How to Register a Business in Washington D.C.

Electing to launch a new business is both exciting and daunting. It is the first of many decisions you will make along the way. Depending upon what state you live in, you will likely need to register your business on a state, local, and federal level. This guide will help walk you through the process of registering your business in Washington D.C.

Recommended: Read our full guide on how to start a business in Washington D.C..


Registering a Business in Washington D.C.

1. Name Your Washington D.C. Business

Before you register your new business, there is one critical step you must take — you will need to decide on a name. While naming your new company may seem straightforward on the surface, it is actually one of the most critical and demanding steps you will take throughout the business launching process.

Your business’s name should be memorable and catch consumers’ attention, but it represents much more than that. It should send a clear message regarding what products you sell and/or what services you offer. Your business’s name introduces the public to your brand and will potentially share a message about your company and what it stands for.

Brainstorming Your Name

While many entrepreneurs are tempted to rush through the naming process, you should take as much time as you need to explore all naming possibilities. Take several brainstorming sessions and use the free online business tools available today to help come up with a number of possibilities, narrowing down your options as you go.

Our business name generator is an excellent, industry-specific brainstorming tool that will not only assist you in coming up with the perfect name, but it automatically checks domain name availability as well. If you’re still not sure where to start, our naming guide can help you define your brand and offers practical tips to utilize doing your brainstorming sessions.

Washington D.C. Name Search

The Washington D.C. DC Business Center has a business lookup tool that can help you search business entities by name and license type. You will need a CorpOnline account to access the search functions You’ll also want to check to make sure that your name isn’t too similar to that of any other business in the district. This will help avoid confusion and potential legal hassles down the road.

Once you have come up with a name that accurately represents your brand, it’s time to start legitimizing your business. These next steps will vary depending upon your business structure and DC’s legal requirements. We will go over the different business structures in the next section.

If you decide to use a “doing business as” (DBA) name, known as a trade name in Washington D.C., our DBA guide will help ensure you are properly registered on a district level. There are several benefits to registering your trade name with the district. It offers a layer of protection against other Washington D.C. businesses, proves your company’s legitimacy, and may be required by some vendors, banks, and lenders.

2. Choose a Business Structure for Your Washington D.C. Business

Now that you have chosen the appropriate name for your brand, it is time to start the process of legalizing your business. Before you begin the registration process, you will need to determine which business structure best fits your needs. Each comes with its own set of advantages, disadvantages, and tax benefits.

Sole Proprietorship

A sole proprietorship is the most unambiguous of all business structures. This informal entity was designed for entrepreneurs who do not plan to have any business partners. It does not offer any personal asset protection and does not require a district filing.

Though sole proprietorships typically operate under the owner’s surname, you can choose to file for a trade name. The cost to register a DBA in Washington D.C. with the Department of Consumer and Regulatory Affairs is $55 and needs to be renewed every two years.

While you don’t need to form your sole proprietorship with the district, keep in mind that Washington D.C. requires most businesses to obtain a business license, including sole proprietorships.

Partnership

Much like a sole proprietorship, a general partnership is an informal entity designed for entrepreneurs who are entering a partnership with at least one other person. The business can operate under you and your partners’ surnames, or you can acquire a DBA name. The profits and losses would be claimed under your (and your partners’) personal tax return, and there is no personal asset protection.

In Washington D.C., some partnerships — including limited partnerships and limited liability partnerships — must file official paperwork with the Department of Consumer and Regulatory Affairs along with a filing fee.

LLC

If you do not plan to go public in the next few years, a limited liability company (LLC) may be the best fit for you. It offers more flexibility and protects your personal assets in the event of a lawsuit.

Washington D.C. requires that all LLCs appoint a registered agent who will accept legal documents on behalf of the organization. Your registered agent must be a qualified resident of Washington D.C. or a corporation that is authorized to conduct business in Washington D.C. Many new LLCs elect to appoint a registered agent service, which costs between $39 and $300 annually.

Washington D.C. also requires you to follow certain naming requirements and file the Articles of Organization, which provides key details about your company.

Corporation

A corporation is a business entity designed for those who have (or plan to have) shareholders. So, if your future plans include going public, this may be the best option for you.

Like LLCs, corporations must appoint a registered agent to accept paperwork in case of legal disputes, compliance documents, and government correspondence on the organization’s behalf. Also like an LLC, your registered agent can be a professional service, a business entity, or an individual.

In addition to getting a registered agent, you will also need to file the Articles of Incorporation with the district.

Recommended: Read our full guide on choosing a business structure.

3. Determine if You Need to Register Your Business in Washington D.C.

Once you have determined your formal business structure and registered your new business name, you will want to check with the district to determine the business registration requirements. Each state has its own set of guidelines, and you must follow them precisely.

In most cases, informal business structures like sole proprietorships and general partnerships do not have to officially register with Washington D.C. However, they may need to register for a business license. Check with your local government to see if you must register your sole proprietorship or general partnership at a county or city level.

Additionally, some businesses (e.g., sole proprietorships and single-member LLCs that don’t have employees) are not required to register and file for a Tax ID Number, also known as an Employer Identification Number (EIN), with the IRS. Even if this is not a requirement for your business, you will want to consider registering anyway as there are several legal and tax benefits.

Even if you aren’t required to register your business, note that registering an LLC comes with an abundance of legal and financial benefits. As a sole proprietorship or a partnership, your business debts are considered personal debts. This means that your personal assets can be seized in the event of a lawsuit. LLCs offer personal protection, legally protecting your personal assets and limiting your personal liability.

In addition to this personal protection, LLCs enjoy several other benefits, including:

  • Flexibility in profit distribution, decision-making, and business management
  • “Pass-through” taxation, which allows for the LLC’s income and expenses to pass through to the owners’ personal income tax returns with no restrictions regarding the number and type of owners
  • Limited requirements regarding annual meetings, paperwork, and record-keeping

If you lack the time and/or knowledge needed to form your new LLC, there are a number of reputable LLC filing services that will help you launch your business. Because we understand how challenging it can be to sift through the dozens of available options, we have reviewed and ranked the five best LLC filing services. Our LLC service review offers a side-by-side comparison of each, ensuring you partner with a service that saves you both time and money.

4. Register for Taxes for Your Business in Washington D.C.

The IRS uses EINs as a way to distinguish businesses for tax reporting. All businesses with employees are required to have one. Our EIN guide will help you determine your business structure’s EIN requirements and walk you through each step in the process.

After forming your business and obtaining your EIN, you will need to register for district taxes with the Washington D.C. Office of Tax and Revenue. Use the MyTax DC website to complete the combined business application for business taxes (Form FR-500). Separate from that form, you will need to register for withholding tax and unemployment insurance tax.

If your business is going to sell products, you will need to collect sales tax. Depending on the nature of your business, you may need to sign up for additional taxes such as specialized sales tax or sports wagering tax. Visit the Office of Tax and Revenue website for more information.

5. Obtain Permits and Licenses for Your Washington D.C. Business

Most Washington D.C. businesses will need a business license. The Basic Business License (BBL) is based on the goods and services your business provides. Regulated businesses in the district will have different filing requirements and procedures. The Washington D.C. Department of Consumer and Regulatory Affairs website has a list of business licensing categories that you can use to determine which application process best fits your business.

Additionally, some companies are regulated under a federal agency and require federal licenses and/or permits. For instance, a liquor manufacturer would be subject to rules and guidelines created under the FDA. You can learn more about federal permit requirements and fees by visiting the Small Business Administration (SBA) website.

To assist you in determining your federal and local license and permit requirements, we have developed a business license search. To use this free guide, simply choose your state from the dropdown menu, and you will be redirected to a list of everything you will need to consider when launching a business in Washington D.C.

Still feeling uneasy about the process? We’ve also compiled a list of our top five business license services that can help you get set up and ensure your business meets all compliance requirements.

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