What do I need to start a new business in Virginia?

1. Name of the company and any trade names you intend to use in the business
2. Principal place of business (location)
3. States other than Virginia where you intend to conduct business
4. Phone numbers for the business
5. Name of the owners (Members), the percentage ownership of each Member, and the initial capital investment being made by each Member
6. Name of the Managers who will direct the operations of the business
7. Brief statement describing the nature of the business
8. Number of employees expected in the first year – including yourself
9. Identity of the bank where you will be maintaining an account
10. The State Corporation Commission filing fee

What is the difference between a Corporation and a Limited Liability Company?

Both corporations and limited liability companies provide limited liability protection for their shareholders and/or members. There are, however, numerous differences between the two entities and many reasons why one should be chosen over the other. These reasons are based on the tax ramifications, type of business, circumstances surrounding the formation of the company, how it will be operated, and even the life circumstances of the owners. Because of the potential complexity of these issues, we recommend that you seek the advice of a professional in this area who can help you choose they type of entity that will best meet your specific needs.

What is a Registered Agent?

Virginia requires that each business entity have a Registered Agent located in the state in which they are operating. The Registered Agent is usually a third party, such as your corporate legal counsel, who is not directly involved in the daily operations of the company/corporation. Virginia also requires that the Registered Agent have a physical address in the State where the business is located and they must be available during normal business hours.

What is the role of a Registered Agent?

The Registered Agent is the individual designated by the corporation or company (typically a third party) to receive tax and legal documents on behalf of the business and to be served by the Sheriff’s Department or private process server in the event the corporation is sued. The Registered Agent is the one who maintains the corporation’s annual minutes of Members and Managers in order to ensure continuance of personal liability protection and compliance with Virginia law. They also receive and prepare the annual registration each year for renewal with the State Corporation Commission.

When can I open a bank account for my new business?

You can open a bank account for your business as soon as confirmation is received from the State Corporation Commission that the entity was accepted and you receive confirmation of your Employer Identification Number (EIN) from the IRS. The bank will need copies of these documents to get the business account set up.

Can I conduct business in a different state than the one I am incorporated in?

Yes. In order to do business in a state other than the one you are incorporated in, you must qualify as a foreign corporation in that state. The requirements and fees for setting up a foreign corporation vary from state to state.

What is a non-profit corporation?

A non-profit corporation is a corporation operating for educational, religious, charitable, social, humanitarian or civic purposes. Because the corporation is viewed to act for the benefit and betterment of society, non-profits are not required to pay state or federal taxes.

What are pleadings?

Pleadings are legal documents that are filed with the Court. Pleadings may contain the parties’ allegations, defenses and the facts on which the claims are based. Pleadings are used to help narrow and define the issues to be litigated.

What is discovery?

Discovery is the legal process in which the parties involved exchange factual and evidential information related to the case. This discovery process allows both parties the ability to obtain disclosure of information and facts, secure evidence for use at trial, and clarify the issues to be litigated.

What is a deposition?

At a deposition, witnesses are questioned under oath about their knowledge of relevant facts of the case and information about themselves. Just as in discovery process, depositions allow the parties to secure facts and information for use at trial. Because depositions occur earlier in the course of litigation, recollections of the witnesses about the events may be clearer. In addition, if a witness passes away, or is otherwise unavailable for trial, the testimony can be used at trial. A court reporter is present and records all testimony.

What should I do if I receive notification that someone is suing me?

We recommend that you contact a lawyer as soon as possible to discuss your situation. When a lawsuit is filed in the court, certain deadlines and specific procedures must be followed. An experienced litigation attorney can explain the process, advise you of the next step in the process, and draft the proper documents to ensure protection of your rights.

Can I file a lawsuit at any time?

Many claims carry a statute of limitation which set out specific timeframes in which a lawsuit can be filed. In most cases, if that time expires, the lawsuit cannot be filed. These time limits can vary depending on the type of case and the jurisdiction (state versus federal law). It is critical to consult with an attorney as quickly as possible if you believe that you have a claim to file.

What is the difference between litigation, mediation and arbitration?

Litigation involves the filing of a lawsuit and typically results in a trial if the matter is not settled. Arbitration and mediation are both alternatives to litigation. Mediation is a cooperative process and uses a neutral third party, such as a mediator, to facilitate a mutually satisfactory resolution. Arbitration also employs a neutral third party (an arbitrator), who will listen to both sides and make a decision. Typically, mediation is a non-binding procedure and arbitration is a binding procedure. There are various costs associated with hiring an arbitrator or mediator. It is important to assess the costs before agreeing to mediation or arbitration.

Is there a less expensive alternative to divorce than fighting in court?

Yes – it is called a Collaborative Divorce.

What is a Collaborative Divorce?

A Collaborative Divorce is a process that gives divorcing parties a way to end a marriage and restructure families without the stress, delay, and expense of litigation. While attorneys will share a commitment to collaborative law principles, each attorney has a professional duty to represent his or her own client diligently and is not the attorney for the other party.

How does the Collaborative Process work?

When a couple decides to pursue a collaborative divorce without going to court, they each hire lawyers specially trained in collaborative law. Their clients sit together in face-to-face meetings to identify and address issues in need of resolution. Collaborative lawyers also rely on a “team” approach” meaning that the parties may jointly hire personal coaches such as mental health professionals, child specialists, and financial experts to assist in gathering information and problem-solving.

How expensive is a Collaborative Divorce?

While no one can predict exactly what you will pay for this kind of representation because every case is different, a rule of thumb is that a collaborative divorce can cost nearly 90% LESS than litigation.

If I choose Collaborative Divorce, will my rights be protected and, if so how?

In a collaborative divorce process, each party’s attorney has an absolute duty to represent his or her client’s interests. The collaborative process does not mean that an attorney can or should be anything less than 100% on the side of his or her client. What is unique about collaborative law, however, is that the collaborative lawyer takes responsibility for advancing the client’s interest in settlement (as well as other interests), and therefore zealous advocacy in a collaborative negotiation is focused on finding a mutually agreeable solution.

What happens if an agreement cannot be reached and one or both parties want a conventional divorce?

The spouses and attorneys are bound by a written pledge not to go to court over any contested issue. If an agreement cannot be reached, attorneys may suggest bringing in mediators or other professionals to facilitate a settlement. However, if one or both parties wish to discontinue the collaborative process, both attorneys are legally obligated to withdraw from representing their clients. This means that both spouses have an incentive to settle their case collaboratively in order to avoid having to hire new attorneys and begin a traditional divorce process through the court system, adding time and expense to the divorce.

Do I need an attorney to close my real estate transaction? Can I just use a title company?

At first glance, a real estate transaction often seems very straight-forward and simple. However, there are many traffic jams, roadblocks, and even dead-ends that can come up when buying or selling real property. An experienced real estate attorney can guide you in a way that leads to a favorable destination. Throughout the closing process, legal questions may arise from home inspections, termite and moisture inspections, final walk-through, etc., that you or your real estate agent may need legal guidance. A Virginia real estate attorney can ensure that your legal rights are protected.

Do I need a survey?

Obtaining a survey is often very important when purchasing a new home. A title search will show the easements that are recorded, but will not show an encroaching fence, home, pool, storage shed, etc. It is important to know if your property has any survey issues prior to purchasing it, so you can avoid potential legal issues or disputes in the future.

Why is my closing being delayed?

There are many reasons a closing may not take place by the closing date in the contract – the buyer’s loan may still be in underwriting, there may be issues from walk-through that the seller needs to fix, etc. More often than not, these delays just need a day or so extra to iron out; however, in some cases the delay may be the result of more serious issues that may delay closing for days to weeks or indefinitely. To ensure there are not any serious issues and to ensure that you are not in breach of any part of the contract from the delay, it is extremely important to stay in communication with your real estate agent and real estate attorney.

Will I have to pay capital gains taxes on the sale of my house?

It depends. There are a few questions to answer that will determine the answer to this common question. At closing, you will fill out a short questionnaire with questions relating to conducting business at the property, using it for rental purposes, etc. A real estate attorney can help you answer these questions which the settlement agent will use to decide if they need to report your sale to the IRS or not. If it is the sale of your primary residence, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases). Remember, ultimately it is the tax payer’s responsibility to report the sale when filing taxes. If you are unsure or have questions regarding reporting the sale or your home, it is important to contact a CPA, tax attorney, or other tax professional to help answer your questions.

Nothing came up on title and the sellers told me title is free and clear – their family has owned the land since the 1800’s – do I really need owner’s title insurance?

There are many, many title issues that can cause huge problems later by not having title insurance – and most of them don’t come up on title searches. Just like anyone else, title examiners are not perfect and these issues may simply be missed. Judgments, liens, lis pendens, etc. can all be filed after the title search but prior to closing, indexed incorrectly when purchasing but fixed and filed correctly after you already own the property, among other possible scenarios. Even if these issues are against a prior owner, they are still clouds on title that need to be fixed even after the prior owner has sold the property. By obtaining an owner’s title policy, you are protecting yourself from possible future claims and problems.

Why should the seller pay the buyer’s attorney a release and courier fee?

In order to expedite the payoff process of your loan and track the delivery, most settlement agents will overnight mail the funds and release documents to your lender. The release documents include a Certificate of Satisfaction which will release the subject lien once recorded. Unfortunately, actually receiving the signed certificate is often not as easy as it sounds. Typically, the release fee the buyer’s attorney charges you covers their preparation of the release to be recorded and their follow-up to ensure it gets released in a timely matter.

Do both buyer and seller need to attend settlement at the same location?

No, the other party in the transaction will sign documents at their attorney/title company’s office. There is no need for everyone to be present at the buyer’s closing.

When will I know how much money I need to bring to closing?

The goal is the day before closing; however, many variables contribute to obtaining an approved final settlement statement. If you will need more than one day notice to gather funds for closing, you should let your attorney know so they can make sure all parties understand the importance of completing the settlement statement ahead of time.

What happens if my lender is not ready to close on time? What are my options to move in early?

This is a vital time to be in contact with your real estate attorney and real estate agent to ensure there are no major issues delaying closing. Possibly, this is just a minor bump in the road and closing can be scheduled a day or two out, but it depends on the situation. If all parties to the transaction agree, there are a few options available if your closing has been delayed but you need to move in. You may be able to “rent” the property with a short temporary agreement until closing takes place. Once you reach this point, discuss these options with your real estate agent and attorney.

What is estate planning?

Estate planning is the process of preparing and arranging the disposal of assets in a manner that ensures that your loved ones are provided for in your absence and that your final property and health care wishes are carried out and honored during a time of possible mental incapacity and certain death.  Check out our blog post entitled “Do I need Estate Planning?” by CLICKING HERE

What is your charge for estate planning?

We offer a no charge initial consultation for our clients in order to determine what plan best suits their particular situation and goals. A fee is quoted at the initial meeting after careful analysis of the planning required.

How much is a “simple will”?

Contrary to popular belief, there is no such thing as a “simple will.” There are many factors that many people fail to consider when considering their estate plan. Most people only think in terms of what their estate is worth, rather than how to distribute their property to the correct people in best way possible. Even further, most are unfamiliar with the laws which affect the distribution of assets even when you do not have a complex estate.
Some estate plans are more complex than others, but all should be drafted in light of a person’s individual goals and circumstances. Without proper planning, negatives results will likely follow. These results could be as detrimental as mistakenly disinheriting a loved one or even your will being considered invalid under Virginia law. For this reason, we have put together our Unique Process to assist our clients in navigating through their estate plan.

What’s the difference between a will and a revocable living trust?

Basically, a will and a trust both provide instructions on how your assets are to be distributed. The difference is the process in which the assets are distributed. A will goes through probate, while a trust avoids probate. A trust is private, unlike a will which is public record. With a will, estate assets are generally frozen for one (1) year so that creditors may come forward with claims; however, a trust provides uninterrupted trust administration after death so that assets in the trust are immediately available to pay necessary expenses and be distributed to your named beneficiaries. If you would like to know which type of planning is best for you, please contact our office for an initial consultation.  Check out our blog post entitled “What is a Living Trust?” by CLICKING HERE

Do I need an estate plan even if my estate is not large?

Yes – Everyone’s personal and financial situations vary; therefore a consultation will be beneficial in making the correct decision regarding your estate plan. Some things to consider are:

• Whether you have minor children
• Problem children or family members
• Disabled child or family member
• Second (or later) marriage
• Blended family
• You do not have any children
• Your spouse has recently passed away
• You are divorced
• Possibility of sudden death or incapacitation

An experienced estate planning attorney will be able to address issues and ask questions that you might never consider. It is important to be prepared in advance.

What happens if I do not have an estate plan?

If you do not have an estate plan in place when you die, then your estate will be inherited by those determined by the state’s intestacy laws.  Intestate means to have died without executing a valid last will.

How do I choose a personal representative?

Keep in mind when choosing your personal representative, whether the executor of your will or the trustee of your trust, that they will be responsible to carry out your wishes as you have set forth in your estate planning documents. This is a huge responsibility and can be a very time consuming burden. Some qualities to consider when choosing your personal representative are whether they are loyal/fair, trustworthy, practical, organized, organized (for extra emphasis), and tough. The qualities will be valuable in handling the duties required by your estate planning documents and Virginia law.

What if I change my mind later about my estate plan?

As long as you are mentally competent and living, you can change your estate plan as you desire. The type of planning you have established and the extent of changes that need to be made would affect this process. For a trust, you can do an amendment and/or restate the trust in its entirety. With a will, you can do a codicil (which is similar to an amendment) or establish a new will. We advise our clients to have their estate planning reviewed at least every two years to make sure their goals remain the same and their plan coincides with current law.

Can I draft my own estate plan?

You can do your estate planning yourself; however, in doing so you are taking a huge risk. Your will may not be considered a valid document and/or you may leave out critical language necessary to carry out your wishes. Do you know the proper questions to ask or issues to address? How will you know if something is missing? You won’t! That is why it is critical to consult with an experienced estate planning attorney – they can ask the right questions and make sure you are properly prepared.

What should I do if a family member just died?

Losing a loved one is one of the most difficult things anyone ever has to face. In addition, the process of taking care of their estate can be severely overwhelming. Once someone has died, the personal representative will bear the burden of the estate. They will be required to compile and protect all assets and determine debts. The personal representative is required to carry out the estate in accord with the estate plan in place (if applicable) and/or state law.

There is no will, how will the assets be distributed?

In situations where the deceased did not leave a valid will, the estate will be distributed according to state’s intestate laws. Virginia intestate law can be found in Virginia Code § 64.2-200 [link http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+64.2-200 ].

Who can qualify as the executor/administrator?

The person named as the executor in the will can qualify as the executor of the estate. However, if there is no will, then state law offers an outline of those who can qualify and the requirements related thereto. For Virginia, the information can be found in Virginia Code § 64.2-500 [link http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+64.2-500 ].

What are probate and non-probate assets?

Probate assets are assets that were owned solely by the decedent at death with no beneficiary designations, excluding real estate which has its own set of rules. Non-probate assets are assets that are in trust, held jointly, or have beneficiary designations.

Am I required to have an attorney to carry out the administration of an estate/trust?

You do not need an attorney; however, it would be in the best interest of the estate and the personal representative to retain an attorney who is familiar with the state’s estate laws. If the estate is not carried out properly, the personal representative may have personal consequences and liability.

Who pays for the attorney in the administration of an estate?

The estate is responsible for the fees and costs associated with the administration, including legal fees.

What is required after I qualify as the personal representative of the estate?

The direction of administration is dependent on the value of the estate, the debts associated with the estate, and instructions of the will/intestacy law. Typically, among the duties required by law for the personal representative, you will be required to give notice to all beneficiaries, file an inventory for the estate, and an accounting.

What if there are more debts than assets of the estate?

When the debts exceed the assets of the estate, we refer to this as an insolvent estate. There is an order of payment given under state law to ensure the assets are applied to the proper debts in order of priority. It is imperative that a personal representative follow the priority of payment; if not, they will hold personal responsibility for the unpaid debt.