Learn How to Form an West Virginia Professional Corporation

What is a West Virginia Professional Corporation?

On the surface, a professional corporation and a regular corporation look very similar. Both businesses can issue stock, both have bylaws, and both are governed by a board of directors and an executive team. Both pay corporate income taxes, too.

And more importantly, both corporation types offer personal asset protection. Simply put, a shareholder or member of the business isn’t liable for the business’s debts. So a member of the corporation can’t be sued; the corporation is sued. However, in a professional corporation, there’s one exception: individual members can be sued for malpractice.

That’s especially important because professional corporations usually offer professional services, such as lawyers, dentists, doctors, chiropractors, and more. All of those trades can be sued for malpractice. But in a PC, only the person responsible for the malpractice can be sued. That makes it a better option for most professionals.

In West Virginia, you won’t technically find a “Professional Corporation Act.” That’s because there are separate acts for different trades, such as doctors, dentists, physician’s assistants, engineers, architects, and more. But all of those separate acts fall under the heading of “professional corporation,” so we’ll address them as such throughout this guide. For a look at your industry’s law, start here.

7 Steps to Start a Professional Corporation in West Virginia

Now let’s jump into the specific steps you’ll need to take to form a professional corporation in West Virginia. Later on in this guide, we’ll discuss the steps you need to take in order to maintain your corporation in West Virginia. But let’s start at the beginning.

1. Select Your Board of Directors

A professional corporation is only as good as its board of directors, so you’ll want to appoint carefully. And while the bulk of people involved in the day-to-day operations of your business will be licensed in your profession, we recommend having your board be a bit more diverse.

For example, a dental PC might want a director with legal experience, one with business growth expertise, a financial expert, and so on. This gives you diverse input to help the business succeed.

West Virginia also makes it pretty simple to choose your board because there isn’t a long list of rules for your board. The only explicit rules are that you must have at least three directors at all times, and usually, all but one of your directors must be licensed in your PC’s profession. West Virginia requires a lay person to be on every health-related corporation’s board. As long as you meet those minimum requirements, you can set out all the remaining terms in your company bylaws.

2. Designate a Registered Agent

Every West Virginia professional corporation—and even other entity types—must appoint a registered agent. This individual accepts “service of process” from the state on your behalf. Basically, if the state ever needs to notify you regarding a lawsuit or an upcoming annual report due date, they’ll contact your registered agent. Your agent forwards that notice to you.

West Virginia has a few legal requirements for your registered agent, though:

• Every entity that files with the Secretary of State (both domestic and foreign) must appoint a registered agent
• The agent may be an individual resident of the state OR a business corporation with authority to operate in the state
• An agent must be continuously maintained

You can find a full rundown of the state laws in the West Virginia Business Corporation Act.

Technically, you can serve as your own registered agent, but we don’t recommend that. First, you’ll be busy running the day-to-day affairs of your corporation. It’s also important to note that the registered agent’s address goes on the public record; some entrepreneurs are uncomfortable with that idea. Because of that, it’s a good idea to appoint a third-party, like an individual that you trust or one of our top registered agent services.

3. Choose a Name for Your Corporation

Technically, you can complete this step at any point during the process, but we’ve put it here—depending on how involved your board of directors or fellow incorporators are, they may want to be involved in the naming process.

Choosing a name can be one of the most fun—and challenging—parts of starting a PC. There are a few things to keep in mind when picking a name.

Meet West Virginia’s Legal Requirements

The trickiest part of naming a business is adhering to the state’s legal requirements for naming a business. Thankfully, West Virginia keeps its laws relatively simple:

• You name should include a corporate entity type identifier, such as “Co.” or “PC”
• Your name cannot state or imply a business purpose that goes against state law or the purpose stated in your Articles of Incorporation
• Your name must be “distinguishable upon the records,” or distinct from the names of other entities in use in the state

You can find more details about business names in the state’s naming statutes or get started by doing a name search.

Pick a Descriptive Name That You Like

As long as you meet legal requirements, you have a lot of leeway to pick the perfect name for your professional corporation. In general, you should choose a name that’s memorable, describes what your business does, and is easy to say and remember. More importantly, you should pick a name that you and your team likes. You should feel good when you tell other people about your business, and your name is a big part of that.

You can also reserve your name with the Application for Name Reservation form. This procedure costs $15, but it protects your name for 120 days. That buys you time for other business start-up steps. After all the work to create a name, you don’t want to lose it to another business.

4. File your Articles of Incorporation

Now that you have your board, agent, and name all lined up, you’re all set to file your Articles of Incorporation. This three-page document is what officially forms your business in West Virginia, and it requires some foundational data about your business. This is the information you’ll need to provide:

• The name of your corporation, including a corporate name ending
• Address for your principal office
• Mailing address, if applicable
• Address for the principal place of business, if applicable
• Name and address of your registered agent
• Email address for business correspondence
• Website domain, if applicable
• If you own more than one business in the state
• Confirmation that you’re forming a profit corporation
• The stock you’ll issue, including number of shares, their classes, and par value
• Purpose of your corporation and the services you’ll offer
• An attached Verification of Eligibility Form (VOE)
• Name and address of at least one incorporator
• How much land your business will hold
• Contact information for questions about the form
• Signature of incorporator

West Virginia does require an extra step by adding the VOE form, which essentially obtains the permission (and certification) of your profession’s regulatory board. Don’t forget to include it, or your filing will be rejected.

Once you have that form in hand, it’s a simple matter of filling in all the requested information. Then you’ll be set to go. If you prefer, you can also file this form online. Either way, be sure to have a valid form of payment on hand for the $100 filing fee.

5. Establish Your Corporate Record & Hold Your First Board Meeting

Now that your professional corporation officially exists, it’s time to establish your corporate record. Your board of directors will help you do this during your first board meeting.

The very first step you’ll take is drafting your bylaws. West Virginia doesn’t dictate a lot of legal requirements for the day-to-day operations of your business, so that’s where your bylaws will come in. Your bylaws are basically the operating manual for your business: how the board is appointed and maintained, shareholder policies and distributions, how officers are appointed, and much more. Every PC will have slightly different bylaws, but it’s essential to have them.

In addition to creating bylaws, at your first meeting, you’ll want to appoint someone to take minutes at each meeting. These minutes form another vital part of your corporate record, summarizing all important activities and decisions.

Other important tasks for your first meeting include appointing officers, drafting a conflict of interest policy, establishing committees (if applicable), and more. No two board meetings are exactly alike, but the first one is a crucial (and busy) one.

6. Obtain Business Licenses

As a professional corporation, you won’t be a stranger to the licenses required by your industry. But we’d be remiss not to remind you of them!

In West Virginia, every shareholder must maintain the appropriate licenses for your industry, and employees are also required to have licenses if they’re offering the PC’s service. Support staff members like clerks are not required to obtain licenses. If any members of your organization need to renew or obtain a license, then West Virginia’s Business OneStop is a great place to get started.

Some states also require a general business license on top of professional licenses, but West Virginia doesn’t. That said, we recommend double-checking with your city or county to see if there are any local licenses. A good starting point is to read our guide to WV business licenses.

7. Set up a Business Bank Account

If you don’t already have one, it’s time to get a business bank account. This enables you to ensure that your business funds and personal funds are always separate—an essential distinction to maintain your personal asset protection. Most banks will ask to see your bylaws (and maybe even your formation documents) as part of this process.

You can also look into getting a business credit card if you feel your company is ready for that step.

3 Steps to Maintain Your West Virginia Professional Corporation

Now that your business is up and running, it’s time to maintain it compliantly. There are three major areas you’ll want to tackle (or plan ahead for): taxes, insurance, and annual reporting.

1. Prepare for Taxes

Taxes are a fact of life for a corporation. Before you do anything else, we recommend obtaining an EIN, or an Employer Identification Number—even if you don’t have employees. That’s because an EIN acts like a social security number for a business. What’s more, it’s free (and quick) to obtain through the IRS.

After that, if you have employees, you’ll want to anticipate your contributions to unemployment insurance taxes and income withholding taxes on the state and federal levels.

And of course, there are corporate income taxes to account for (21% for federal taxes and 6.5% for state ones). These taxes are arguably the biggest expense a corporation will face in a given year. Income taxes are supplemented by West Virginia’s miscellaneous industry taxes: soft drinks and alcoholic beverages are just a few of them. You can find more information on miscellaneous taxes with the West Virginia State Tax Department.

Not every tax will apply to your West Virginia PC, and this is not an exhaustive list. Taxes are complicated and vary significantly depending on your business. We highly recommend consulting with a tax professional to ensure that you’ve covered all of your responsibilities.

To keep things organized and simple for all things tax, we recommend setting up an accounting software and working with a qualified professional.

2. Obtain Business Insurance

In addition to the malpractice insurance that each practitioner maintains, we highly recommend maintaining a general liability insurance policy for the business as a whole.

Lots of things can go wrong: fallen trees at your physical location, a fall on your property, malfunctioning equipment…it’s a long list. This general policy isn’t required by West Virginia law, but we recommend it so you’re protected no matter what. Accidents and natural disasters can be very expensive.

West Virginia does require one insurance policy, though: workers’ compensation. Any West Virginia business with employees must maintain one of these policies. For more information on this requirement, please consult the Insurance Commissioner.

3. Anticipate Your Annual Report

All businesses in West Virginia are required to submit an annual filing called the annual report. This report updates the state regarding any information about your business that might have changed over the course of the year. It’s a very simple online filing.

West Virginia gives you a wide range of time to file this report: anytime between January 1st and July 1st. As long as you file this report on time, the filing fee is just $25. This report might not seem like much, but don’t overlook it; delinquent filings can cause a lot of hassle. If you’d prefer to have a service handle this obligation for you, there are a handful of reliable report filing services.

Getting Help With Your West Virginia Professional Corporation

Feeling overwhelmed or just need an extra hand? Here are some of our favorite resources for West Virginia professional corporations.

Online Incorporation Services

If you would like to hire an affordable business incorporation service to create your professional corporation for you. These service providers can handle most of the formation process, while still charging much lower rates than a business attorney’s fees.

There isn’t the same level of personalization that a lawyer can provide, but online incorporation services can still be a tremendous help. The only major issue with these service providers is the fact that they can’t provide any actual legal advice, so you need to know what you want ahead of time.

West Virginia Business Attorneys

There are some situations where hiring a business lawyer is a preferable route to using an online incorporation service. The professional corporation as a business structure can be highly complicated and specialized, and if you want to have the peace of mind that every single step was taken care of by a true expert, hiring a business attorney to form your West Virginia professional corporation is the way to go.

If you would like to pursue this route, there are some convenient services that can help you choose the right lawyer for your business. We like to use Avvo, which has extensive reviews and ratings for hundreds of West Virginia business lawyers, which can make it much easier to select an attorney who has your best interests in mind and also has the expertise to get the job done right.