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A business that operates in Virginia can operate as a sole proprietorship, a general or limited partnership, a corporation or a limited liability company. In addition, like the federal tax law, the state income tax law also recognizes "S" Corporations, for income tax purposes, and generally allows the income or losses of this entity to "flow through" and be taxed or deducted at the shareholder level, rather than taxing the corporation itself as an entity.

Virginia also provides for Limited Liability Partnerships, in which no partner is liable for the debts of the partnership, in general, as in the case of a Corporation or Limited Liability Company, but with fewer legal formalities that are required for either a Corporation or an LLC.

It is most strongly recommended that any prospective business owner consult with an attorney to receive the necessary information to properly establish your company's legal identity and structure.