This is the first and most important step in starting your LLC. Be sure to choose a name that complies with District of Columbia's LLC naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines:
- Your name must include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
- Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
2. Is the name available in District of Columbia? Make sure the name you want isn't already taken by doing a name search on the District of Columbia website.
3. Is the URL available? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
You are required to nominate a Registered Agent for your District of Columbia LLC.
What is a Registered Agent? a Registered Agent is a person or business that agrees to send and receive legal papers on behalf of your LLC. Such papers include service of process of legal action (if you are sued) and state filings.
Who can be a Registered Agent? a Registered Agent must be a resident of District of Columbia or a corporation authorized to transact business in District of Columbia. You may elect an individual within the company including yourself.
Learn more about the role of a registered agent and why you should consider hiring a professional service.
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Recommended: Incfile provides the first year of registered agent service free with LLC formation ($49 + State Fees)
To register your LLC, you will need to file the Articles of Organization with the Department of Consumer and Regulatory Affairs. This can be done online, by mail, or in-person.
When filing, you will need to state whether your LLC will be member-managed or manager-managed. We recommend learning more about these two options before you file.
File the Articles of Organization
OPTION 1: File Online with the District of Columbia
OR
OPTION 2: File by Mail or In-Person
Fee: $220 Payable to the Department of Consumer and Regulatory Affairs (Nonrefundable)
Walk-in customers will be charged an additional $100.
If you’re expanding your existing LLC to the District of Columbia, you need to form a Foreign LLC.
An operating agreement is not required in the District of Columbia, but it's a good practice to have one.
What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.
Why are operating agreements important? An operating agreement is an important document because it ensures that all business owners are on the same page and reduces the risk of future conflict.
For more information on operating agreements, read our article What is an LLC Operating Agreement?
Recommended: Use our free Operating Agreement Tool to draft a customized operating agreement for your LLC.
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.
Why do I need an EIN? An EIN is required for the following:
- To open a business bank account for the company
- For Federal and State tax purposes
- To hire employees for the company
Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.
Get an EIN
Option 1: Request an EIN from the IRS
OR
Option 2: Apply for an EIN by Mail or Fax
Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax:
(855) 641-6935
Fee: Free
We reviewed and ranked the top 5 LLC formation services.
Find out which is best for you.
Using dedicated business banking and credit accounts is essential for personal asset protection. When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. This is also known as piercing your corporate veil.
1. Opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Get $200 when you open a business checking account with Chase. Learn more.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital later on.
Recommended: Compare business credit card offers at CreditCards.com. Learn more.
Even if you haven’t officially opened for business – it’s critical to get your books in order. A well managed accounting system will help you:
- Track your business finances, including bills, expenses and income.
- Simplify your annual tax filings.
Quality accounting software makes the whole process fast and easy. Look for software that:
- Syncs with your bank automatically
- Matches transactions to invoices, bills, and purchase orders
- Can be accessed from your phone
- Makes it easy to work with your accountant
If you need help, a certified public accountant can work with you to set up an accounting system for your business. Thumbtack.com is a great resource for finding local professionals.
Recommended: QuickBooks has all the accounting features your small business will need.
Depending on the nature of your business, you may be required to register for one or more forms of state tax.
- If you are selling a physical product, you’ll typically need to register for District of Columbia Sales Tax.
- If you hire employees in Washington D.C. you will have to register for unemployment insurance tax and state income tax withholding on behalf of your employees.
Register for District of Columbia State Taxes
To operate your LLC, you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
Keep in mind that in order to get some licenses or permits, you may need to pay a fee, take classes, or pass an exam.
Research what types of federal, state, and local licenses and permits your LLC needs:
- Federal: Use the U.S. Small Business Administration (SBA) guide.
- Local: Contact your local county clerk and ask about local licenses and permits.
Recommended: If you are a first-time entrepreneur, consider having a professional service research your business’ licensing requirements. Our friends at Startup Savant have reviewed and ranked the top five license research services.
Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:
- General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
- Workers Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Washington D.C., businesses with one or more employees are required by law to have workers compensation insurance. Get a free quote with ADP.
How much will the right insurance cost you? Click here to find out.
If you plan to hire employees, stay compliant with the law by following these steps:
- Verify that new employees are able to work in the US
- Report employees as "new hires" to the State
- Provide workers compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your work space
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Pay employees at least the minimum wage of $13.25 per hour.
Find out more information at District of Columbia Directory of New Hires.
Recommended: A payroll service saves you time and makes it easier to follow these requirements.
We understand that creating an LLC and getting your business up and running comes with many challenges. To help you succeed, we compiled the best local resources in every major metro area in District of Columbia . You can get free assistance in the following areas:
- Mentoring
- Networking
- Business Planning
- Sales & Marketing
- Research Assistance
- Financial Planning
- Fundraising
- Legal Assistance
- Coworking
- Product Development
The District of Columbia requires LLCs to file a biennial report with the Superintendent of Corporations of DCRA.
File your Biennial Report
OPTION 1: File Online with the District of Columbia
OR
OPTION 2: File by Mail
Fee: $300 Payable to the Department of Consumer and Regulatory Affairs (Nonrefundable)
Due Date: First report is due on April first of the year following LLC formation. Thereafter, a new report must be filed every second year by April 1st.
Late Filings: The District of Columbia charges a $100 penalty for failure to file on time.
District of Columbia LLCs are required to pay an annual Franchise Tax.
File the Annual Franchise Tax with the State of District of Columbia
File by Mail with the District of Columbia
Fee: $250 with DC gross receipts under $1 million, $1,000 if DC gross receipts are over $1 million. (Nonrefundable)
Tax Calculation: The District of Columbia levies a franchise tax on all LLCs with more than $12,000 in gross receipts, and which are not otherwise exempt. The tax is 9.2% of all taxable income. Taxable income is derived from your LLC’s net income, minus a $5,000 exemption for unincorporated entities and a 30% salary allowance for the owners of your LLC.
Due Date: Due on April 15th for calendar year filers, otherwise on the 15th day of the fourth month following the close of the tax year for fiscal filers
Late Filings: There is a 10% penalty assessed on any unpaid tax, compounded daily.
Most LLCs will need to report their income to the IRS each year using:
- Form 1065 Partnership Return (most multi-member LLCs use this form)
- Form 1040 Schedule C (most single-member LLCs use this form)
Read our LLC Tax Guide to learn more about federal income taxes for LLCs.
LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines, and even submitting reports on your behalf for an additional fee.
Recommended: Incfile offers a reliable registered agent service and excellent customer support.
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A Certificate of Good Standing verifies that your LLC was legally formed and has been properly maintained. Several instances where you might need to get one include:
- Seeking funding from banks or other lenders
- Forming your business as a foreign LLC in another state
- Obtaining or renewing specific business licenses or permits
You can order a District of Columbia Certificate of Good Standing online.
Order a Certificate of Good Standing
Request Certificate of Good Standing Online
Fee: $50 (Nonrefundable)
If at any point in the future you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your LLC, there are two broad steps:
- Close your business tax accounts
- File the Articles of Dissolution
When you are ready to dissolve your LLC, follow the steps in our District of Columbia LLC Dissolution Guide.
Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in District of Columbia, you will need to register as a foreign LLC. This can be done by mail or online.
Register as a Foreign LLC in District of Columbia
OPTION 1: File by Mail
OR
OPTION 2: File Online with the District of Columbia
Fee: $220 Payable to Department of Consumer and Regulatory Affairs (Nonrefundable)
