Before naming your series LLC, you should know the answers to these questions:
- What are the laws for naming a series LLC?
- What are some general tips for naming a series LLC?
- Is my business name available in D.C.?
- Is my business name available as a URL and if so, how do I buy it?
1. Naming Rules: Series LLC naming rules vary from state to state. In D.C., the name of each child series must contain the name of the parent LLC and be distinguishable from the name of any other child series. In addition, you must also follow these traditional LLC naming rules:
- 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.
- 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. Consider these general tips for making your series’ names more recognizable, uniform, and clear:
- Use the word “protected series” within the name of each company.
- Name the parent LLC in a way that distinguishes it from the child series.
- Include the full name of the parent LLC in the name of each child series.
- The name of the child series should include the name of the assets it holds. This creates a clearer asset picture to the public and creditors.
Example of a series LLC naming system that uses both the District of Columbia requirements and general tips:
My Holdings Co., LLC, a series LLC
123 Main Street, LLC, an individual protected series of My Holdings Co., LLC, a series LLC
123 Division Street, LLC, an individual protected series of My Holdings Co., LLC, a series LLC
3. Is your business name available in the District of Columbia? Make sure the name you want isn't already taken by doing a name search on the District of Columbia website.
4. Is your business name available as a URL? 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.
You are required to nominate a Registered Agent for your D.C. LLC. The Registered Agent for the parent LLC will need to be the same for each child series.
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 D.C. or a corporation authorized to transact business in D.C. 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.
To register your series 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.
You will also complete a Certificate of Series Designation as part of your series LLC filing.
The cost of filing the Articles of Organization is $220.
We recommend working with an Attorney to help you complete your series LLC Articles of Organization.
Or read our free guide to form a standard single or multi-member LLC in D.C.
File Online with the District of Columbia
OPTION 1: File Online with the District of Colombia
OPTION 2: File by mail or In-Person
State Filing Cost: $220 Payable to the Department of Consumer and Regulatory Affairs (Nonrefundable)
Department of Consumer and Regulatory Affairs
PO Box 92300
Washington, D.C. 20090
Department of Consumer & Regulatory Affairs
1100 4th Street SW
Washington D.C. 20024
Walk-in customers will be charged an additional $100.
An operating agreement is required when forming a series LLC in D.C. The operating agreement doesn’t have to be filed with the state.
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? The operating agreement is important for a D.C. series LLC because it creates the protection between the child series and parent LLC. The operating agreement outlines the liability limitations (asset protection) of the child series.
We recommend working with an attorney to draft your D.C. series LLC operating agreement.
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. Each of the child series in your series LLC will require an EIN.
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
How do I create an EIN for my series LLC? The IRS doesn’t have specific guidelines for creating an EIN for the child series of a series LLC. Experts suggest using the name of your series LLC combined with the child series name for each additional EIN.
Example Series LLC EIN
Series LLC Name: My Holdings Co., LLC, a series LLC
EIN entry: My Holdings Co LLC a series LLC
Child Series Name: 123 Main St., LLC, an individual protected series of My Holdings Co., LLC, a series
EIN Entry: 123 Main St LLC an individual protected series of My Holdings Co LLC a series
OPEN A BUSINESS BANKING ACCOUNT
A dedicated business banking account is required for each child series of a series LLC. Without dedicated accounts, the child series are NOT protected from liabilities incurred by the other child series or the parent LLC.
SET UP ACCOUNTING
Accounting and record keeping for the series LLC MUST be clear, concise, and separate. Without careful record keeping, your series might not be protected. Separate record keeping helps ensure the courts will never allow a creditor or plaintiff to pierce the corporate veil.
Accounting for your series LLC should be handled by a professional accountant or firm that is familiar with the series LLC.
*Recommended: Mazuma’s team of CPAs and accountants can help manage your series LLC’s finances, including bookkeeping, accounting, and tax filing services.
REGISTER YOUR SERIES LLC FOR DISTRICT TAXES
We recommend consulting a tax professional for help in tax planning and filing for your series LLC.
FILE YOUR SERIES LLC BIENNIAL REPORT
The District of Columbia requires all LLCs to file a biennial report with the Superintendent of Corporations of DCRA. The biennial report will be filed by the parent LLC on behalf of all of the entities in your series LLC.
FILE YOUR BIENNIAL REPORT
OPTION 1: File Online with the District of Columbia
Fee: $300 Payable to the Department of Consumer and Regulatory Affairs (Nonrefundable)
Business License Center
1100 4th St., SW
Washington, DC 20024
Due Date: The first report is due on April 1st 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.
Walk-in: submitting the report in person will cost an extra expedited fee $100.
All District of Columbia LLCs are required to pay an annual Franchise Tax. The amount will be based off of the total income of the full series LLC.
FILE THE ANNUAL FRANCHISE TAX WITH THE STATE OF DISTRICT OF COLUMBIA
OPTION 1: File Form D-30 (for all LLCs with gross income more than $12,000)
Fee: Free to file. Franchise tax payments should be made payable to the DC Treasurer.
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 9.0% 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.
The minimum tax rate is $250 for companies with DC gross receipts under $1 million, and $1,000 for companies with DC gross receipts over $1 million.
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: For all late payments, the D.C. Office of Tax and Revenue will charge:
a penalty of 5% per month, up to 25% of the total tax due,
an interest penalty of 10% per year, compounded daily, and
a collection fee of 10% of the tax balance due after 90 days.
REPORT LLC INCOME
Reporting income for your series LLC is best handled by an accountant who is familiar with series LLC tax code.
Series 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.
OBTAIN A CERTIFICATE OF GOOD STANDING
A Certificate of Good Standing verifies that your series 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.
DISSOLVE YOUR DISTRICT OF COLUMBIA LLC
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