Get the fastest District of Columbia LLC formation online with worry-free services and support to start your business
Get the fastest District of Columbia LLC formation online with worry-free services and support to start your business
Are you getting ready to start an LLC in the District of Columbia? Congrats! Starting your own business is a huge step, and we’re sure you’re excited about where this business prospect could lead.
If you’ve never formed a business, you may have some questions about getting your limited liability company (LLC) off the ground. Since all states have requirements that LLCs need to follow, you might also be curious about how LLCs operate in the District of Columbia.
In this guide, we’ll take you through the entire LLC creation process so that you’ll know what to expect each step of the way. If you’re worried about the paperwork, legal, or tax requirements you’ll need to meet to set up your LLC, don’t worry — we’ll walk you through how to handle everything and explain how an LLC business service like ours can help with the administrative tasks.
The good news is that LLC formation in the federal capital of the United States isn’t any more difficult than in the rest of the country, even though the District of Columbia is a territory, not a state. This territory has a local government with rules and regulations that businesses within its borders must follow, similar to a state government.
Once you’ve decided to form an LLC in the District of Columbia, there are a few steps you’ll need to follow. First, you’ll want to register your LLC with the local government in D.C. By doing so, you’ll create a public record of your LLC in this area, which allows the local government to deem you as an official business and contact you as needed.
However, before you can register your LLC officially, you’ll need to decide on a few important aspects of your LLC. These include deciding on an official name for your LLC and choosing a registered agent for your company. You’ll also need to file all official paperwork for your LLC, draft an operating agreement, and ensure your company is set up to follow local and federal tax laws.
We know all of this information can seem overwhelming. To help, we’ve created a five-step process to get your LLC up and running.
Naming your LLC is often the most enjoyable and creative part of the setup process. When selecting an official name for your company, consider a name that helps market your brand by easily communicating the goods or services you offer to customers. It’s a good idea to come up with a few memorable names and jot them down on a list during this step.
Once you have your list ready, you can go online to the D.C. government website to do some research so you can lock in your company’s final name.
LLC names must be unique, so if another company has already registered the name you want, you’ll need to choose another one. To complete this search, you’ll need to create a login to the District of Columbia Department of Consumer and Regulatory Affairs (DCRA) web portal. From there, you can search if the name you’ve chosen is available. Once you’ve found an available name you like, you can move on to the next step. Be sure to also review the statute on naming your LLC and ensure you do not include words that aren’t allowed, such as “FBI.”
Next, choose an official LLC designator. An LLC designator is a suffix at the end of your business name that indicates your business is an LLC. For instance, if you chose the name “Lisa’s Designs,” you’ll need to add a designator at the end, like “Lisa’s Designs, LLC.” You can choose from a list of approved designators. We’ve listed all the possible options below:
Once you’ve chosen a designator, you have your company’s official name! To ensure there are no complications with this name, it’s a good idea to reserve your name with the D.C. government. If you’d rather not deal with this process yourself, we have a business name reservation service that can handle it for you. As part of the service, we also check to see if your desired name is available.
Throughout your name search process, you might come across a DBA form when forming your LLC. A DBA, or “doing business as” form is paperwork you’ll fill out if you decide to operate under a name that is different than your registered LLC name. For instance, if your company’s registered name is “Custom Concepts Agency, LLC,” but you sell your services as “CC Agency,” you’ll need to register this secondary name as a trade or fictitious name. You’ll need to pay a fee to register your trade name with the D.C. government.
To make sure you’re entirely in the clear with your business name, visit the United States Patent and Trademark Office website to see whether your business name or logo is federally trademarked. Trademarks can also happen at the state level. However, in D.C., you can only do this at the federal level since there is no D.C. trademark law.
Lastly, you’ll want to think about a website domain name for your business. When you’re coming up with a business name, it’s wise to consider whether you can secure a matching domain name so that your future website can be easily found online. We have a tool to help you do a preliminary domain name search, and our domain name registration service can help you secure the online name that will best serve your company.
Once you’ve reserved your LLC’s official name, you’re ready to appoint a designated registered agent. All U.S. states require LLCs to choose a registered agent, and D.C. is no different.
Your registered agent is a person or company that works on your behalf to receive and pass on legal notices, such as subpoenas. This means that your registered agent in D.C. might receive sensitive paperwork at any point throughout the business day. As a result, your agent will need to hold regular office hours at a D.C. office. They must be present during the workday, and their operating address cannot be a P.O box.
Some LLCs decide to act as their own registered agent, and you might wonder if you should do the same. While this is perfectly legal, there are some important things to consider before making this decision. Being your own agent ties you to the office all day, and being served with a lawsuit in front of clients can be bad for business. A registered agent service like ours can help you avoid that.
Now that your name is ready and you’ve chosen a registered agent, it’s time to file your LLC’s official paperwork. Your Articles of Organization — sometimes referred to as a Certificate of Organization in other states — will officially register your LLC with the District of Columbia government.
Filing official government documents like this can be intimidating and/or complicated for many people, which is why we’re here. With our business formation plans, our professionals handle the filing for you to make sure it’s done quickly and correctly the first time. But, although we can handle this for you, we’ll show you how the process works below.
You can register your LLC by filling out the Articles of Organization form, paying the fee, and submitting it online or by mail — via a check. Note that if you mail your forms, you’ll also need to include form RA-1, which is the registered agent written consent form (if you file online, you don’t need to worry about this).
You’ll need to fill out the below fields when completing this form:
If you have us handle filing your Articles of Organization, once the state approves your LLC, your paperwork will be available from your ZenBusiness dashboard, where you can keep it and other important paperwork digitally organized.
Once you get your physical paperwork back from the state approving your new LLC, you’ll want to keep it in a safe location along with your other important documents, such as your operating agreement, member certificates, contracts, compliance checklists, transfer ledger, etc. We offer a customized business kit to help you keep these important documents organized and looking professional.
By now you’re realizing how often you’ll need to supply an address for your new business. That can be unsettling for some business owners, especially those running their business from home. In instances where you’re not required to give the registered agent address or official principal address for your business, a virtual business address can come in handy.
With our virtual business address service, we supply you with a physical street address where you can have your mail sent without divulging your real address to more people than necessary.
An operating agreement is a contract that details your LLC’s structure and key rules and regulations about company operations. In the District of Columbia, you’re not required to have an operating agreement, but getting one can help your LLC run more smoothly and prevent and resolve any conflicts between members and other vested parties.
Your LLC’s operating agreement lays out how your company will be run, detailing your management style and member powers and limitations. It can even explain member voting structures to help handle disagreements if they arise. You’ll want to make sure all members read, agree to, and sign your LLC operating agreement.
Although operating agreements are considered a smart move for LLCs with multiple members, they can also be beneficial even if you’re the only member of your LLC. Here’s why:
Creating an operating agreement requires a bit of a time investment since this document details how your LLC will be run regarding business activities. Luckily, you don’t have to construct this all from scratch. If you’re unsure as to how to start creating an operating agreement for your District of Columbia LLC, we offer a customizable template to help get you started.
Now that you’ve officially registered your company as an LLC in the District of Columbia, you’re ready to get your tax information set up with the Internal Revenue Service (IRS). To do this, you’ll apply for an Employer Identification Number (EIN).
Think of an EIN like your business’s Tax ID Number (also referred to as a Federal Tax Identification Number). It helps identify your company to the government and can be used when filing taxes, opening business bank accounts, and hiring and paying employees.
If you have employees or other members in your LLC, you’ll need to apply for an EIN. If you’re the sole member of your LLC, you may not need to secure an EIN, but it can be beneficial.
You can get your LLC’s EIN through the IRS website, by mail, or by fax, but if you’re unfond of dealing with that particular government agency, we can get it for you. Our EIN service is quick and eliminates the hassle.
Once you’ve secured an EIN, you’ll be able to open a business bank account. Having separate accounts for your business and your personal banking is critical for sorting out your finances at tax time and helps you avoid commingling funds. Commingling funds can not only make your taxes more difficult, but it could also be used against you if someone takes you to court to challenge whether you and your LLC are truly separate entities.
We offer a discounted bank account for your new business. This allows for unlimited transactions, online banking, a debit card, and more. When you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process.
For further help managing your new business’s finances, try the ZenBusiness Money App. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.
The state fees for forming a District of Columbia LLC can range from around $220 to $370, depending on factors such as whether you choose to reserve your business name and whether you choose expedited filing. Note that fees change over time, so you should check the District of Columbia Secretary of State website for the most recent fee schedule.
Additionally, in the District of Columbia, LLC owners must obtain a Certificate of Occupancy before acquiring space for their office. This application can be filled out online and must be approved by the government before an office space can be leased. You can view the full requirements on the DCRA website.
If you run your LLC out of your D.C. home (regardless of whether you own or rent), you’ll need a Home Occupation Permit (“HOP”). Follow the instructions on the DCRA site for applying. These permits are only for residentially zoned buildings.
When starting a business, there are different types of companies you can choose from. Many small businesses opt to form an LLC because of the flexibility this business type offers. An LLC makes it easy to keep your business assets and liabilities separate from personal accounts. This type of company also offers tax benefits. Lastly, forming an LLC is relatively easy and can be done quickly, even by first-time businesses.
Here are the primary benefits of setting up an LLC in the District of Columbia:
Would you like to learn more about the LLC business structure? Get the full scoop in our comprehensive guide on LLCs.
The processing time for your LLC will vary depending on how your Articles of Organization are filed. If you apply online, expect your request to take anywhere from five to seven business days. If you file via mail, it can take up to three weeks.
The District of Columbia has options for expediting your filing for an additional fee. If you’re in a hurry to form your LLC and don’t want to jump through the hoops of D.C.’s expedited filing processes, we can handle it for you with our faster filing speeds service.
While there are many forms you will need to file with the District of Columbia, when setting up your LLC, you do not need to file your operating agreement. This agreement will help detail how your LLC is run and managed but does not have to be provided to the government since it is not required by law.
Before deciding how your LLC should be taxed, it’s important to weigh your options.
Most LLC owners opt to have their business taxed the default way, which is as a sole proprietorship (for single-member LLCs) or a partnership (for multi-member LLCs). This method only requires owners to pay taxes on their percentage of the profits on their personal tax returns. The company itself is not taxed. This avoids the “double taxation” that corporate shareholders pay, in which profits are taxed both at the business level and the personal level.
For certain LLCs, it may make more sense to be taxed as a corporation. A qualified accountant can help you determine what’s best for your LLC.
As mentioned above, forming an LLC has many tax benefits, such as exemption from double taxation. However, you’ll want to learn how your LLC will be taxed in D.C. and what decisions you’ll need to make to keep your company tax compliant.
Although tax rules for LLCs are pretty straightforward, many LLCs opt to work with a trusted accountant or tax specialist to ensure they’re following all tax laws required in the District of Columbia.
We’ll walk you through a few federal and D.C.-specific tax requirements for LLCs:
Also available to you is our Free Accounting Assessment to help determine your bookkeeping, accounting, and tax needs during your first year of business.
Some states permit what is called a Series LLC. A Series LLC refers to one or more LLCs that are nested under a parent LLC. This business structure can be appealing to many investors or entrepreneurs. In the District of Columbia, you’re allowed to form a Series LLC.
Before doing business in the District of Columbia, all LLCs must have a Basic Business License (BBL). There are several prerequisites for getting a BBL, including having your Articles of Organization approved, registration with the Office of Tax and Revenue, an EIN, and either a Certificate of Occupancy or Home Occupation Permit. You can apply in person, by mail, or online. The fees will depend on what category your business falls into.
In addition to the BBL, your LLC may need other federal, local, or industry-specific licenses and permits, so you’ll have to research your business’s needs. The DCRA also has a page with information on licensing in D.C.
You’ll need to make sure your LLC has all the licenses and permits it’s required to have by law. Unfortunately, because licensing varies by industry and location and can occur on the federal and local levels, there’s no central place to check to see if you have all the licenses and permits you need. You’ll have to do some research.
If you don’t have the time or inclination to do all this research, or if you just want the peace of mind to know that your business has all the licenses and permits it’s legally required to have, our business license report service can do the work for you.
The insurance your business will need depends on a variety of factors, such as whether you have employees or have company vehicles. D.C. requires your business to have workers’ compensation insurance if you have at least one employee. For more on what types of insurance your company may need, visit the District of Columbia Department of Insurance, Securities and Banking.
A couple of terms you may have come across are “foreign” and “domestic” LLCs. A foreign LLC is a company that was created outside of the District of Columbia that carries out business and services in the D.C. territory.
A domestic LLC is one that was formed in the District of Columbia and carries out business and services in the D.C. area.
It’s important to always register your LLC in the state or territory where you intend to conduct business.
Over time, your operation might change. You may have new members join, decide to switch your registered agent, or adopt a new business name. Whenever there’s a substantial change to your business, you’ll need to file an amendment with the District of Columbia government.
Follow the below steps for each change you need to report:
Change your registered agent’s information
Change your LLC name
Add or remove an LLC member
To avoid substantial fees, try to make all updates at one time, so you’re only amending your Articles of Organization once.
In addition to amending your documents with the District of Columbia government, you should also update your operating agreement to reflect the new changes.
Your D.C. biennial report is due every other calendar year by April 1. This form asks for the name of your LLC, the state or territory where it was formed, your principal operating address, your registered agent’s name and address, a brief statement of business conducted in the past two years, details on all members, and your signature.
You can submit this form online via the District of Columbia business portal or via mail. You’ll be required to pay a filing fee and an additional fee if your report is late.
We can help you with your biennial report in a couple of ways. Our annual report service will help you file your biennial report, and our Worry Free Compliance service not only helps with filing your biennial report, but also sends you other important compliance reminders and helps you with two amendment filings each year.
You might find that you need to dissolve your LLC. Whether you’re forming a new business or closing your doors, to end your LLC, follow the below steps:
First, you’ll need to transfer or close any LLC financial accounts. Always do this first because once your LLC is dissolved, it can be difficult to access these accounts.
Reach out to the District of Columbia Office of Tax and Revenue to determine if there are any steps you need to take to officially dissolve your LLC. Your accountant can also help with this process.
Lastly, you’ll need to file your Statement of Dissolution with the District of Columbia government. This form disbands the company you initially formed when filing your Articles of Organization. You’ll need to pay a fee when dissolving your LLC. You can file and pay online or through the mail.