Virginia. Named after Queen Elizabeth, the Virgin Queen, in a time when people still bought the story that if you were not married you were still a virgin. Your greatest cash crop is tobacco, though you innocently started out by trying to cultivate the mulberry trees that attract silkworms. Many of the old salts that would be our first presidents were born within your borders—Washington, Jefferson, Madison, Monroe—and as Richmond was the capital of the confederacy you’ve always walked the fine line between the north and south. Ever adapting and changing, blending both the rural and urban, you’ve got a lot going on, Virginia.
Virginia is also a diverse state in which to register your small escort business, and in this article you’ll find clear step-by-step advice on how to do just that. For more information on why it’s vitally important to register your business, refer to our article Don’t get busted for tax evasion: Why registering your escort business is the only option.
Step one: Define and describe your business
There are several kinds of business structures applicable for registering your escort business with the government, and picking the right one for you is important. For example, someone working completely as an independent escort and someone who wants to run an agency would file for different types of businesses. Ask yourself these questions to define what your business is / will be and under which structure you should register:
- How do I define my work? What is it, in essence, that I serve? Do I supply the connections between escorts and clients, or am I myself the escort and am providing the company?
- Am I the only one who will benefit monetarily from my business? If not, who else will and why are they collecting profits?
- Am I the only one who will manage my business – schedule clients, hire drivers etc.? If not, will it be another owner doing this or someone I employ?
- Will I be hiring regular employees to take calls, set up appointments, manage any office work on a regular basis etc., or will I maintain my business by myself?
- Will I be hiring independent consultants (freelance escorts) and, if so, how do I expect to manage and pay them?
- Who will fund costs such as buying advertisements in newspapers, renting an office or the cost of running a website?
- Would I ever want to brand my business name or logo?
- Who will be responsible for my business if I run into debt? Is this just me?
- Will I ever want to sell my business?
Write the answers to these questions down and your business model will start to take shape for you.
Another step in articulating your business is to write a one-sentence summary of what the business actually does. As an escort you’re registering a service you provide, rather than a product that you sell, and this service will need to be articulated. Having this readily on hand will save you time when filling out various forms. Make this unique to you from the questions you’ve answered above, along the lines of “We provide company to our clients in a social setting”.
For information on what terms you legally can and cannot use, refer to our article The fine legal line between escort and prostitute: some strategies for an escort to stay out of trouble.
Step two: Choose your business structure
Once you have a handle of what your business is and how it will be run, it’s time to pick out a business model. Below are four quick definitions of what it means to be one of the four business models that make sense for an escorting service: a sole proprietorship, a partnership, a corporation and an LLC.
- Sole Proprietorship: One person owns and operates the business, and is responsible for all profits and losses. Legally, there is no difference between your business and you. If you are just starting out and/or will be working and managing and collecting your fees alone, this is what you want.
- Partnership: Two or more people own and are responsible for the business. If you have a small group of close friends who will share contacts and the actual time spent with clients or will work with one person as a manager and you as the only escort, this is what you should choose. However, as you are equally responsible for losses and this structure requires more paperwork, it can be a risky investment.
- Corporation: The business is a legal entity owned by shareholders. While the shareholders may invest money and collect in profits, they are not responsible for losses or claiming personal bankruptcy if the business claims it. This model requires much more paperwork, and most likely the addition of an accountant and possibly a business lawyer as well. A corporation is definitely the way to go if you have been in business for a few years, juggle many consultants and clients, and want to expand and legitimize your work on a higher platform. If that’s not you, don’t become a corporation.
- Limited Liability Company (LLC): An LLC provides the liability insurance of a corporation with the tax efficiencies of a sole proprietorship or partnership. One or more owners are referred to as members. The taxes of the business are filed with the income taxes of the members, but they are not responsible for (most) company losses. If you have a small company involving a few close friends and want to expand to having a separate bank account and records slightly more independent than your own, an LLC is for you.
For specifications on these structures federally visit IRS.Gov.
Step three: Create your name
Let’s pretend your name is “Jane Doe”. First, decide whether you simply want to call your business your name — “Jane Doe” — or take on a DBA name (‘doing business as’ name, also called an ‘assumed name’ or ‘trade name’).
With a sole proprietorship or partnership, you have the option of using your own name as your business name, and won’t be required to register your business name in Alaska. If you’re a corporation or LLC, you will have to take on a DBA name. If you’re required to or simply want to take on a DBA, have fun picking your company name.
Do you want to be brassy and devil-may-care? Pick something as straightforward as “Jane Doe Escort Service”. Want to be flirty and funny? “Jane Doe—The Company Company”. Feel like being a little more discreet and want to stay out of the limelight? Try something demure, like “Jane Doe Social Consulting”. Your name can be as simple or as flashy as you’d like, just make sure it’s honest to what you want your business to be. And keep in mind that escorting is a controversial issue in the United States. Do you want to push the envelope of acceptability or maintain a low profile?
Make sure the DBA name is not already being used in Virginia. You’ll have wasted time and money if you apply to register the name and it’s already been taken. A simple internet search and comb through the yellow pages will take care of this. Also know that you shouldn’t do business with a DBA name until the registration has been approved.
For some helpful advice on picking out a business name, visit Business.gov.
Step four: Register your business / business name
Other than corporations, registering your business and business name as well as registering for taxes and licenses is relatively easy with Virginia Business OneStop. This service will provide you with the most up-to-date information regarding forms, fees and due dates and is the fastest way to get your paperwork through to the government.
In Virginia you are not required to register your sole proprietorship escort business as a separate business entity: because the business is you, it is not recognized as a separate business and you’ll file your business information along with your own personal taxes. You are also not required to register your business name if it is your name.
But if you take on a DBA name, you’ll have to file register the name with each county that you do business with. “Doing business with” refers to any place you’ll be advertising or residing with a business address, not necessarily a location you’ll be seeing clients. To find the contact information for counties in Virginia, go to Virginia.Gov—Mapping Virginia.
For more information on if taking on a DBA is a good choice for your business, refer to our article Do I want to be a sole proprietor?
In Virginia you are not required to register your general partnership as a separate business entity. However, it is highly recommended that you draft a statement of partnership authority or partnership agreement. This document will safeguard the details you’ve outlined within the partnership should you come into conflict with a partner down the road. While it is not required that you register this document with the commonwealth of Virginia, doing so will protect you further, and can be done rather easily and for a nominal $25 filing fee. You can find a statement of partnership authority for your personal or filing use at Virginia.Gov—Virginia Partnerships.
You are also not required to register your business name if it is the collected names of the partners. But if you take on a DBA name, you’ll have to file register the name with each county that you do business with. “Doing business with” refers to any place you’ll be advertising or residing with a business address, not necessarily a location you’ll be seeing clients. To find the contact information for counties in Virginia, go to Virginia.Gov—Mapping Virginia.
To register your escort corporation in Virginia you’ll need to file your Articles of Incorporation with the Commonwealth of Virginia State Corporation Commission. You’ll include information on the amount of shares for the corporation, the incorporating persons and a $25 filing fee as well as a charter fee based on the amount of stock your company will carry. Because of the intricate information required when starting a corporation, it is highly recommended that you seek advice from a business lawyer and accountant. You can find forms, fees and schedules atVirginia.Gov—Virginia Stock Corporations.
Registering your Articles of Incorporation will register your business name, so you do not have to do this separately. However, if you choose to function under a name other than the one you’ve registered with in your Articles of Incorporation, you’ll have to file that name with every county you conduct business with and then file those registration forms with the state commissioner.
To register your escort LLC in Virginia, you’ll need to file your Articles of Organization with the Commonwealth of Virginia State Corporation Commission. The form includes basic information about the members and managers of the LLC, and requires a $100 filing fee. You can find this form and file online at Virginia.Gov—Virginia Limited Liability Companies.
Registering your Articles of Organization will register your business name, so you do not have to do this separately. However, if you choose to function under a name other than the one you’ve registered with in your Articles of Incorporation, you’ll have to file that name with every county you conduct business with and then file those registration forms with the state commissioner.
Step five: Get an Employer Tax Identification Number (EIN)
If you are a sole proprietor in Virginia, your EIN will be your own social security number, whether you do or do not register a DBA/trade name. But if you are a partnership, corporation or LLC or say YES to any of the following questions, you’ll have to apply for a new EIN.
- Do you have employees? This means anyone you pay regularly, such as a personal assistant, office manager, driver etc.
- Do you plan to open a bank account solely for the business? Will you be collecting money from clients and then using that money to pay escort or other employees (if you have any employees, you should have a separate bank account for this)?
- Do you operate your business as a corporation or a partnership?
- Do you file any of these tax returns: Employment, Excise, Alcohol, Tobacco, Firearms? If you hire employees, you’ll need to pay employment taxes. Other than that, as an escort service this answer is most likely no.
- Do you withhold taxes on income, other than wages, paid to a non-resident alien? Are any of your employees non-Americans?
- Do you have a Keogh plan? (A retirement plan you set up for yourself in the business)
- Are you involved with any of the following types of organizations? (I’m going to save you an explanation of what all of these mean, because you’ll most likely know if your business is involved with such, and the answer is probably no.)
- Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
- Real estate mortgage investment conduits
- Non-profit organizations
- Farmers’ cooperatives
- Plan administrators
All application processes require only basic information: your legal name and contact information, a name and description of your business, the type of entity, your social security number, employees etc. And there is no fee.
- Online: This is the currently preferred way to obtain your EIN, and you’ll get the results immediately as soon as your business is approved without needing to fill out a separate SS-4. You have 15-minutes to complete the form. Go to IRS.gov to apply for an online EIN.
- By Mail: Fill out an SS-4 form, which you can obtain on IRS.gov. and mail to Internal Revenue Service, Attn: EIN Operations, Philadelphia, PA 19255. It takes about 4 weeks to get the EIN once your application has been processed.
- By Fax: Fill out and fax an SS-4 form to (859) 669-5760. If you include your fax number on the form, they’ll fax your EIN within 4 business days.
- By Phone: Call toll-free (800) 829-4933, 7am-10pm, Monday—Friday. An assignor will take your information over the phone and then directly process the application and give you your EIN.
Step six: Register for your federal and Virginia state taxes
There are a few basic types of taxes small businesses in Virginia may register for.
- Individual Income Tax: If you’re a sole proprietor or LLC, you’ll file your business profits/losses in a Schedule EZ form that will go along with your personal income tax 1040 form. For more information go toIRS.gov. More information on personal income taxes in Virginia can be found at the Virginia Department of Taxation—Individuals General Information.
- Business Taxes: Corporations must file corporate income tax returns. LLCs and partnerships will pay “pay-through entity taxes” (the taxes are passed through to the partners or members for filing). More information, including forms, fees and due dates, can be found at the Virginia Department of Taxation.
- Unemployment Insurance: All businesses with employees pay unemployment insurance to safeguard the state’s unemployed. More information can be found at the Virginia Employment Commission.
- Withholding Taxes: Employers must withhold taxes from employees for their personal income taxes on a federal and state level. More information and online registration can be found at the Virginia Department of Taxation.
- Workers Compensation: If you have more than two employees, you’ll have to pay Workers’ Compensation. Resources for employers and online filing can be found at the Virginia Workers’ Compensation Commission.
- Self-Employment Taxes: If you own and operate your business and are not paid as an employee, you’ll need to file your own self-employment taxes for social security and Medicaid. This is particularly true for sole proprietorships, general partnerships and LLCs. You can find this Schedule C / 1040 form and get more information at IRS.gov. Get more information at IRS.gov.
Register for and file many of these taxes at the Virginia Department of Taxation.
Step seven: Get necessary licenses and permits
There’s no specific “escort license” in Virginia, and chances are you won’t need any other permits to conduct your escort service, but it’s a good idea to run your city through the IRS’s Permit Me tool and get more information about specific filing from their site.