to distributions that would have gone to the member.

Virginia law also recognizes fiduciary duties for members and managers, allowing members and managers to exercise a duty of care in managing company affairs. Virginia permits these fiduciary duties to be modified or eliminated by the Operating Agreement, giving the LLC maximum flexibility in structuring internal governance.

Alternatives to Virginia LLC Domestication

When domestication is not available because the other state’s law does not authorize it, a merger-based reorganization achieves the same result. The reorganization involves forming a new Virginia LLC and merging the out-of-state LLC into it, with the Virginia LLC as the surviving entity.

The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law. This approach requires paying formation fees for the new Virginia LLC along with merger filing fees, but it provides full legal continuity when domestication is not available.

For a detailed explanation of how the reorganization process works, see our guide to LLC reorganization. For a state-by-state comparison of LLC domestication and conversion laws across all states, see our guide to LLC domestication by state.